Midian - PPM pitchdeck

human resources management, project management, research and analysis, marketing, sales and
customer service. Mr. Boyd’s vast experience in data collection, analysis and reporting will provide
the Fund with plausible trends of the ensuing markets. His leadership in analytics and reporting for
the Fund will be clear and concise and of the highest integrity.

Larry Kimball-Manager

Mr. Kimball brings with him a broad background encompassing over 30 years in financial
management. His C-class experience in a public traded company, Dole Food Company’s Lanai
operation is paramount. As their Chief Financial Officer and Chief Operating Officer, he was
responsible for the management of all Lanai subsidiaries. This position required diverse
management skills for agriculture operations, development of luxury residences, management of
resort hotels, to running one of the largest cattle operations in the United States. Mr. Kimball’s
private equity experience includes acting as Investment Manager for a family office private equity
fund, focused on Internet technology companies. With his prowess and proven experience in
finance, Mr. Kimball is a great asset to the Fund.

John Hill-Manager

Mr. Hill has been engaged in consumer finance and factoring for over eighteen years. With this
expertise, he is able to provide immediate solutions to our clients. In regards to operations and
management, Mr. Hill has established this skill set with a number of his own companies, creating
funding programs and compliance guides to help secure successful growth. His experience
establishing a sub-prime company for the purpose of purchasing retail installment contracts, along
with his proven ability to map out and create success in the finance and factoring industry makes
Mr. Hill a proven asset to the Fund.

Daniel Alcorn-Manager

Mr. Alcorn brings 28 years of financial management experience to the management team, his
knowledge in the industry is broad spectrum and tailor made for his position with the Fund. Mr.
Alcorn has been the Managing Director and Partner in both funding and payment solution entities.
He successfully developed Automated Clearing House (ACH) and eCheck systems for
e-commerce clients. As a Senior Vice President in banking, Mr. Alcorn expanded merchant credit
card services nationwide , resulting in recognition amongst the largest acquiring banks in the
United States. He also successfully launched a Home Equity Credit Line program, which achieved
market share leadership. Mr. Alcorn’s desire to increase growth and profitability through quality
improvement measures further insures the success of the fund.

9

SUMMARY OF PRINCIPAL TERMS

The following is a summary of principal terms of Colorado High Yield Venture Fund I, LP and will be
qualified in its entirety by a more detailed Limited Partnership Agreement (the “Partnership Agreement”),

which will be circulated to investors prior to closing. To the extent that this summary conflicts with the

Partnership Agreement, the Partnership Agreement will control.

Structure Colorado High Yield Fund, LP, the Fund, will be organized as a

Delaware limited partnership. Colorado High Yield, LLC, a Delaware

limited liability company, will be the General Partner of the Fund. Chris

Boyd and Tab Turner will serve as the members of the General Partner
(the “Principals”).

General Partner The General Partner’s capital commitment to the Fund will be no less
Commitment than $1,000,000 and may be increased at the General Partner’s

election. Such General Partner Commitment may be invested pro rata in
all investments in the General Partner’s sole discretion.

Aggregate Size The Fund will seek a target amount of $50,000,000 in committed capital

from the General Partner and Limited Partners (collectively, the
“Partners”). This target amount may be increased or decreased in the
General Partner’s election.

Purpose and Focus The purpose of the Fund is to make investments in funds, ventures, and

financial instruments in the cannabis and hemp industry. The General
Partner intends to focus the Fund’s investments on financing provided to

dispensaries and cultivation facilities and investment in related-industry

venture funds and companies, though the Fund may invest
opportunistically in other industries in the General Partner’s discretion.

Closings The General Partner may hold one or more closings. The General
Partner may in its sole discretion, admit additional Limited Partners to
the Fund until the date twelve (12) months after the initial closing. After
such period, the General Partner may admit additional Limited Partners
only with the consent of a majority in interest of the Limited Partners.

Each Limited Partner admitted subsequent to the initial closing shall pay
simple interest at the prime rate, plus two percent (2%) with respect to its

initial capital contribution for the period(s) of time from the date(s) on

which the previously admitted Limited Partners were required to make
their capital contribution(s) through the date of such investor’s admission
to the Fund.

Term The Fund will have an initial 5 year term, provided that the Fund’s term
may be extended for up to two additional one-year periods in the
General Partner’s discretion, and thereafter, with the consent of a

majority in interest of the Limited Partners. The Fund may be dissolved

prior to the end of its stated term upon the affirmative vote of 85% in

interest of the Limited Partners.

Capital Calls; Commitment Each Limited Partner will make contributions of capital at such time that
Period their subscription to the Fund is submitted and accepted by the General
Partner or as requested by the General Partner upon ten (10) calendar
days’ prior written notice. No Limited Partner will be required to

10

contribute any capital following the period ending on the Second
anniversary of the Fund’s initial closing (the “Commitment Period”),
except as may be necessary for (a) for operational purposes, (b)
follow-on investments in existing portfolio companies of the Fund, (c)
completion of transactions in process, including commitments made
during the Commitment Period to make new investments, and (d)
fulfillment of indemnification obligations to the Fund.

Key Man In the event that 1 or more of the Principals cease to actively manage the
affairs of the General Partner (a “Suspension Event”), the General
Partner will promptly notify the Limited Partners of such Suspension
Event (the “Suspension Event Notice”). The Limited Partners may
within sixty (60) days after delivery of the Suspension Event Notice, elect
to suspend the Commitment Period by an affirmative vote of two-thirds in
interest of the Limited Partners. Upon the suspension of the
Commitment Period, the General Partner will not request further capital
contributions except as required for Fund expenses, completion of
follow-on investments in portfolio companies in which the Fund has
previously invested, completion of investments to which the Fund has
committed prior to the Suspension Event, and fulfillment of
indemnification obligations to the Fund. The suspension of the
Commitment Period may be terminated upon the affirmative vote of
two-thirds in interest of the Limited Partners.

Allocation of Profit and Loss The Fund will establish and maintain a capital account for each Partner.
Subject to certain exceptions, profit and loss generally will be allocated
as necessary to cause the capital accounts of the Partners to conform
over time to the cumulative amounts distributable to the Partners.

Distributions Mandatory Distributions: Within ninety (90) days following the end of
each fiscal year, the General Partner will distribute cash to each Partner
in an amount equal to the Applicable Tax Rate (as defined below)
multiplied by net taxable income allocated to such Partner, less all prior
cash distributions to such Partner; provided, that the General Partner will
have no obligation to make the foregoing distributions if the total amount
to be distributed to all Partners would be less than one hundred
thousand dollars ($100,000). In addition, subject to the maintenance of
reasonable cash reserves, within ninety (90) days following the end of
each fiscal year, the General Partner will distribute cash to each Partner
in an amount equal to the amount of ordinary income, if any, allocated to
each Partner’s capital account during such fiscal year.

The “Applicable Tax Rate” will mean the highest state and federal
income tax rates (including, to the extent applicable, self-employment
and Medicare taxes) applicable to a member of the General Partner,
applied by taking into account the character of the taxable income in
question (i.e., capital gain, ordinary income, etc.).

Discretionary Distributions: The General Partner may make additional
distributions of cash or marketable securities from time to time in its
discretion. Such distributions will be made first 100% to all Partners in
proportion to their respective capital commitments, until all capital
contributions are returned, and then 80% to all Partners in proportion to
their capital commitments and 20% to the General Partner.

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Notwithstanding the foregoing, at any time, the General Partner may
make discretionary distributions (a) to all Partners in accordance with
their relative capital commitments, or (b) only to the Limited Partners in
accordance with their relative capital commitments.

The General Partner will not distribute securities that are not marketable,
other than distributions pursuant to the dissolution or winding up of the
Fund.

In the event legislation is enacted changing the tax treatment of the
carried interest or other allocations or distributions to the General
Partner, the General Partner will have the discretion to amend the
Limited Partnership Agreement and/or adjust distributions and
allocations in a manner that comes as close as practicable to achieving
the after-tax economic result for the General Partner which obtained
prior to such enactment, provided that such amendment or adjustment
may not adversely affect any Limited Partner without such Limited
Partner’s consent.

Reinvestment Proceeds from the disposition of investments in financings and portfolio
companies will be subject to reinvestment only to the extent that total
investments of the Fund in portfolio companies on a cumulative basis do
not exceed 100% of the total capital commitments of all Partners. In
addition, proceeds realized from any short-term investment in a portfolio
company that is liquidated within 12 months from the date of investment
may be reinvested.

Management Fee; The Fund will pay the General Partner an annual management fee. The
Acquisition and Disposition
Fees management fee will be payable quarterly in advance, at an annual rate

equal to 1.75% of the aggregate capital commitments of the Partners.
The Fund will pay the General Partner an acquisition fee of 1% based

upon the gross asset cost of investments made by the Fund
(“Acquisition Fee”). The Fund will pay the General Partner the

Acquisition Fee upon the acquisition of each Investment. The Fund will

pay the General Partner a disposition fee of 1% based upon the gross
asset sale of dispositions made by the Fund (“Disposition Fee”). The
Fund will pay the General Partner the Disposition Fee upon the sale of

each Investment.

Expenses From the management fee, the General Partner will bear ordinary
operating expenses incurred in connection with managing the Fund,
including salaries, benefits and overhead. The Fund will be responsible
for all other expenses of the Fund and the General Partner, including,
but not limited to, expenses incident to the organization of the Fund and
the General Partner (up to a maximum of $300,000), costs incurred in
the investigation, purchase, holding, sale or exchange of securities
(whether or not such purchases or sales are ultimately consummated),
and all legal, audit, accounting, banking, consulting, registration,
insurance, indemnification, partner communications and meetings
expenses, financial fees, and any extraordinary expenses of the Fund.
The Fund will also bear all costs and expenses related to the liquidation
of the Fund’s assets upon termination of the Fund.

12

Clawback Upon dissolution of the Fund, the General Partner will be required to pay

back to the Fund the amount by which the cumulative net distributions

received by the General Partner over the life of the Fund (excluding

amounts received by the General Partner in respect of its capital
commitment) exceeds 20% of the Fund’s cumulative net profits less its
cumulative losses; provided, however, that the amount of repayment

described in this paragraph will be reduced by the federal and state

income taxes payable on such amount by the members of the General

Partner. In the event that the assets of the General Partner are

insufficient to satisfy the obligation described in the preceding sentence,

the members of the General Partner will each agree to contribute capital
to the General Partner in an amount not to exceed each such member’s
pro rata share of the General Partner’s remaining obligation to the Fund.

Outside Activities; Conflicts The Principals will devote such time as is reasonably necessary to
of Interest conduct the business of the General Partner and the Fund; provided,
however, that the Principals shall not be required to manage the General
Partner or the Fund as their sole and exclusive function, and shall be
entitled to have other business interests and may engage in other
business activities in addition to those relating to the Fund.

None of the General Partner or the Principals may form a successor
investment fund to the Fund until the earlier to occur of (i) such time as at
least 70% of the committed capital of the Fund has been invested,
committed, or reserved for investment in portfolio companies, or applied,
committed, or reserved for working capital and expenses, and the (ii)
expiration or termination of the Commitment Period.

The Principals and the General Partner will generally offer all private

company investment opportunities that are, in their good faith
determination, within the Fund’s investment strategy to the Fund prior to

investing in any such opportunities themselves.

Transfer of Interests A Limited Partner’s interest in the Fund may not be transferred without
the prior written consent of the General Partner, subject to limited
exceptions, such as customary estate and gift planning exceptions.

Reports The Limited Partners will receive an annual audited report and overview

of the portfolio, quarterly valuations of the portfolio, quarterly summaries

of new investments and dispositions made during the period; and
Schedule K-1’s and any other tax information reasonably requested by a
Limited Partner, within ninety (90) days of the closing of the Fund’s fiscal

year.

Indemnification The Fund will indemnify and hold harmless the Principals, the General
Partner, and any manager, member, partner, principal, officer,
employee, affiliate, or agent of the foregoing against all claims, liabilities,
costs, and expenses, including legal fees, judgments, and amounts paid
in settlement, as incurred by them, by reason of their activities on behalf
of the Fund or with any other enterprise that such indemnitee is or was
serving, as a director, officer, employee or otherwise, at the request of
the Fund, other than (i) conduct not undertaken in the good faith belief
that such act or omission was in the best interests of the Fund, or (ii) any

13

Partner Withdrawal conduct which constitutes fraud, gross negligence or willful misconduct.
Counsel
If Fund assets are insufficient, the General Partner may (a) call for any
unfunded capital commitments and (b) recall distributions previously
made to the Partners for the purpose of fulfilling an indemnity obligation
of the Partnership. In no event will any Partner be required to return
amounts pursuant to the foregoing clause (b) in an amount in excess of
the lesser of (i) distributions previously received from the Partnership or
(ii) 25% of any Partner’s capital commitment. In no event will the
General Partner be permitted to call capital pursuant to this paragraph
more than three years after filing of the completion of winding up the
Fund.

A Partner may withdraw from the Partnership with one hundred twenty
(120) days advance written notice to the General Partner, provided that
the Partnership has been in existence for one (1) complete fiscal year.

Hasan, LLC

14

Certain Risk Factors

Prospective investors should be aware that an investment in the Fund involves a high degree of risk and,
therefore, should be undertaken only by investors capable of evaluating the risks of the Fund and bearing
the risks it represents. There can be no assurance that the Fund’s investment objectives will be achieved,
or that an investor will receive a return of its capital, and therefore, an investor should only invest in the Fund
if such investor is able to withstand a total loss of its investment. In addition, there will be occasions when
the General Partner and its affiliates may encounter potential conflicts of interest in connection with the
Fund. The following considerations, among others, should be carefully evaluated before making an
investment in the Fund.

RISKS INHERENT IN VENTURE CAPITAL INVESTMENTS. The types of investments that the Fund anticipates
making involve a high degree of risk. In general, financial and operating risks confronting portfolio
companies can be significant. While targeted returns should reflect the perceived level of risk in any
investment situation, there can be no assurance that the Fund will be adequately compensated for risks
taken. A loss of an investor’s entire investment is possible. An investment in the Fund is thus designated
for sophisticated persons who are able to bear such risk of loss. The timing of profit realization is highly
uncertain. Losses are likely to occur early in the Fund’s term, while successes often require a long
maturation.

Early-stage and development-stage companies often experience unexpected problems in the areas of
product development, manufacturing, marketing, financing and general management, which, in some
cases, cannot be adequately solved. In addition, such companies may require substantial amounts of
financing which may not be available through institutional private placements or the public markets. The
percentage of companies that survive and prosper can be small.

Investments in more mature companies in the expansion or profitable stage involve substantial risks. Such
companies typically have obtained capital in the form of debt and/or equity to expand rapidly, reorganize
operations, acquire other businesses, or develop new products and markets. These activities by definition
involve a significant amount of change in a company and could give rise to significant problems in sales,
manufacturing, and general management of these activities.

In addition, the success of any venture is dependent upon the availability of high quality personnel.
Competition for qualified personnel at any stage of development can be intense. Turnover of personnel can
seriously disrupt a portfolio company’s business plan. Similarly, the ability of a portfolio company's
personnel to accept and make the transitions that occur as the company matures is difficult to predict or
manage. No assurance can be given that the Fund’s portfolio companies will be able to attract and retain
the qualified personnel necessary for success.

NATURE OF PRIVATE INVESTMENTS. Investment in the Fund requires a long-term commitment, with no
certainty of return. The Fund may invest in companies that are experiencing or are expected to experience
financial difficulties, which will require additional equity capital to be successful. Identifying potentially
profitable enterprises is a difficult task. The companies in which the Fund will invest may involve a high
degree of risk. Such companies may face intense competition, including competition from companies with
greater financial resources, more extensive development, manufacturing, marketing and service
capabilities, and a larger number of qualified managerial and technical personnel. Many of the Fund’s
investments will be highly illiquid, and there can be no assurance that the Fund will be able to realize a
return on such investments in a timely manner, if at all. Additionally, the Fund may acquire securities that
cannot be sold except pursuant to a registration statement filed under the Securities Act or in accordance
with Rule 144 of the Securities Act or another exemption under the Securities Act. There will likely be no
near-term cash flow available to investors. Since the Fund may only make a limited number of investments
and since many of the Fund’s investments may involve a high degree of risk, poor performance by a few of
the investments could severely affect the total returns to investors. Additionally, it should be noted that past
performance is not a guarantee of future results.

15

NO ASSURANCE OF THE GENERAL PARTNER'S SUCCESS IN LOCATING OR INVESTING IN PORTFOLIO COMPANIES.
There can be no assurance the General Partner will be able to locate suitable investments for the Fund. The
General Partner may not yet identified any specific investments to be made by the Fund, and, as a result,
prospective Partners will not have the opportunity to personally evaluate the relevant economic, business,
financial, and other information which will be used by the General Partner in making investment decisions.
Although the General Partner will attempt to make investments on behalf of the Fund which meet the criteria
set forth in this Memorandum, there is no assurance that such investments can be located. Market and
other conditions may require the Fund to make investments that offer a lower rate of return or involve a
higher degree of risk than described herein.

NO ASSURANCE OF RETURNS. There can be no assurance that the Limited Partners of the Fund will receive
distributions from the Fund in an amount equal to their investment in the Fund. The timing of profit
realization, if any, is highly uncertain. The Fund’s operating costs, including the management fee payable
to the General Partner, may exceed the Fund’s income, thereby requiring the difference to be paid out of the
Fund’s capital. Most of the capitalization of the Fund, except for operating cash reserves and funds set
aside for follow-on investments in the Fund's portfolio companies and investments then in process, are
expected to be invested or committed by the fifth anniversary of the Fund’s initial closing date. The
expenses of the Fund in its early years will likely exceed its income. Such losses will reduce Fund capital. It
is possible these losses may never be recovered.

INVESTMENT OBJECTIVES AND PERFORMANCE. There is no guarantee that the Fund will be able to achieve its
investment objectives. An investment in the Fund may not be profitable and is subject to the risk of total
loss. Historical information is not necessarily indicative of future performance.

LACK OF OPERATING HISTORY. The Fund and the General Partner are newly formed entities, and,
accordingly have limited operating history and no investments upon which investors can evaluate the
potential performance of the Fund. The prior performance of the Principals or industry as described in this
Memorandum is not necessarily indicative of the Fund’s future results. There can be no assurance that
investments by the Fund will achieve returns comparable to the historical performance reflected in this
Memorandum, and in any event, the returns achieved by the Fund will be subject to the management fee
and the General Partner’s carried interest. Any given investment made by the Fund may prove to be
worthless, and there is a risk that investors could lose money.

FORWARD LOOKING STATEMENTS. Certain information contained herein constitutes “forward-looking
statements” that can be identified by the use of forward-looking terminology such as “may,” “will,” “should,”
“expect,” “anticipate,” “estimate,” “intend,” “continue,” or “believe” or the negatives thereof or other
variations thereon or comparable terminology. Furthermore, any projections or other estimates in these
materials, including estimates of returns or performance, are “forward-looking statements” and are based
upon certain assumptions that may change. Due to various risks and uncertainties, actual events or results
or our actual performance may differ materially from those reflected or contemplated in such
forward-looking statements. Moreover, actual events are difficult to project and often depend upon factors
that are beyond the control of the Fund and affiliates.

ULTIMATE FUND SIZE. The number of investments and potential profitability of the Fund could be affected by
the amount of funds at its disposal, and, in the event the Fund obtains less than the target amount of capital
for investment, the Fund’s investment return might be affected to a greater degree by errors in investment
decisions than the investment returns of other entities with greater capitalization.

RELIANCE ON THE GENERAL PARTNER. The General Partner will have sole discretion over the investment of
the funds committed to the Fund as well as the ultimate realization of any profits. The Partners will not
receive the detailed financial information issued by portfolio companies or obligees to financing that will be
available to the Fund. Accordingly, the Partners will not have the opportunity to evaluate the relevant
economic, financial and other information that will be utilized by the General Partner in its selection of

16

investments. As such, the pool of funds in the Fund represents a blind pool of funds. Investors in the Fund
will be relying on the General Partner to identify, structure, and implement investments consistent with the
Fund’s investment objectives and policies and to conduct the business of the Fund as contemplated by this
Memorandum. The Partners will not make decisions with respect to the management, disposition or other
realization of any investment made by the Fund, or other decisions regarding the Fund’s business and
affairs.

RELIANCE ON THE PRINCIPALS. The loss of any of the Principals of the General Partner would have a
significant adverse impact on the business of the Fund and its financial performance. No assurances can
be given that any Principal will continue to be affiliated with the Fund throughout its term. Notwithstanding
any prior experience that the Principals may have in making investments of the type expected to be made
by the Fund, any such experience necessarily was obtained under different market conditions and with
different technologies at the forefront of development. There can be no assurance that the Principals will be
able to duplicate prior levels of success.

DEPENDENCE UPON KEY INDIVIDUALS. The future success of the Fund is dependent upon the activities of the
General Partner. Growth in the business of the Fund is dependent, to a large degree, on the General
Partner’s ability to retain and attract such key employees. The General Partner can make no assurance that
its current programs and other incentives will allow it to retain key employees or hire new employees.

THE COMPANY IS ESSENTIALLY AN UNDERWRITER OF RECEIVABLES AND DOES NOT HAVE ANY OPERATIONS. The
Company is underwriting receivables and does not have any operations. It is completely dependent
Company’s ability to succeed in the future is dependent on its ability to build or acquire the necessary
operational and organizational infrastructure, manage risk, and recruit experienced employees. In addition,
the Company operates in a highly regulated industry, and its future business may be adversely affected by
the legal and regulatory environment the Fund faces, which may change at any time and which is outside
the Fund’s control.

FOCUSED INVESTMENT STRATEGY. The Fund will generally be focused on investments ventures and financial
instruments in the cannabis and hemp industry that may not enjoy the reduced risks of a broadly diversified
portfolio. A specific investment focus is inherently more risky and could cause the Fund’s investments to be
more susceptible to particular economic, political, regulatory, technological or industry conditions or
occurrences compared with a fund, or a portfolio of funds, that is more diversified or has a broader industry
focus. Additionally, investments may be a partially blind pool and there may not be the opportunity to
evaluate investments prior to purchase or prior to your investment in Interests, which makes this investment
more speculative.

COMPETITION IN THE CONSUMER RECEIVABLES FINANCING INDUSTRY. The receivables financing industry is
highly competitive. The success or failure of the Company’s business will depend, in part, upon its ability to
purchase receivables of sufficient quality at discounts and upon advantageous terms, so that the Fund may
earn a sufficient return. The Company’s ability to invest and reinvest the funds a sufficient number of times
during the year is a factor which will determine the Fund’s profitability.

MISREPRESENTATIONS OR FRAUD BY SELLERS OF CONSUMER RECEIVABLES. A misrepresentation or fraudulent
act by a party being financed by the Fund could cause particular receivables to be uncollectible. In such
case, the Fund could suffer losses and lose its investment in part or in whole.

NO OPPORTUNITY TO EVALUATE ALL ASSETS. The Fund has not yet selected specific receivables to be
purchased in the future. Accordingly, the investors will not have the opportunity to evaluate the
reinvestments of proceeds of this offering or the merit or creditworthiness of any particular debtor with
respect to such receivables to be purchased in the future. Each investor must rely on the ability of the
General Partner based upon the criteria set forth herein to select consumer receivables and to manage and
operate its business.

17

CONSUMER PROTECTION LAWS. Numerous federal and state consumer protection laws and related
regulations impose substantial requirements upon lenders and servicers involved in finance. These laws
include the Truth-in-Lending Act, the Equal Credit Opportunity Act, the Federal Trade Commission Act, the
Community Reinvestment Act, the Fair Credit Reporting Act, the Fair Debt Collection Procedures Act, the
Magnuson-Moss Warranty Act, the Federal Reserve Board’s Regulations B and Z, state adoptions of the
National Consumer Act and of the Uniform Consumer Credit Code and state and sales finance and other
similar laws. Also, state laws impose finance charge ceilings and other restrictions on consumer
transactions and require contract disclosures in addition to those required under federal law. These
requirements impose specific statutory liabilities upon creditors who fail to comply with their provisions. In
some cases, this liability could affect the Fund’s ability to enforce consumer finance contracts such as the
receivables. The so-called “Holder-in-Due-Course” Rule of the Federal Trade Commission (the “FTC
Rule”), the provisions of which are generally duplicated by the Uniform Commercial Code, other state
statutes or the common law, has the effect of subjecting a seller in a consumer credit transaction (and
certain related creditors and their assignees) to all claims and defenses which the obligor in the transaction
could assert against the seller. Liability under the FTC Rule is limited to the amounts paid by the obligor
under the contract and the holder of the contract may also be unable to collect the balance remaining due
thereunder from the obligor. To the extent that any of the receivables will be subject to the requirements of
the FTC Rule, the Company, as the holder of the related receivables, may be subject to any claims or
defenses that the obligor on the receivable may assert against seller. Such claims are usually limited to a
maximum liability equal to the amounts paid by the obligor on the receivable. If this occurs the amount of the
receivable will be unavailable as a source of repayment of the Notes and if the amount of any such
uncollectible receivable exceeded a borrower’s financial ability to pay amounts due on the Notes, the Fund
could lose its investment in part or in whole.

OTHER LIMITATIONS. Laws limiting or prohibiting deficiency judgments, numerous other statutory provisions,
including federal bankruptcy laws and related state laws, may interfere with or affect the ability of the Fund
to collect upon a secured receivable or to realize upon collateral or to enforce a deficiency judgment against
the obligor. In a filing under any chapter of the federal bankruptcy laws, an obligor on a receivable may
receive a complete discharge from his obligation to pay the receivable and the Fund may recover nothing or
may only share generally in a bankrupt obligor’s assets available for distribution to creditors. In any situation
of an obligor’s bankruptcy, the automatic stay would delay the timing of payments to the Fund. State or
federal exemptions may include part or all of the collateral pledged for a secured receivable which would
prevent the Fund from realizing upon such collateral or obtaining the value thereof in a bankruptcy or
insolvency situation involving an obligor on a receivable. Also, under the federal bankruptcy law, a court
may prevent a creditor from repossessing any collateral, and, as a part of the rehabilitation plan, reduce the
amount of the secured indebtedness to the market value of the collateral at the time of the bankruptcy
leaving the creditor as a general unsecured creditor for the remainder of the indebtedness. A bankruptcy
court may also reduce the monthly payments due under a contract or change the rate of finance charge and
time of repayment of the indebtedness. It is also possible that any or all of the collateral securing a
receivable could be lost, damaged or destroyed without adequate insurance in which case, if the obligor
does not pay the receivable. In any of the foregoing situations, if the amount of any uncollectible receivable
exceeds the obligor’s financial ability to pay amounts due on the Notes, the Fund could lose its investment
in whole or in part.

THE COMPANY IS A FINANCING VEHICLE WITH LIMITED OPERATIONS. The Fund has been formed as a financing
vehicle to engage in purchase order financing secured upon receivables in the cannabis and hemp industry.
The Fund has limited operations and will contract all of its servicing and collection duties to Blu Rock
Financial, LLC. The Fund has no control over the performance of its portfolio and is dependent on Blu Rock
Financial, LLC ability to successfully service and collect on the debt. Blu Rock Financial, LLC’s inability to
collect on the debt will adversely affect the Fund. In addition, any default by Blu Rock Financial, LLC with
regard to any account, consumer or otherwise any violation of any applicable law with regard to the
servicing of its purchase money financing will directly impact its ability to service the Fund’s portfolio.

18

CERTAIN MEMBERS OF THE GENERAL PARTNER MAY HAVE INTERESTS THAT COMPETE WITH THOSE OF THE
COMPANY. The Principals of the General Partner of the Fund may provide services for other entities with
objectives similar to the Fund. If a business opportunity is deemed suitable for both the Fund and one or
more of such additional entities, the Principals of the General Partner will attempt to determine the entity for
which the business opportunity is most appropriate. However, the Principals of the General Partner and its
subsidiaries are not required to allow the Fund to participate in any such opportunities. The Principals of the
General Partner owe fiduciary duties to the General Partner and to the Fund but have also made equity
investments in the Fund. In addition, these Principals of the General Partner may choose to engage in
purchase order money financing on the same terms and conditions as others. This creates the potential
that, in making decisions for the Fund, the Principals of the General Partner may be influenced by (i) their
equity position in the General Partner and the Fund and (ii) the financing opportunity they invest in.

GENERAL PARTNER HAS BROAD DISCRETION IN USE OF PROCEEDS. The General Partner anticipates utilizing
the proceeds from the purchase money financing to finance other purchase money order financing
opportunities. The General Partner will retain broad discretion to allocate the proceeds of this offering as
well as the timing of its expenditures. Investors will not have the opportunity to evaluate the economic,
financial or other information that the General Partner may use to determine how it uses these proceeds.
The General Partner’s failure to apply these funds effectively could have a material adverse effect on the
Fund’s business.

THE FUND MAY NOT BE ABLE TO ENGAGE IN PURCHASE ORDER MONEY FINANCING AT FAVORABLE TERMS OR
AT ALL. The Fund’s ability to execute its business strategy depends upon the continued availability to
finance in the cannabis and hemp industry. The availability of obligors at on terms acceptable to the Fund
depend on a number of factors outside of its control, including: the continuation of the current growth trend
in debt; the continued volume of marijuana and hemp and related sales; competitive factors affecting
potential lenders of purchase money financing secured upon receivables. The market for purchase order
financing secured by receivables is becoming more competitive, thereby possibly diminishing the Fund’s
ability to make financing on attractive terms in future periods. The growth in debt may also be affected by: a
continued slowdown in the economy; continued reductions in consumer spending on cannabis and hemp
products; changes in laws and regulations governing lending and bankruptcy; and fluctuation in interest
rates.

COLLECTIONS MAY DECREASE IF BANKRUPTCY FILINGS INCREASE. During times of economic recession, the
amount of default generally increases, which contributes to an increase in the amount of bankruptcy filings.
Under certain bankruptcy filings an obligor’s assets are sold to repay credit originators, but since certain of
the receivables purchased may be unsecured, the Fund often would not be able to collect on those
receivables. There are no assurances being made that Blu Rock Financial, LLC’s collections would not
decline with an increase in bankruptcy filings. If actual collections are lower than projected when the loan
was made, realization on the secured assets may decline and the Fund’s revenue could be negatively
affected.

DIFFICULTY IN VALUING PORTFOLIO INVESTMENTS. Generally, there will be no readily available market for a
substantial number of the Fund’s investments and hence, most of the Fund’s investments will be difficult to
value. Due to the absence of readily available market valuations or market quotations for securities of the
Fund’s privately held portfolio companies, the valuation of the Fund's investments in such portfolio
companies is determined in good faith by the General Partner; the Fund is not required to have such
valuations independently determined. Despite the General Partner’s efforts to acquire sufficient information
to monitor certain of the Fund’s investments and make well-informed valuation and pricing determinations,
the General Partner may only be able to obtain limited information at certain times. It is possible that the
General Partner may not be aware on a timely basis of material adverse changes that have occurred with
respect to certain of the Fund’s investments. The General Partner may have to make valuation
determinations without the benefit of an adequate amount of relevant information. Prospective investors
should be aware that as a result of these difficulties, as well as other uncertainties, any valuation made by
the General Partner may not represent the fair market value of the securities acquired by the Partnership.

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COMPETITIVE MARKETPLACE. The marketplace for fund capital investing has become increasingly
competitive. Participation by financial intermediaries has increased, substantial amounts of funds have
been dedicated to making investments in the private sector and the competition for investment
opportunities is at high levels. Some of the Fund’s potential competitors may have greater financial and
personnel resources than the General Partner. There can be no assurances that the General Partner will
locate an adequate number of attractive investment opportunities. To the extent that the Fund encounters
competition for investments, returns to investors in the Fund may vary.

FEDERAL REGULATION OF THE CANNABIS AND HEMP INDUSTRY. The Fund does not grow or distribute
marijuana and/or hemp, however, the provision of services to state-approved marijuana and/or hemp
growers and dispensary facilities could be deemed to be aiding and abetting illegal activities, a violation of
federal law (notwithstanding applicable state law). The General Manager and Fund intends to remain within
the guidelines outlined by the Federal Government, which does not alter the Department of Justice's
authority to enforce federal law (including federal laws relating to marijuana and hemp), but does
recommend that U.S. Attorneys prioritize enforcement of federal law away from the marijuana and hemp
industry operating as permitted under certain state laws, so long as certain conditions are met. Where the
individual state framework fails to protect the public, the Justice Department has instructed federal
prosecutors to enforce the Controlled Substances Act of 1970. However, the General Manager and Fund
cannot provide assurance that it will be in full compliance with all federal laws or regulations.

The Fund’s ongoing and future business plans rely on our ability to successfully establish and maintain
effective controls that follow the United States Treasury Department’s Financial Crimes Enforcement
Network (“FinCEN”) Guidance, “BSA Expectations Regarding Marijuana-Related Businesses,” in vetting
and monitoring potential customers and clients. FinCEN has issued guidance to clarify Bank Secrecy Act
(“BSA”) expectations for financial institutions seeking to provide services to marijuana-related businesses.
FinCEN issued this guidance in light of certain state initiatives to legalize certain marijuana-related
enforcement priorities. The FinCEN guidance clarifies how financial institutions can provide services to
marijuana-related businesses consistent with their BSA obligations, and aligns the information provided by
financial institutions in BSA reports with federal and state law enforcement priorities. This FinCEN guidance
is intended to enhance the availability of financial services for, and the financial transparency of,
marijuana-related businesses.

While the Fund is not currently subject to the BSA or FinCEN guidelines, it will institute policies and
procedures that mirror the stated goals of the FinCEN guidelines and will provide a framework by which it
believes can comply with the federal government’s stated objectives with respect to the potential conflict of
law. The Fund plans to use the FinCEN Guidelines, as may be amended, as the basis for assessing its
relationships with potential investments.

AMBIGUITY IN FEDERAL AND STATE ENFORCEMENT OF CONTROLLED SUBSTANCES. Despite the development of
a legal marijuana and hemp industry under the laws of certain states, these state laws legalizing medical
and adult cannabis and hemp use are in conflict with the Federal Controlled Substances Act, which
classifies marijuana and hemp as a Schedule-I controlled substance and makes marijuana and hemp use
and possession illegal on a national level without additional authority or permits. The United States
Supreme Court has ruled that it is the federal government that has the right to regulate and criminalize
marijuana, even for medical and non-drug purposes, and thus federal law criminalizing the use of marijuana
preempts state laws that legalize its use. Although the Obama Administration has stated that it is not an
efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by
state-designated laws allowing the use and distribution of medical and recreational marijuana. Yet, there is
no guarantee that the Obama Administration will not change its stated policy regarding the low-priority
enforcement of federal laws in states where marijuana has been legalized. Additionally, there will be
another presidential election cycle in 2016, and a new administration could introduce a less favorable policy
or decide to enforce the federal laws stringently. Any such change in the federal government’s enforcement
of federal laws could cause significant financial damage to the Fund.

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LITIGATION BY STATES AFFECTED BY MARIJUANA LEGALIZATION. Due to variations in state law among states
sharing borders, certain states which have not approved any legal sale of marijuana may seek to overturn
laws legalizing medical and recreational cannabis and hemp use in neighboring states. For example, in
December 2014, the attorneys general of Nebraska and Oklahoma filed a complaint with the U.S. Supreme
Court against the state of Colorado arguing that the Supremacy Clause (Article VI of the Constitution)
prohibits Colorado from passing laws that conflict with federal anti-drug laws and that Colorado’s laws are
increasing marijuana trafficking in neighboring states that maintain marijuana and/or hemp bans, thereby
putting pressure on such neighboring states' criminal justice systems. It is possible that the Supreme Court
could agree to hear this case and rule that Colorado’s legislation is unconstitutional, resulting in legal action
against other states with laws legalizing medical and/or recreational cannabis and/or hemp use. Successful
prosecution of such legal actions by non-marijuana states would have significant negative effects on the
Fund.

STATE LAWS AND REGULATION. Where applicable, the Fund will apply for state licenses that are necessary to
conduct our business in compliance with local laws. In addition, continued development of the marijuana
and hemp industry is dependent upon continued legislative authorization of marijuana and hemp at the
state level. Any number of factors could slow or halt progress in this area. Further, progress is not assured.
While there may be public support for legislative action, numerous factors impact the legislative process.
Any one of these factors could slow or halt use of marijuana and/or hemp, which would negatively impact
the Fund.

GENERAL LENDING RISKS. The Fund will be subject to risks generally incidental to the lending industry,
including: (i) changes in general economic or local conditions; (ii) changes in supply of, or demand for,
similar or competing lenders in the area; (iii) bankruptcies, financial difficulties or defaults by other lenders,
dispensaries, cultivation facilities; (iv) increases in operating costs, such as taxes and insurance; (v) the
inability to achieve full and expected interest rate returns and tightening of money supply which are directly
tied to Federal Reserve policy; (vi) excess supply of loans in the market area; (vii) liability for uninsured
losses resulting from natural disasters or other perils; (viii) liability for environmental hazards; and (ix)
changes in tax, real estate, environmental, or other laws or regulations.

COMPETITION. Currently, there are no known companies that are providing services similar to the Fund in
the cannabis and/or hemp industry, however other companies may start in this space, some of which may
be considered to be competition that provide similar products and/or services. In the future, the Fund
expects that other companies will recognize the value of ancillary businesses serving the cannabis and/or
hemp industry and enter into the marketplace as competitors. There is a risk that such competition will
reduce the number of available clients that require financing, increase prices and costs of lending, and
reduce profitability. In addition, potential competitors could duplicate the Fund’s business model. Some
potential competitors may have significantly greater resources, which may make it difficult for the Fund to
compete. There can be no assurance that the Fund will be able to successfully compete against these other
entities.

LIMITED AVAILABILITY OF CUSTOMERS. Our business plan involves lending into the cannabis and/or hemp
industry through partner companies with significant contacts and relationships within the cannabis and/or
hemp industry. The future limitations on licensing, such as moratoriums, along with restrictions on zoning
and operational restrictions on cannabis and/or hemp industry participants may limit the availability of
companies suitable for the Fund. There can be no assurance that the Fund will be able to overcome such
limitations in any given market.

POTENTIAL INABILITY TO EXPAND INTO NEW MARKETS. The Fund intends to continue to pursue an aggressive
growth strategy for the foreseeable future. The continued growth and profitability depends on the Fund’s
ability to successfully realize its growth strategy by expanding to various states. The Fund cannot assure
that its efforts to expand into new markets will succeed. In order to operate in new markets, the Fund may
need to modify its existing business model and cost structure to comply with local regulatory or other
requirements, which may expose it to new operational, regulatory or legal risks. In addition, expanding into

21

new states may subject the Fund to unfamiliar or uncertain local regulations that may adversely affect its
operations and ability to provide sufficient financing. Facilities that open in new markets may also take
longer to reach expected revenue and profit levels on a consistent basis and may have higher construction,
occupancy or operating costs than facilities that have been open in existing markets, thereby affecting our
overall profitability. New markets may have competitive conditions, consumer preferences and spending
patterns that are more difficult to predict or satisfy than existing markets.

EXPANSION OF CUSTOMER FINANCING BASE. The Fund’s success and the planned growth and expansion of
the business depends on our achieving greater and broader acceptance of its services and expanding its
customer financing base to qualified operators. There can be no assurance that the Fund will continue to
expand its customer base. If the Fund is unable to effectively market or expand its finance offerings, it will
be unable to grow and expand the business or implement the business strategy, which could materially
impair its ability to increase sales and revenue.

DILUTION RISK. The Fund may continue to raise capital to operate and fund the business plan. Any future
sale of Interests may dilute the ownership of existing investors and could be at amounts below those paid by
earlier investors.

SIGNIFICANT OPPOSITION BY COMPETITORS. Large and well-funded businesses may have a strong economic
opposition to the cannabis and/or hemp industry. For example, the medical marijuana industry could face a
material threat from the pharmaceutical industry, should marijuana displace other drugs or encroach upon
the pharmaceutical industry’s products. The pharmaceutical industry is well funded with a strong and
experienced lobby that eclipses the funding of the medical marijuana industry. Any inroads the
pharmaceutical industry could make in halting or impeding the marijuana industry could have a detrimental
impact on the Fund.

INABILITY OF POTENTIAL LICENSED MARIJUANA ENTITIES TO CONDUCT BUSINESS WITH BANKS. While the Fund
believes it has successfully resolved the legal banking and credit card merchant processing, it cannot
guarantee that lending practices, banking, and credit card acceptance will continue on a large or small
scale. Since the use of marijuana is illegal under federal law, many banks will not accept for deposit funds
from businesses involved with marijuana and/or hemp. Consequently, businesses involved in the marijuana
industry often have trouble finding a bank willing to accept their business. The inability to open bank
accounts may make it difficult for potential customers and clients to operate.

UNCERTAINTY AND CHANGE IN REGULATIONS. Local and state marijuana laws and regulations are broad in
scope and subject to evolving interpretations and revisions, which could require the Fund to incur
substantial costs associated with compliance or alter its business plan. In addition, violations of these laws,
or allegations of such violations, could disrupt the cannabis and/or hemp industry and result in a material
adverse effect on the Fund’s operations. Furthermore, it is possible that regulations may be enacted in the
future that will be directly applicable to the business plan. It is not possible to predict the nature of any future
laws, regulations, interpretations or applications, nor can it be determined what effect additional
governmental regulations or administrative policies and procedures will have on the Fund.

CHANGING ECONOMIC CONDITIONS. The success of the General Partner’s investment strategy could be
significantly impacted by changing external economic conditions in the United States and global
economies. The stability and sustainability of growth in global economies may be impacted by terrorism or
acts of war. The availability, unavailability, or hindered operation of external credit markets, equity markets
and other economic systems which the Fund may depend upon to achieve its objectives may have a
significant negative impact on the Fund’s operations and profitability. There can be no assurance that such
markets and economic systems will be available or will be available as anticipated or needed for the Fund to
operate successfully. Changing economic conditions could potentially adversely impact the valuation of
portfolio holdings.

22

EXTREMELY COMPETITIVE INDUSTRY. The Fund will be competing with many other entities for investment
targets including but not limited to corporations, banks and insurance company investment accounts,
investment partnerships which may have significantly greater resources than the Fund.

MINORITY INVESTMENTS. A portion of the Fund’s investments may represent minority stakes in privately held
companies. In addition, during the process of exiting investments, the Fund may hold minority equity stakes
if portfolio holdings are taken public. As is the case with minority holdings in general, such minority stakes
that the Fund may hold will have neither the control characteristics of majority stakes nor the valuation
premiums accorded majority or controlling stakes. The Fund may also invest in companies for which the
Fund has no right to appoint a director or otherwise exert significant influence. In such cases, the Fund will
be reliant on the existing management and board of directors of such companies, which may include
representatives of other financial investors with whom the Fund is not affiliated and whose interests may
conflict with the interests of the Fund.

NO ASSURANCE OF ADDITIONAL CAPITAL FOR INVESTMENTS. After the Fund has financed a company, continued
development and marketing of products and assets may require that additional financing be provided. The
Fund expects to invest in companies that have substantial capital needs that are typically funded over several
stages of investment. No assurance can be given that such additional financing will be available and no
assurance can be made as to the terms upon which such financing may be obtained or that such additional
capital will be available on favorable terms or at all. Alternatively, the Fund, either directly or through one of its
portfolio companies, may elect to sell developed or undeveloped assets to existing companies. No assurance
can be made that buyers for such assets can be located or that the terms of any such sales will be
advantageous.

INTEREST RATES. If interest rates go up it may increase the amount of the Fund’s debt payments and
adversely affect the Fund’s ability to make additional investments and distributions.

FUTURE AND PAST PERFORMANCE. The performance of the prior investments and experience of the
Principals of the General Partner may not be indicative of the Fund’s future results. While the General
Partner intends for the Fund to make investments that have estimated returns commensurate with the risks
undertaken, there can be no assurance that targeted results will be achieved. Loss of principal is possible
on any given investment. There can be no assurance that the Fund will achieve its investment objective
over the long-term.

BRIDGE FINANCING. The Fund may lend to portfolio companies on a short-term, unsecured basis in
anticipation of a future issuance of equity or long-term debt. Such bridge loans would typically be
convertible into a more permanent, long-term security; however, for reasons not always in the Fund’s
control, such long-term securities may not issue and such bridge loans may remain outstanding. In such
event, the interest rate on such loans may not adequately reflect the risk associated with the unsecured
position taken by the Fund.

LEVERAGE. To the extent that any investment is made in a portfolio company with a leveraged capital
structure or any portfolio company borrows or enters into other financing transactions requiring periodic
payments, such investment will be subject to increased exposure to adverse economic factors such as a
significant rise in interest rates, a severe downturn in the economy or deterioration in the condition of such
company or its industry. If such a company is unable to generate sufficient cash flow to meet principal and
interest payments on its indebtedness, the value of any equity investment by the Fund in such company
could be significantly reduced or even eliminated.

LIMITATIONS ON ABILITY TO EXIT INVESTMENTS. The General Partner expects to exit from its investments in
two principal ways: (i) private sales (including acquisitions of its portfolio companies) and (ii) initial and
secondary public offerings. At any particular time, one or both of these avenues may not be open to the
Fund, or timing with respect to these exit mechanisms may be inopportune. As such, the ability to exit from
and liquidate portfolio holdings may be constrained at any particular time.

23

POTENTIAL LIABILITIES. In connection with its investments, the Fund may negotiate the right to appoint one
or more of the Principals of the General Partner as a member of the portfolio company’s board of directors.
Such membership on the board of directors of a company can result in the Fund or the individual director
being named as a defendant in litigation or other disputes or investigations. The Fund may also participate
in portfolio company financings at valuations lower than the valuations in preceding rounds of financing.
Disputes arising out of such down-round financings may result in the Fund, the General Partner, or its
partners being named as defendants. Typically, portfolio companies will have insurance to protect directors
and officers, but this insurance may be inadequate. The Fund will also indemnify the General Partner, its
Principals, the Management Company and their respective affiliates, among others, for liabilities incurred in
connection with operations of the Fund, including liabilities arising from such disputes. Such
indemnification obligations and other liabilities could be substantial. The Partners may also be required to
return distributions previously made to them to satisfy the Fund’s indemnification obligations. While the
General Partner intends to manage the Fund in a way that will minimize exposure to these risks, the
possibility of successful claims or lawsuits or adverse regulatory action cannot be eliminated, and such
events could have significant adverse effects on the Fund.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF FUND PERSONNEL. The General Partner, as a result of its
various relationships to the Fund, has a fiduciary relationship to the Fund and the Partners. The
Partnership Agreement and the General Partner’s operating agreement provide limitations on the General
Partner's liability to the Fund, and provide for indemnification of the General Partner and related persons
under certain circumstances. Purchasers of Interests may have more limited rights than they would have
absent such limitations.

CONTINGENT LIABILITIES ON DISPOSITION OF INVESTMENTS. In connection with the disposition of an
investment in a portfolio company, the Fund may be required to make representations about the business
and financial affairs of such company typical of those made in connection with the sale of a business. To
the extent that any such representations are inaccurate, the Fund may be required to indemnify the
purchasers of such investment and may be liable to the purchasers for breach of contract. These
arrangements may result in the incurrence of contingent liabilities for which the General Partner may
establish reserves and escrows. In that regard, distributions may be delayed or withheld until such reserve
is no longer needed or the escrow period expires. The Partners may also be required to return distributions
previously made to them to satisfy the Fund’s obligations with respect to the foregoing.

RESERVES. As is customary in the industry, the General Partner may establish reserves for follow-on
investments by the Fund, operating expenses (including the management fee), Fund liabilities, and other
matters. Estimating the appropriate amount of such reserves is difficult, especially for follow-on investment
opportunities, which are directly tied to the success and capital needs of portfolio companies. Inadequate
or excessive reserves could impair the investment returns to the Partners. If reserves are inadequate, the
Fund may be unable to take advantage of attractive follow-on or other investment opportunities or to protect
its existing investments. If reserves are excessive, the Fund may decline attractive investment
opportunities or hold unnecessary amounts of capital in money market or similar low-yield accounts.

ABSENCE OF LIQUIDITY AND PUBLIC MARKETS. The Fund’s investments will generally be private, illiquid
holdings. As such, there will be no public markets for the securities held by the Fund and no readily
available liquidity mechanism at any particular time for any of the investments held by the Fund. The
Interests will not be redeemable at the option of the holder and may not be sold or transferred without
compliance with all applicable U.S. federal and state and non-U.S. securities laws. In addition, the
realization of value from any investments will not be possible or known with any certainty until the General
Partner elects, in its sole discretion, to sell the Fund’s investments and subsequently distribute the
proceeds to its investors or to distribute securities or financial instruments to investors in lieu of cash. We
may re-invest excess cash in connection with the acquisition of additional assets, thereby decreasing cash
available for distributions. In addition, distributions are not guaranteed. The Fund may not be able to pay or
maintain cash distributions and they are subject to change at any time. The payment of distributions will
depend on earnings, financial condition and other business and economic factors affecting it at such time as

24

the General Partner may consider relevant. The General Partner’s current intention is to apply net earnings
to increasing the Fund’s capital base.

NO MARKET; ILLIQUIDITY OF PARTNER INTERESTS. An investment in the Fund will be illiquid and involves a
high degree of risk. There is no public market for the Interests in the Fund, and it is not expected that a
public market will develop. Consequently, Partners will bear the economic risks of their investment for the
term of the Fund. Prospective investors will be required to represent and agree that they are purchasing the
Interests for their own account for investment only and not with a view to the resale or distribution thereof.
There will be limitations on ownership and transferability of Interests. The holders of Interests will have
limited or no rights to withdraw their capital, as further described in this and additional offering documents.

CERTAIN LIMITATIONS ON ABILITY OF PARTNERS TO TRANSFER THEIR INTERESTS IN THE FUND. The
transferability of interests in the Fund will be restricted by the Partnership Agreement and by United States
federal and state securities laws. In general, Partners will not be able to sell or transfer their interests in the
Fund to third parties without the consent of the General Partner. Voluntary withdrawals by the Partners are
permitted under specific circumstances described in the Partnership Agreement.

LEGAL AND REGULATORY RISKS. The Fund is not and does not expect to be registered as an “investment
company” under the United States Investment Company Act of 1940, as amended (the “Investment
Company Act”), pursuant to an exemption set forth in Sections 3(c)(1) and/or 3(c)(7) of the Investment
Company Act. There is no assurance that such exemptions will continue to be available to the Fund. Due
to the burdens of compliance with the Investment Company Act, the performance of the Fund’s investment
portfolio could be materially adversely affected, and risks involved in financing portfolio companies could
substantially increase, if the Fund becomes subject to registration under the Investment Company Act.
Neither the Fund nor its counsel can assure investors that, under certain conditions, changed
circumstances, or changes in the law, the Fund may not become subject to the Investment Company Act or
other burdensome regulation. In addition, neither the General Partner, the Management Company nor their
affiliates are registered, and do not currently expect to register, as an “investment adviser” under the United
States Investment Advisers Act of 1940, as amended (the “Advisers Act”). In addition, the Fund does not
plan to register the offering of the Interests to the Partners under the United States Securities Act of 1933,
as amended (the “Securities Act”). As a result, Partners will not be afforded the protections of such Acts
with respect to their investment in the Fund. Neither the U.S. Securities and Exchange Commission (the
“SEC”) nor any state or non-U.S. securities commission or other agency has reviewed or passed upon the
accuracy or adequacy of these materials nor the merits of the offering described herein. Any representation
to the contrary is unlawful.

TAX RISKS. Certain tax risks relating to an investment in the Fund are discussed in “Certain Other Tax and
Regulatory Considerations,” which prospective investors should read carefully. No assurances can be
given that current tax laws, rulings and regulations will not be changed during the life of the Fund. The
General Partner intends to structure the Fund’s investments in a manner that is intended to achieve the
Fund’s investment objectives and, notwithstanding anything contained herein to the contrary, there can be
no assurance that the structure of any investment will be tax efficient for any particular investor or that any
particular tax result will be achieved. In addition, as a result of the investment activities of the Fund, the
Fund may generate significant taxable income which will flow through to the Partners. The Partnership
Agreement permits the Fund to make an annual tax distribution to the Partners in the amount specified
therein. However, the Fund’s ability to make such a distribution will be dependent upon the availability of
cash. If the Fund is unable to make distributions to the Partners, the Partners may incur tax liabilities
without receiving corresponding cash distributions to pay such taxes. Prospective Partners should consult
their tax advisors for further information about the tax consequences of purchasing an Interest in the Fund.

WITHHOLDING AND OTHER TAXES. Certain tax reporting requirements may be imposed on investors under
the laws of the jurisdictions in which investors are liable for taxation or in which the Fund makes portfolio
investments. Prospective investors should consult their own professional advisors with respect to the tax
consequences to them of an investment in the Fund under the laws of the jurisdiction in which they are

25

liable for taxation. Furthermore, the Fund’s returns in respect of its investments may be reduced by
withholding or other taxes imposed by jurisdictions in which the Fund’s portfolio companies are organized.

CONFLICTS OF INTEREST. The following discussion enumerates certain potential conflicts of interest that
should be carefully evaluated before making an investment in the Fund. The following is not intended as an
exhaustive list of the potential conflicts. Instances may arise where the interest of the General Partner (or
its members), the Management Company, the Principals and/or their affiliates may potentially or actually
conflict with the interests of the Fund and the Partners. For example, the existence of the General Partner’s
carried interest may create an incentive for the General Partner to make more speculative investments on
behalf of the Fund than it would otherwise make in the absence of such performance-based arrangements.
Additionally, the Principals and other members of the General Partner will not be required to manage the
General Partner or the Fund as their sole and exclusive function, and are entitled to have other business
interests and may engage in other business activities in addition to those relating to the Fund. The General
Partner or Principals may also form and devote their time to other investment partnerships with activities
similar to those of the Fund. The Partnership Agreement includes a waiver of any claim with respect to such
conflict of interest by the Limited Partners. The Principals and General Partner may also have conflicts of
interest in allocating time, services and functions among the Fund and other business ventures. Conflicts
may arise in the allocation of investment opportunities and the Principals’ time among the Fund, on the one
hand, and existing investments managed by the Principals as well as future funds organized in accordance
with the Partnership Agreement and other business activities, on the other hand. The Principals and
General Partner are not required to refrain from such management activities or to disgorge profits from such
activities.

Further, the Fund may make investments in companies or assets wherein the Principals have a direct or
indirect ownership interest.

By acquiring an Interest in the Fund, each Partner will be deemed to have acknowledged the existence of
any such actual or potential conflicts of interest and to have waived any claim with respect to any liability
arising from the existence of any such conflicts of interest.

CARRIED INTEREST; PARTNER QUALIFICATIONS. The carried interest allocable to the General Partner may
create an incentive for the General Partner to cause the Fund to make investments that are riskier or more
speculative than would be the case if this incentive allocation were not so allocable. In addition, if the
General Partner is required to register as an investment adviser under the Advisers Act, all of the Fund’s
Partners will be required to be both “accredited investors” under the Securities Act and the rules and
regulations promulgated thereunder, as well as “qualified clients” under the Advisers Act and the rules and
regulations promulgated thereunder. These requirements could narrow the pool of potential investors in,
and aggregate capital commitments to, the Fund, and could also result in burdensome and costly
compliance requirements on the General Partner.

DIVERSE INVESTORS. The Partners may have conflicting investment, tax, and other interests with respect to
their investments in the Fund. The conflicting interests of individual Partners may relate to or arise from,
among other things, the nature of investments made by the Fund, the structuring or the acquisition of
investments and the timing of disposition of investments. As a consequence, conflicts of interest may arise
in connection with decisions made by the General Partner with respect to the nature or structuring of
investments that may be more beneficial for some Partners than for others, particularly with respect to
investors’ individual tax situations. In selecting and structuring investments appropriate for the Fund, the
General Partner will consider the investment and tax objective of the Fund and the Partners as a whole, not
the investment, tax or other objective of any Partner individually.

RISK OF DILUTION. Partners subscribing for interests at subsequent closings will participate in existing
investments of the Fund, diluting the interest of existing Partners therein. Although such Partners will
contribute their pro rata share of prior capital contributions previously drawn down by the Fund (plus an

26

additional amount thereon), there can be no assurance that such payment will reflect the fair value of the
Fund’s existing investments at the time such additional Partners subscribe for such interests.

FAILURE TO MAKE CAPITAL CONTRIBUTIONS. If a Partner fails to pay when due installments of its capital
commitment to the Fund, and the contributions made by non-defaulting Partners and borrowings by the
Fund are inadequate to cover the defaulted capital contribution, the Fund may be unable to pay its
obligations when due. As a result, the Fund may be subjected to significant penalties that could materially
and adversely affect the returns to the Partners (including non-defaulting Partners). If a Partner defaults, it
may be subject to various remedies as provided in the Partnership Agreement, including a forfeiture of all or
part of such defaulting Partner’s Interests in the Fund.

CONFIDENTIAL INFORMATION. The Partnership Agreement will contain confidentiality provisions intended to
protect proprietary and other information relating to the Fund and the Fund’s portfolio companies. To the
extent that such information is publicly disclosed, competitors of the Fund and/or competitors of its portfolio
companies, and others, may benefit from such information, thereby adversely affecting the Fund, its
portfolio companies, the General Partner and the economic interests of Partners.

COUNSEL AND ADVISORS TO THE FUND DO NOT REPRESENT THE PARTNERS. The General Partner has
retained Hasan, LLC in connection with the formation of the Fund. Neither the Fund, nor potential investors
in the Fund as a group, nor the Partners as a group, are or have been represented by separate counsel.
Hasan, LLC will not represent any Partner or prospective partner of the Fund, unless the General Partner
and such Partner or prospective partner otherwise agree and such Partner or prospective partner
separately engages Hasan, LLC, in connection with the formation of the Fund, the offering of the Interests,
the management and operation of the Fund or any dispute that may arise between any Partner, on the one
hand, and the General Partner, the Fund and/or their affiliates on the other hand (the “Fund Legal
Matters”), and Hasan, LLC disclaims any fiduciary or attorney-client relationship with the Partners in
respect of the Fund Legal Matters. Any Partner or prospective partner will, if it desires counsel on any Fund
Legal Matter, retain its own independent counsel with respect thereto and will pay all fees and expenses of
such independent counsel. Each Partner and prospective partner acknowledges that Hasan, LLC may
represent the General Partner and/or the Fund in connection with any and all Fund Legal Matters.
Furthermore, all of the attorneys, accountants and other experts who perform services for the General
Partner on behalf of the Fund, all perform services for the General Partner and do not represent or perform
services for the Partners.

AUDITS BY THE IRS. The possibility exists that the tax returns of the Fund will be examined by the IRS. Such
an examination could result in adjustments to the tax consequences initially reported by the Fund. An audit
of Fund items will be conducted as a single proceeding at the Fund level. The General Partner will have
authority to make decisions during the course of the audit and in subsequent administrative and judicial
proceedings that could affect and be binding upon all Partners of the Fund. An examination by the IRS of
the Fund’s tax returns could also result in audits of the Fund Partners’ separate income tax returns and any
such audits could involve items not related to their investment in the Fund, as well as their Fund investment.

The foregoing risks do not purport to be a complete explanation of all the risks involved in
acquiring an Interest in the Fund. Potential investors are urged to read this entire Memorandum
and the Partnership Agreement before making a determination whether to invest in the Fund.

27

Certain Other Tax and Regulatory Considerations

A. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

Set forth below is a discussion, in summary form, of certain federal income tax consequences relating to an
investment in the Fund. This summary does not attempt to present all aspects of the federal income tax
laws or any state, local or foreign laws that may affect an investment in the Fund. In particular, foreign
investors, financial institutions, insurance companies, tax-exempt entities and other investors of special
status must consult with their own professional tax advisors. No ruling has been or will be requested from
the Internal Revenue Service (the “IRS”) and no assurance can be given that the IRS will agree with the tax
consequences described in this summary. Tax laws and administrative rules may change, sometimes with
retroactive effect. Each prospective Limited Partner should consult with its own tax adviser in order to fully
understand the federal, state, local and foreign income tax consequences of an investment in the Fund.

Partnership Status. The Fund will be classified and reported as a partnership for federal income tax
purposes.

Taxation of Partners. Each Partner of the Fund will report on its federal income tax return its distributive
share of the Fund’s items of income, gain, loss, deduction and credit for the taxable year. The character of
such items, determined at the Fund level, will pass through to the Partners (for example, Partners will treat
as interest, dividends or capital gain, their distributive shares of such items recognized by the Fund).

Each Partner will be required to report on its federal income tax return its distributive share of any income or
gain recognized by the Fund, whether or not amounts representing such distributive share have been
distributed to it.

Distributions from the Fund, whether made currently or upon liquidation of the Fund, generally may be
received by a Partner without further tax. The general rules relating to the tax treatment of distributions to
the Partners may be summarized as follows:

 Cash distributions will not be taxable to a Partner except to the extent they exceed the

Partner’s tax basis for its interest in the Fund. The excess generally would be taxable as
long-term or short-term capital gain, depending on the Partner’s holding period for its Fund
interest;

 In-kind distributions of portfolio securities or other assets of the Fund generally will not be

taxable to the recipient Partner or the Fund. A Partner that receives a distribution of
marketable securities from a partnership generally is required to recognize taxable gain to
the extent that the fair market value of the distributed securities exceeds the Partner’s tax
basis in its partnership interest. There are a number of exceptions to this rule, including an
exception for distributions by qualified “investment partnerships.” It is expected that the
Fund will qualify as an “investment partnership” and that, accordingly, distributions of
marketable securities by the Fund generally will not give rise to the current recognition of
taxable gain;

 For purposes of determining a Partner’s gain or loss on a subsequent sale of the Fund’s

assets distributed in-kind (other than in liquidation of the Partner’s interest in the Fund), the
Partner’s tax basis for such assets will be equal to the Fund’s adjusted basis for the assets
or, if less, the Partner’s tax basis for its Fund interest immediately before the distribution. A
Partner’s tax basis for assets distributed in liquidation of its Fund interest will be equal to its
tax basis in its Fund interest. The Partner’s capital gain holding period for assets

28

distributed without the recognition of gain will include the period during which the assets
were held by the Fund; and

 No loss will be recognized by a Partner upon the receipt of a distribution from the Fund

except where the distribution is a liquidating distribution consisting solely of cash and the
amount of cash is less than the Partner’s tax basis in its Fund interest immediately before
the distribution.

Deductions. Subject to certain limitations described below, a Partner will be entitled to deduct on its
federal income tax return its distributive share of Fund loss, but not in excess of its tax basis in its Fund
interest. If a Partner’s distributive share of Fund loss exceeds the Partner’s tax basis in its Fund interest,
such excess may not be deducted but will be carried over and become deductible in any later year if and to
the extent the Partner’s tax basis exceeds zero and such loss carryover is otherwise deductible. Each
Limited Partner should have a sufficient tax basis in its Fund interest to deduct losses up to an amount
equal to its cash investment in the Fund.

The “at risk” provisions of Section 465 of the Internal Revenue Code of 1986, as amended (the “Code”),
impose additional limitations on the deductibility of partnership losses, but the at risk provisions are not
expected to limit the Partners’ ability to deduct Fund losses.

In the case of a Partner who is an individual, expenses of producing income, including management fees,
are to be aggregated with unreimbursed employee business expenses and other expenses of producing
income and the aggregate amount of such expenses will be deductible only to the extent such amount
exceeds 2% of a taxpayer’s adjusted gross income. In addition, total allowable itemized deductions, other
than medical costs, casualty and theft losses and investment interest expense, are reduced by a
percentage of the taxpayer’s adjusted gross income in excess of a threshold amount.

Expenses subject to the limitations in the preceding paragraph do not include expenses incurred in
connection with a trade or business. The issue of whether the Fund will be engaged in a trade or business
for federal income tax purposes is unclear. The General Partner believes that the Fund will not be engaged
in a trade or business. Assuming the Fund is not engaged in a trade or business, an individual Partner’s
share of certain expenses of the Fund will be subject to the two limitations described in the preceding
paragraph.

Section 469 of the Code limits the deductibility of losses from passive activities. These provisions apply to
individuals, estates, trusts, personal service corporations and closely held corporations. In general, a
taxpayer’s losses from passive activities may only be offset against income from passive activities and not
against income such as salary or investment income. Any amount of passive activity loss that is disallowed
will be carried over to the following years to offset passive activity gains in such subsequent years. A
passive activity is any activity that involves the conduct of any trade or business and in which the taxpayer
does not materially participate. Although, as noted above, there is uncertainty whether the activities of the
Fund will constitute a trade or business as that concept has been interpreted by the IRS and the courts, the
General Partner believes that the Fund’s activities will not be considered a trade or business activity to
which the passive activity loss provisions of the Code would apply.

Capital Gain, Dividend And Qualified Small Business Stock Tax Rates. The Fund expects that its
gains and losses from its securities transactions typically will be capital gains and capital losses. Property
held for more than one year generally will be eligible for long-term capital gain or loss treatment.

Under current federal income tax law, the maximum federal ordinary income tax rate for individuals is
39.6% and, in general, the maximum individual income tax rate for long-term capital gains and dividend
income is 20%, although in all cases the effective rates may be higher due to the phase out of certain tax
deductions, exemptions and credits. The excess of capital losses over capital gains may be offset against
the ordinary income of an individual taxpayer, subject to an annual deduction limitation of $3,000; unused

29

capital losses may be carried forward indefinitely but may not be carried back. For corporate taxpayers, the
maximum federal income tax rate is 35%. Capital losses of a corporate taxpayer 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. A 3.8% Medicare tax is generally imposed on the net investment income of
high-income individuals, estates and trusts. Fund capital gain and other income will generally be subject to
the 3.8% Medicare tax.

In general, non-corporate investors that, directly or via a pass-through entity such as the Fund, hold
"qualified small business stock” (“QSBS”) for more than 5 years are permitted to exclude from taxable
income 50% of any gain subsequently recognized upon a sale or exchange of such stock. For each
non-corporate investor, the amount of gain eligible for the QSBS exclusion generally is limited to the greater
of: (i) 10 times the investor’s basis in the stock or (ii) a total of $10 million with regard to stock in the issuing
corporation. The remaining portion of the gain on such stock, if any, is subject to tax at a maximum capital
gains rate of 28%. For federal alternative minimum tax purposes, 7% of the QSBS exclusion is treated as a
preference item. The QSBS exclusion is 100% instead of 50% for both regular income tax and alternative
minimum tax purposes for QSBS acquired after September 27, 2012 and before January 1, 2014.

To be treated as small business stock eligible for the QSBS exclusion, stock must have been acquired at
original issue from a qualified small business corporation after August 10, 1993. In general, a qualified
small business corporation is a domestic “C” corporation that, immediately after issuing the stock in
question, has $50 million or less in gross assets and satisfies certain other requirements. Because several
of these requirements must continue to be satisfied after the issuance of qualified stock, it is possible that
the stock may cease to qualify as small business stock due to events occurring after the issue date.

Accordingly, there can be no assurance that any stock acquired directly or indirectly by the Fund would
qualify for the QSBS exclusion, even if such stock qualifies as small business stock at the time of
acquisition. In addition, no assurances can be given that the General Partner will have or provide to
Partners information about any particular stock investment necessary to determine its status as QSBS, or to
satisfy applicable tax reporting requirements related to QSBS treatment.

Rollover For Qualified Small Business Stock. Under Section 1045 of the Code, if an individual (i)
realizes gain on a sale of QSBS that has been held by the individual for more than six months, and (ii) within
60 days after such sale, purchases new QSBS, the individual generally is required to recognize (and pay
tax on) such gain only to the extent that the net proceeds from the original stock exceed the cost of the
newly purchased stock. Any remaining gain is carried over to the newly purchased stock and may be
recognized (and be taxable) upon a subsequent disposition of such stock. The benefits of Section 1045 are
generally available to individuals who purchase, hold and sell qualified small business stock indirectly
through a pass-through entity such as the Fund, although the extent to which a qualifying rollover may be
made through a pass-through entity is limited. No assurances can be given that the General Partner will
have or provide to Partners information about any particular stock investment necessary to determine its
eligibility for a Section 1045 rollover, or to satisfy applicable tax reporting requirements related to a rollover.

Foreign Partners. The federal income tax treatment of Partners who are non-resident aliens of the United
States will vary depending on whether the Fund is treated as being engaged in a trade or business in the
United States. If the Fund is treated as not engaged in a United States trade or business, Partners who are
non-resident aliens and foreign corporations will be subject to United States taxation only in limited
instances. If a foreign person is not engaged in a United States trade or business, it is generally subject to
a flat tax of 30% of the gross amount received in the form of United States source investment income. This
would include dividends, royalties, certain interest and other similar income (but not capital gains, except as
noted below) that is not related to the active conduct of a trade or business. The 30% tax is collected by
imposing a withholding obligation on the Fund. The withholding tax is reduced or eliminated in some
circumstances for residents of countries with which the United States has income tax treaties. A
nonresident alien, but not a foreign corporation, is generally subject to a 30% tax on his or her United States
source capital gains where such person is physically present in the United States for 183 days or more

30

during the taxable year, although an alien who is present for such a period will generally be a United States
tax resident and therefore subject to United States taxation on his worldwide income. A nonresident alien
who is present in the United States for 183 days or more is required to file a United States tax return and pay
a tax of 30% on his or her net capital gains. Dispositions of United States real property interests are
generally subject to U.S. tax under a special provision and do not fall within the general capital gains rule.

Interest from certain investments is exempt from the 30% withholding tax. For example, the portfolio
interest exception represents a broad class of interest income, which is exempt from withholding tax. In
order to constitute portfolio interest, a debt obligation held by the Fund on which the interest is paid must
generally be issued in registered form and the foreign partner must have provided the withholding agent
with a properly completed IRS Form W-8 BEN. In order to constitute a registered obligation, the debt must
be payable only to the named owner and any transfer of the obligation must be registered on the books of
the issuer or the old note must be surrendered for cancellation and a new note issued in the name of the
transferee.

The portfolio interest exemption does not apply to interest received by a shareholder who owns 10% or
more of the total combined voting power of the paying corporation. In the case of a partnership lender, this
10% ownership test is applied at the partner level and so is not likely to prevent portfolio interest earned by
the Fund from qualifying for the portfolio interest exemption.

On the other hand, if the Fund were engaged in a trade or business (either directly or indirectly through an
investment in a flow-through entity such as a partnership or limited liability company) at any time during the
taxable year, each foreign Partner of the Fund would be treated as being engaged in a United States trade
or business and would be subject to United States income taxation (at the same net progressive rates
applicable to United States citizens, residents and domestic corporations) on income that is effectively
connected with the conduct of that trade or business. If the Fund were engaged in a United States trade or
business, a withholding tax would be imposed on its effectively connected income allocable to foreign
Partners.

The foregoing discussion relates only to recognized income. The unrealized appreciation in stock or other
securities distributed in-kind by the Fund is generally not taxable until such stocks or securities are
ultimately sold. The sale of stock by a nonresident alien will generally not be taxed by the United States so
long as the sale is not made through an office or fixed place of business maintained by the alien in the
United States.

Each potential investor that is a non-resident alien of the United States is urged to consult with and
must rely upon the advice of its own professional tax advisors with respect to the United States and
foreign tax treatment of an investment in the Fund.

Reporting. The General Partner will furnish each Partner with an annual statement setting forth
information relating to the operations of the Fund (including information regarding such Partner’s
distributive share of Fund income and gains, losses, deductions and credits for the taxable year) as is
reasonably required to enable the Partner to properly report to the IRS with respect to such Partner’s
participation in the Fund.

The federal information tax returns filed by the Fund will be subject to audit by the IRS and the audit of the
Fund’s returns could result in an audit of the Partners’ own federal income tax returns. In connection with
such audits, adjustments to Fund items could result in the assertion of tax deficiencies (as well as interest
and penalties thereon) against the Partners. Any administrative or judicial proceedings involving the federal
income tax treatment of Fund items will generally be conducted on a unified basis, with binding effect on all
Partners. The General Partner will serve as the Fund’s “Tax Matters Partner” for purposes of coordinating
any such proceedings and providing any required notices about such proceedings to the Partners.

Treasury regulations impose special reporting rules for “reportable transactions.” A reportable transaction

31

includes, among other things, a transaction in which an advisor limits the disclosure of the tax treatment or
tax structure of the transaction and receives a fee in excess of certain thresholds. The General Partner
intends to take the position that an investment in the Fund does not constitute a reportable transaction. If it
were determined that an investment in the Fund does constitute a reportable transaction, each Partner
would be required to complete and file IRS Form 8886 with such Partner’s tax return for the tax year that
includes the date that such Partner acquired an interest in the Fund. The General Partner reserves the right
to disclose certain information about the Partners and the Fund to the IRS on Form 8886, including the
Partners’ capital commitments, tax identification numbers (if any) and dates of admission to the Fund, to
facilitate compliance with the reportable transaction rules if necessary. In addition, the Fund may engage in
certain transactions which themselves constitute reportable transactions and with respect to which both the
Fund and certain Partners may be required to file Form 8886. A significant penalty is imposed on taxpayers
who participate in a “reportable transaction” and fail to make the required disclosure. Certain states have
similar reporting requirements and may impose penalties for failure to report. Partners should consult their
tax advisors for advice concerning compliance with the reportable transaction regulations.

The Code provides for optional, and in certain cases mandatory, adjustments to the basis of partnership
property upon distributions of partnership property to a partner and transfers of partnership interests
(including by reason of death). The General Partner may elect to adjust the basis of Fund property in its
sole discretion. In addition, the General Partner will be entitled to require that each Partner provide it with
any information necessary to allow the Fund to comply with its obligations under the rules relating to tax
basis adjustments and disallowance of certain losses under Sections 734 or 743 of the Code. Partners
permitted to transfer interests in the Fund will also be required to provide certain information regarding the
transfer to the General Partner and any transferee.

FATCA. Pursuant to Code Sections 1471-1474 (“FATCA”), the Fund will be required to deduct a 30%
withholding tax from payments of certain U.S. source income, including capital gains, made to its foreign
Limited Partners unless the foreign Limited Partners are individuals or establish an exemption from this new
withholding tax. The FATCA withholding tax cannot be reduced under a tax treaty. Each Partner will be
required to provide the Fund any and all information required for the Fund to meet its obligations under
FATCA. The exact requirements of the FATCA regulations are not clear at this time as the regulations have
been issued only in proposed form and substantial additional guidance is expected. The purpose of FATCA
is to insure that foreign entities receiving payments from U.S. sources disclose all of their direct or indirect
U.S. owners. The FATCA withholding tax should not apply before 2014.

General. The foregoing discussion is for general information purposes and intended only as a general
summary of some of the principal federal income tax aspects of participation in the Fund. The tax rules
applicable with respect to the treatment of the Partners, the Fund and the transactions that the Fund may
engage in are highly complex, and their effect, in certain instances, may not be free from doubt. It also must
be emphasized that the tax rules presently applicable with respect to the transactions described in this
offering are subject to change at any time, and any such changes may or may not be made with retroactive
effect.

Circular 230 Disclaimer. This summary was not intended or written to be used, and it cannot be
used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.
This summary was written to support the promotion or marketing of interests in the Fund. Each
prospective investor should seek advice based on the taxpayer’s particular circumstances from an
independent tax advisor.

B. CERTAIN SECURITIES LAW AND ANTI-MONEY LAUNDERING CONSIDERATIONS

32

Investment Company Act. The Fund will not be subject to the provisions of the Investment Company Act
in reliance upon either Section 3(c)(1)1 or Section 3(c)(7)2 of the Investment Company Act. The Fund’s
Subscription Agreement and Partnership Agreement will contain representations and restrictions on
transfer designed to ensure that the conditions of one or both of these provisions will be met.

In addition, the General Partner will be entitled to form separate, side-by-side partnerships and
co-investment entities that would avoid the application of the Investment Company Act based on application
of either Section 3(c)(1) of the Investment Company Act (if the Fund is relying on Section 3(c)(7) of the
Investment Company Act) or Section 3(c)(7) of the Investment Company Act (if the Fund is relying on
Section 3(c)(1) of the Investment Company Act).

Investment Advisers Act of 1940. In accordance with the provisions of the Dodd-Frank Wall Street
Reform and Consumer Protection Act which was signed into law in the United States on July 21, 2010 (the
“Reform Act”), both the General Partner and the Management Company are exempt from registration as
an investment adviser under the United States Investment Advisers Act of 1940, as amended (the
“Advisers Act”). Consequently, Fund investors will not be afforded the protections of the Advisers Act
applicable to investment advisers registered under the Advisers Act.

Securities Act Of 1933. The Interests described herein are not being registered under the Securities Act,
in reliance upon exemptions for transactions not involving a public offering. Each investor will be required to
execute certain agreements in connection with its subscription for the Interest, and in so doing will make
certain representations to the General Partner, including: (i) that it is an “accredited investor” as defined in
Regulation D under the Securities Act; (ii) that it is acquiring the Interest for its own account, for investment
purposes only, and not with a view to its distribution; (iii) that it has received or had access to all information
it deems relevant to evaluate the merits and risks of the prospective investment and that it has reviewed and
understood all such information; (iv) that it has the ability to bear the economic risk of an investment in the
Fund for an indefinite period of time; and (v) that it has such knowledge and experience of financial and
business matters that it is capable of evaluating the merits of an investment in the Fund.

Prior to sale, offerees and their advisors are invited to ask questions and obtain additional information from
the General Partner concerning the Interests described herein, the terms and conditions of the offering, and
any other relevant matters (including, but not limited to, additional information to verify the accuracy of the
information set forth herein).

The Interests described herein will constitute “restricted securities” under the Securities Act and as such will
be subject to certain restrictions on transferability. The Interests may not be transferred or sold unless the
Interests have been registered under the Securities Act or an exemption from registration is available. It is
not contemplated that registration under the Securities Act or other securities laws will ever be affected.
The Interests are subject to further restrictions on transfer as described in the Partnership Agreement.

Anti-Money Laundering Regulations. All subscriptions for the Interests described herein are subject to
applicable anti-money laundering regulations. Investors will be required to comply with such anti-money
laundering procedures as are required by the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001 (Pub. L. No. 107-56).

1 Section 3(c)(1) excludes from the definition of “investment company” any issuer whose outstanding securities are
beneficially owned by not more than one hundred (100) persons (as defined in this § 3(c)(1)), after giving effect to
certain attribution rules, and that does not engage in a public offering of securities.

2 Section 3(c)(7) excludes from the definition of “investment company” any issuer whose outstanding securities are
beneficially owned only by “qualified purchasers” or “knowledgeable employees” and that does not engage in a public
offering of securities. A “qualified purchaser” includes a natural person who owns not less than $5,000,000 in
investments, or a natural person or company, acting for its own account or the accounts of other qualified purchasers,
who owns and invests on a discretionary basis not less than $25,000,000 in investments and certain trusts.

33

In order to comply with any applicable regulations aimed at the prevention of money laundering, the Fund
may require verification of identity from all prospective investors. The General Partner may decline to
accept a subscription if this information is not provided or on the basis of such information that is provided.
The Fund may seek to: verify the identity of a prospective investor; ensure that the prospective investor is
not named on one of the prohibited lists maintained by the United States Treasury Department; verify the
source of a prospective investor’s funds; once a prospective investor becomes a Partner, monitor
communications, capital contributions and withdrawals, and other payments involving the Partner; and
report suspicious activity to appropriate authorities. The Fund may be required to exercise special scrutiny
when prospective investors employ certain-kinds of financial institutions or financial institutions from certain
countries or when prospective investors are senior governmental or military officials or senior executives of
government-owned businesses. United States anti-money laundering regulations are developing and
changing continually and the Fund may be required to implement other anti-money laundering measures
from time to time. Prospective investors should be aware that in order to comply with any applicable
anti-money laundering regulations, whether in the United States or any other applicable jurisdiction, certain
information regarding prospective investors and partners may be required to be transmitted to, or held in,
the United States or disclosed to certain regulatory authorities in any applicable jurisdiction. Depending on
the circumstances of each subscription, it may not be necessary to obtain full documentary evidence of
identity.

The Fund reserves the right to request such information as is necessary to verify the identity of a
prospective investor. The Fund also reserves the right to request such identification evidence in respect of
a transferee of the Interests. In the event of delay or failure by the prospective investor or transferee to
produce any information required for verification purposes, the Fund may refuse to accept the application or
(as the case may be) to give effect to the relevant transfer and (in the case of a subscription for the
Interests) any funds received will be returned without interest to the account from which the monies were
originally debited.

The Fund also reserves the right to refuse to make any distribution to a Partner, if the General Partner
suspects or is advised that the payment of any distribution proceeds to such Partner might result in a breach
or violation of any applicable anti-money laundering or other laws or regulations by any person in any
relevant jurisdiction, or such refusal is considered necessary or appropriate to ensure the compliance by the
Fund, the General Partner or their respective affiliates with any such laws or regulations in any relevant
jurisdiction.

34

Additional Information

Prior to the consummation of the offering, the General Partner will provide to each prospective investor and
such investor’s representatives and advisors, if any, the opportunity to ask questions and receive answers
concerning the terms and conditions of the offering and to obtain any additional information which the
General Partner may possess or can obtain without unreasonable effort and expense that is necessary to
verify the accuracy of the information furnished to such prospective investor. Prospective investors may
also be asked to sign a Non-Disclosure Agreement as a condition to viewing certain confidential or trade
secret information.
This Memorandum is intended to present a general outline of the policies and structure of the Fund and the
General Partner. The Partnership Agreement, which specifies the rights and obligations of the Partners,
should be reviewed thoroughly by each prospective investor. The “Summary of Principal Terms” of the
terms and conditions of the Fund contained herein is necessarily incomplete and is qualified in its entirety
by reference to the Partnership Agreement and the Subscription Agreement relating to the purchase of the
Interests therein. In the event any description of the Fund’s terms and conditions set forth in this
Memorandum conflict with the provisions of Partnership Agreement or the Subscription Agreement, the
terms and conditions set forth in such Partnership Agreement and the Subscription Agreement shall control.
Any questions regarding this offering, and any requests for copies of the Non-Disclosure Agreement,
Memorandum, the Partnership Agreement and the Subscription Agreement, should be forwarded to:

Colorado High Yield Venture Fund I, LP
Attention: Chris Boyd
331 1/2 Main Street
Longmont, CO 80501

[email protected]
(720) 684-6184

35

APPENDIX A

Notices to Investors

NOTICE TO CALIFORNIA RESIDENTS ONLY: THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS OFFERING HAS NOT BEEN FILED WITH COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA. THE SALE OF SECURITIES IS
EXEMPTED FROM QUALIFICATION BY SECTION 25100, 25102, OR 25104 OF THE
CALIFORNIA CORPORATIONS CODE.

FOR RESIDENTS OF FLORIDA ONLY

THE SECURITIES REFERRED TO HEREIN WILL BE SOLD TO, AND ACQUIRED BY, THE
PURCHASER IN A TRANSACTION EXEMPT UNDER SECTION 517.061 OF THE FLORIDA
SECURITIES AND INVESTOR PROTECTION ACT. THE SECURITIES HAVE NOT BEEN
REGISTERED UNDER SAID ACT IN THE STATE OF FLORIDA. IN ADDITION, WHEN SALES
ARE MADE TO FIVE OF MORE FLORIDA RESIDENTS, ALL PURCHASERS WHO ARE
FLORIDA RESIDENTS (OTHER THAN AN INSTITUTIONAL INVESTOR DESCRIBED IN
SECTION 517.061(7), FLA. STAT.) SHALL HAVE THE PRIVILEGE OF VOIDING THE
PURCHASE WITHIN THREE DAYS AFTER (A) THE FIRST TENDER OF CONSIDERATION IS
MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER, OR AN
ESCROW AGENT, OR (B) THE AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO
THE PURCHASER, WHICHEVER LATER OCCURS.

FOR RESIDENTS OF GEORGIA ONLY

THESE INTERESTS HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF
CODE SECTION 10-5-9 OF THE “GEORGIA SECURITIES ACT OF 1973,” AND MAY NOT BE
SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH
ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.

NOTICE TO ILLINOIS RESIDENTS ONLY

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECRETARY
OF THE STATE OF ILLINOIS NOR HAS THE STATE OF ILLINOIS PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
SECTION 5 OF THE ILLINOIS SECURITIES ACT OF 1953. THE SECURITIES MAY NOT BE
RESOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY,
UNLESS SUBSEQUENTLY REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION
FROM REGISTRATION THEREFROM IS AVAILABLE.

NOTICE TO NEVADA RESIDENTS ONLY

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE NEVADA 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 SUBSEQUENTLY
REGISTERED OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

THE DIRECTOR OF THE SECURITIES DIVISION OF THE STATE OF NEVADA DOES NOT
RECOMMEND OR ENDORSE THE PURCHASE OF THESE SECURITIES. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL, IN MAKING INVESTMENT
DECISIONS 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 SECURITIES HAVE NOT BEEN RECOMMENDED BY
ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.

FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER 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 MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THE INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.

FOR RESIDENTS OF NEW HAMPSHIRE ONLY

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF
NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY
DOCUMENT FILED UNDER SECTION 421-B OF THE NEW HAMPSHIRE REVISED STATUTES
ANNOTATED, 1955, AS AMENDED, IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER
ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR
A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED
IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN
APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE,
OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT
ANY REPRESENTATION INCONSISTENT WITH THE FOREGOING PROVISIONS.

NOTICE TO OREGON RESIDENTS ONLY

THESE SECURITIES OFFERED HAVE NOT BEEN REGISTERED WITH THE DIRECTOR OF
THE DIVISION OF FINANCIAL REGULATION FOR THE STATE OF OREGON UNDER
PROVISIONS OF O.A.R. 441-65-060 THROUGH 441-65-240. THE INVESTOR IS ADVISED
THAT THE DIRECTOR HAS NOT REVIEWED THIS DOCUMENT. THE INVESTOR MUST RELY
ON THE INVESTOR’S OWN EXAMINATION OF THE COMPANY CREATING THE SECURITIES
AND THE TERMS OF THE OFFERING INCLUDING THE MERITS AND RISKS INVOLVED IN
MAKING AN INVESTMENT DECISION ON THESE SECURITIES. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER 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.

FOR RESIDENTS OF PENNSYLVANIA ONLY

OFFERS TO PURCHASE THE SECURITIES ISSUED HEREUNDER THAT ARE MADE TO
PENNSYLVANIA RESIDENTS WILL BE MADE ONLY TO PENNSYLVANIA RESIDENTS WHO
ARE ACCREDITED INVESTORS AS DEFINED IN REGULATION D UNDER THE SECURITIES
ACT OF 1933.

EACH PENNSYLVANIA RESIDENT WHO PURCHASES ANY OF THE SECURITIES ISSUED
HEREUNDER HEREBY AGREES NOT TO SELL THE SECURITIES PURCHASED FOR A
PERIOD OF TWELVE MONTHS FROM THE DATE OF PURCHASE UNLESS THE
PURCHASER’S SECURITIES ARE SUBSEQUENTLY REGISTERED UNDER THE
PENNSYLVANIA SECURITIES ACT OF 1972 OR UNDER THE SECURITIES ACT OF 1933, OR
OTHERWISE IN ACCORDANCE WITH REGULATION 204.011 OF THE PENNSYLVANIA CODE.

PURSUANT TO SECTION 207(M) OF THE PENNSYLVANIA SECURITIES ACT OF 1972, EACH
PERSON WHO ACCEPTS AN OFFER TO PURCHASE SECURITIES EXEMPTED FROM
REGISTRATION BY SECTION 203(D) OF THE PENNSYLVANIA SECURITIES ACT OF 1972
DIRECTLY FROM AN ISSUER OR AN AFFILIATE OF AN ISSUER SHALL HAVE THE RIGHT TO
WITHDRAW HIS OR HER ACCEPTANCE, WITHOUT INCURRING ANY LIABILITY TO THE
SELLER, UNDERWRITER (IF ANY) OR ANY OTHER PERSON, WITHIN TWO BUSINESS DAYS
FROM THE DATE OF RECEIPT BY THE ISSUER OF HIS OR HER WRITTEN BINDING
CONTRACT OF PURCHASE OR IN THE CASE OF A TRANSACTION IN WHICH THERE IS NO
WRITTEN BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER HE
OR SHE MAKES THE INITIAL PAYMENT FOR THE SECURITIES BEING OFFERED.

NOTICE TO TEXAS RESIDENTS ONLY

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE TEXAS
SECURITIES ACT, AS AMENDED, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT. THE SECURITIES
ARE SUBJECT TO RESTRICTION ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. THE SECURITIES HAVE NOT BEEN
APPROVED NOR DISAPPROVED BY THE SECURITIES COMMISSION, ANY STATE
SECURITIES COMMISSION NOR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF
THE FOREGOING AUTHORITIES PASSED UPON NOR ENDORSED THE MERITS OF THIS
OFFERING NOR THE ACCURACY NOR ADEQUACY OF THE MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

NOTICE TO WASHINGTON RESIDENTS ONLY

THE ADMINISTRATOR OF SECURITIES HAS NOT REVIEWED THE OFFERING OR PRIVATE
PLACEMENT MEMORANDUM AND THE SECURITIES HAVE NOT BEEN REGISTERED IN
RELIANCE UPON THE SECURITIES ACT OF WASHINGTON, CHAPTER 21.20 RCW, AND
THEREFORE, CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER THE
SECURITIES ACT OF WASHINGTON, CHAPTER 21.20 RCW, OR UNLESS AN EXEMPTION
FROM REGISTRATION IS MADE AVAILABLE.

FOR INVESTORS IN OTHER STATES

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY
ANY U.S. FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
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 MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF
THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

NON-U.S. INVESTORS GENERALLY

IT IS THE RESPONSIBILITY OF ANY PERSONS WISHING TO SUBSCRIBE FOR THE
SECURITIES DESCRIBED IN THIS MEMORANDUM TO INFORM THEMSELVES OF AND TO
OBSERVE ALL APPLICABLE LAWS AND REGULATIONS OF ANY RELEVANT
JURISDICTIONS. PROSPECTIVE INVESTORS SHOULD INFORM THEMSELVES AS TO THE
LEGAL REQUIREMENTS AND TAX CONSEQUENCES WITHIN THE COUNTRIES OF THEIR
CITIZENSHIP, RESIDENCE, DOMICILE AND PLACE OF BUSINESS WITH RESPECT TO THE
ACQUISITION, HOLDING OR DISPOSAL OF THESE SECURITIES, AND ANY NON-U.S.
EXCHANGE RESTRICTIONS THAT MAY BE RELEVANT THERETO.

Subscr
Agree

ription
ement

COLORADO HIGH YIELD FUND, LP

SUBSCRIPTION AGREEMENT AND
INVESTOR QUESTIONNAIRE

COLORADO HIGH YIELD FUND, LP

SUBSCRIPTION INSTRUCTIONS

A subscription to invest in Colorado High Yield Fund, LP (the “Fund”) may be made only by means of
the completion, delivery and acceptance of the subscription documents in this package as follows:

Completion of the following documents:

 Subscription Agreement and Investor Questionnaire: Complete all requested information in this
Subscription Agreement and Investor Questionnaire and date and sign the signature page.

 IRS Form W-9 or Form W-8: Complete and sign IRS Form W-9 or the applicable Form W-8 to
certify your tax identification number or status attached as EXHIBIT C and EXHIBIT D,
respectively.

 Limited Partnership Agreement: Execute two (2) copies of the signature page to the Limited
Partnership Agreement of the Fund (the “Partnership Agreement”) attached as EXHIBIT A.

If you will be investing through multiple entities, please make additional copies of these documents as
necessary, ensuring that all documents are completed for each entity investing in the Fund.

DELIVERY INSTRUCTIONS. Subscription documents should be delivered to the following address via
facsimile (or by email as a PDF file) and overnight delivery:

Colorado High Yield Fund, LP
Attention: Chris Boyd
331 1/2 Main Street
Longmont, CO 80501

[email protected]
(720) 684-6184

ADDITIONAL REQUIRED DOCUMENTS. Colorado High Yield Fund, LLC (the “General Partner”)
reserves the right to request any additional documentation necessary to verify the identity of a prospective
limited partner in the Fund. Please be aware that your failure to provide such documentation may delay
your acceptance by the General Partner or cause your subscription request to be rejected entirely. The
Fund shall be held harmless by any such prospective limited partner against any loss arising as a result of
a failure to provide any requested documentation.

ADDITIONAL INFORMATION. For additional information concerning subscriptions, prospective investors
should contact Chris Boyd shown above.

Prospective Investor:

Contact Person:
Email:
Telephone No:
Fax No:
State/Country of Domicile:
Tax Identification Number:
Subscription Amount (USD): $

COLORADO HIGH YIELD FUND, LP

SUBSCRIPTION AGREEMENT AND
INVESTOR QUESTIONNAIRE

THE OFFERING OF SECURITIES DESCRIBED HEREIN HAS NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR UNDER ANY SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER JURISDICTION. THIS OFFERING IS MADE PURSUANT TO RULE 506 OF
REGULATION D UNDER SECTION 4(2) OF THE SECURITIES ACT, WHICH EXEMPTS FROM
SUCH REGISTRATION TRANSACTIONS NOT INVOLVING A PUBLIC OFFERING. FOR THIS
REASON, THESE SECURITIES WILL BE SOLD ONLY TO INVESTORS WHO MEET CERTAIN
MINIMUM SUITABILITY QUALIFICATIONS DESCRIBED HEREIN.

A SUBSCRIBER SHOULD BE PREPARED TO BEAR THE ECONOMIC RISK OF AN
INVESTMENT IN THE FUND FOR AN INDEFINITE PERIOD OF TIME BECAUSE THE LIMITED
PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
THE LAWS OF ANY OTHER JURISDICTION, AND, THEREFORE, CANNOT BE SOLD UNLESS
THEY ARE SUBSEQUENTLY REGISTERED OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THERE IS NO OBLIGATION OF THE ISSUER TO REGISTER THE LIMITED
PARTNERSHIP INTERESTS UNDER THE SECURITIES ACT OR THE LAWS OF ANY OTHER
JURISDICTION. TRANSFER OF THE LIMITED PARTNERSHIP INTERESTS IS ALSO
RESTRICTED BY THE TERMS OF THE LIMITED PARTNERSHIP AGREEMENT RELATING
THERETO.

1

PART I – APPLICABLE TO ALL INVESTORS

Ladies and Gentlemen:

This SUBSCRIPTION AGREEMENT AND INVESTOR QUESTIONNAIRE (this “Agreement”) is
entered into by and among COLORADO HIGH YIELD FUND, LLC, a Delaware limited liability company
(the “General Partner”), COLORADO HIGH YIELD FUND, LP, a Delaware limited partnership (the
“Fund”), and the investor identified on SCHEDULE A hereto (the “Investor”) in connection with the
Investor’s purchase of a limited partnership interest in the Fund (the “Interest”), and admission as a
Limited Partner therein pursuant to the Limited Partnership Agreement of the Fund (the “Partnership
Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings given to
them in the Partnership Agreement.

The Investor hereby subscribes for an Interest, and the General Partner, the Fund and the Investor
hereby agree as follows:

1. Contribution. The Investor agrees to contribute, in installments, an aggregate amount as set
forth on the signature page hereto (the Investor’s “Capital Commitment”) to the Fund pursuant to
the terms of, and at the times required by, the Partnership Agreement. (All references herein are
to United States Dollars.) All payments of the Investor’s Capital Commitment shall be made by
check made payable to “Colorado High Yield Fund, LP” or by wire transfer pursuant to
instructions provided by the General Partner prior to the due date of such payments.

2. Adoption. If the Investor is accepted as a Limited Partner pursuant to paragraph 3 below, the
Investor hereby agrees to be bound by all the terms and provisions of the Partnership Agreement
and to perform all obligations therein imposed upon a Limited Partner with respect to the Interest.

3. Acceptance of Subscription; Delivery of Partnership Agreement. The Investor understands
and agrees that this subscription is made subject to the following terms and conditions:

(a) The General Partner shall have the right to review the suitability of any person desiring to
purchase an Interest and, in connection with such review, to waive such suitability
standards as to such person as the General Partner deems appropriate under applicable
law;

(b) The General Partner shall have the right, in its sole and absolute discretion, to reject this
subscription, in whole or in part, and the subscription shall be deemed to be accepted by
the General Partner only when the Investor has been admitted to the Fund as a Limited
Partner;

(c) The General Partner shall have no obligation to accept subscriptions in the order
received;

(d) The Investor hereby requests and authorizes the General Partner to enter the Investor’s
name on Exhibit A to the Partnership Agreement as holder of the Interest;

2

(e) The Interest to be created on account of this subscription shall be created only in the
name of the Investor, and the Investor agrees to comply with the terms of the Partnership
Agreement and to execute any and all further documents necessary in connection with
becoming a Limited Partner of the Fund; and

(f) The Investor hereby undertakes in respect of the Interest that the Investor: (i) shall
comply with the restrictions on transfer of the Interest contained in the Partnership
Agreement; and (ii) understands that upon a default of the Investor’s capital contribution
obligations to the Fund, the Interest may, among other consequences, be subject to
forfeiture in accordance with the terms of the Partnership Agreement.

(g) The Investor hereby authorizes the General Partner to make additional modifications to
the terms of the Partnership Agreement prior to the admission of the Investor as a
Limited Partner at the initial closing of the Fund in connection with ongoing negotiations
with other investors, provided that the General Partner (a) determines, in good faith, that
such modifications are, when taken as a whole, favorable to the Limited Partners as a
class and (b) delivers to the undersigned prior to the initial closing a copy of the modified
text of the Partnership Agreement marked to highlight such revisions.

4. Fund’s Conditions to Closing. The Fund’s obligations hereunder are subject to acceptance by
the General Partner of the Investor’s subscription and to the fulfillment, prior to or at the time of
closing, of each of the following conditions:

(a) The representations and warranties of the Investor contained in this Agreement shall be
true and correct at the time of closing; and

(b) All proceedings in connection with the transactions contemplated hereby and all
documents and instruments incident to such transactions shall be satisfactory in substance
and form to the General Partner, the Fund and General Partner’s legal counsel (“Fund
Counsel”), and the General Partner, the Fund or Fund Counsel shall have received all
such counterpart originals or certified or other copies of such documents as the General
Partner may request.

5. Investor’s Representations. In connection with the Investor’s purchase of the Interest, the
Investor makes the following representations and warranties on which the General Partner, the
Fund and Fund Counsel are entitled to rely:

(a) The Investor has received, read and understands that certain Confidential Private
Placement Memorandum, as amended and supplemented from time to time (the
“Memorandum”), the Partnership Agreement and this Agreement. No representations or
warranties have been made to the Investor by the Fund, the General Partner or any agent
of said persons, other than as set forth in the Memorandum, the Partnership Agreement
and this Agreement.

(b) The Investor is acquiring the Interest solely for the Investor’s own account and not
directly or indirectly for the account of any other person whatsoever (or, if the Investor is
acquiring the Interest as a trustee, solely for the account of the trust or trust account
named herein) for investment and not with a view to, or for sale in connection with, any
distribution of the Interest. The Investor does not have any contract, undertaking or
arrangement with any person to sell, transfer or grant a participation to any person with
respect to the Interest.

3

(c) The Investor has such knowledge and experience in financial and business matters that
the Investor is capable of evaluating the merits and risks of the investment evidenced by
the Investor’s purchase of the Interest, and the Investor is able to bear the economic risk
of such investment including the risk of complete loss.

(d) The Investor has had access to such information concerning the Fund as the Investor
deems necessary to enable the Investor to make an informed decision concerning the
purchase of the Interest. The Investor has had access to the managing directors of the
General Partner and the opportunity to ask questions of, and receive answers satisfactory
to the Investor from, such managing directors concerning the offering of Interests in the
Fund and the Fund generally. The Investor has obtained all additional information
requested by the Investor to verify the accuracy of all information furnished in
connection with the offering of Interests in the Fund.

(e) The Investor understands that the Interest has not been registered under the United States
Securities Act of 1933, as amended (the “Securities Act”) or any securities law of any
state of the United States or any other jurisdiction, in each case in reliance on an
exemption for private offerings, and the Investor acknowledges that the Investor is
purchasing the Interest without being furnished any offering literature or prospectus other
than the Memorandum, the Partnership Agreement and this Agreement.

(f) The Investor is aware that (i) the Investor must bear the economic risk of investment in
the Interest for an indefinite period of time, possibly until final winding up of the Fund,
(ii) because the Interest has not been registered under the Securities Act, there is currently
no public market therefor, (iii) the Investor may not be able to avail itself of the
provisions of Rule 144 of the Securities Act with respect to the Interest, and (iv) the
Interest cannot be sold unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Investor understands that the Fund is
under no obligation, and does not intend, to effect any such registration at any time. The
Investor also understands that sales or transfers of the Interest are further restricted by the
provisions of the Partnership Agreement and, as applicable, securities laws of other
jurisdictions and the states of the United States.

(g) The Interest will not be transferred or disposed of except in accordance with the terms of
this Agreement and the Partnership Agreement and will not be sold or transferred without
registration under the Securities Act, or pursuant to an applicable exemption therefrom.

(h) The Investor’s full legal name, true and correct address of residence (for individuals) or
principal place of business (for entities), phone number, fax number, electronic mail
address, United States taxpayer identification number (each, if applicable) and other
contact information are provided on SCHEDULE A hereto.

(i) The execution and delivery of the Partnership Agreement and this Agreement, the
consummation of the transactions contemplated thereby and the performance of the
obligations thereunder will not conflict with or result in any violation of or default under
any provision of any other agreement or instrument to which the Investor is a party or any
license, permit, franchise, judgment, order, writ or decree, or any statute, rule or
regulation, applicable to the Investor.

(j) No suit, action, claim, investigation or other proceeding is pending or, to the best of the
Investor’s knowledge, is threatened against the Investor that questions the validity of the

4

Partnership Agreement or this Agreement or any action taken or to be taken pursuant to
the Partnership Agreement or this Agreement.

(k) The Investor has full power and authority to make the representations referred to in this
Agreement, to purchase the Interest pursuant to this Agreement and the Partnership
Agreement and to deliver the Partnership Agreement and this Agreement. The
Partnership Agreement and this Agreement create valid and binding obligations of the
Investor and are enforceable against the Investor in accordance with their terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws affecting creditors’ rights, and subject to
general equity principles and to limitations on availability of equitable relief, including
specific performance.

(l) The Investor acknowledges that the Investor understands the meaning and legal
consequences of the representations and warranties made by the Investor herein. Such
representations and warranties are complete and accurate, shall be complete and accurate
at the time of closing and may be relied upon by the Fund, the General Partner and Fund
Counsel. Said representations and warranties shall survive delivery of this Agreement
and the Partnership Agreement. If in any respect such information shall not be complete
and accurate prior to the time of closing, the Investor shall give immediate notice of such
incomplete or inaccurate information to the General Partner, specifying which
representations or warranties are not complete and accurate and the reasons therefor.

(m) The Investor hereby agrees to indemnify and hold harmless the Fund, Fund Counsel, the
General Partner and each member, managing director, manager, director, officer, advisor
or employee thereof (each, an “Indemnified Party”) from and against any and all loss,
damage or liability due to or arising out of any inaccuracy or breach of any representation
or warranty of the Investor or failure of the Investor to comply with any covenant or
agreement set forth herein or in any other document furnished to any Indemnified Party
specifically supplementing the information in this subscription booklet by the Investor in
connection with the subscription for an Interest. The Investor shall reimburse each
Indemnified Party for its legal and other expenses (including the cost of any investigation
and preparation) as they are incurred in connection with any such claim, action,
proceeding or investigation. The reimbursement and indemnification obligations of the
Investor under this paragraph shall survive any closing applicable to the Investor (or, if
this Agreement is terminated pursuant to paragraph 3(b) above, such termination) and
shall be in addition to any liability which the Investor may otherwise have (including,
without limitation, liabilities under the Partnership Agreement), and shall be binding and
inure to the benefit of any successors, assigns, heirs, estates, executors, administrators
and personal representatives of the Indemnified Parties.

(n) The Investor confirms that the Investor has been advised to consult with the Investor’s
attorney regarding legal matters concerning the Fund and to consult with independent tax
advisers regarding the tax consequences of investing in the Fund. The Investor
acknowledges that he, she or it understands that any anticipated United States federal or
state income tax benefits may not be available and, further, may be adversely affected
through adoption of new laws or regulations or amendments to existing laws or
regulations. The Investor acknowledges and agrees that the Fund is providing no
warranty or assurance regarding the ultimate availability of any tax benefits to the
Investor by reason of the Investor’s investment in the Fund.

5

(o) The Investor understands that information relating to the Investor shall appear on the
financial statements and other records of the Fund. The Investor acknowledges and
agrees that other Partners may receive such information as permitted by the Partnership
Agreement or as required by applicable laws and may share such information with their
advisors and other parties.

(p) The Investor understands and agrees that the General Partner may cause the Fund to
make an election under Section 754 of the Code or an election to be treated as an
“electing investment partnership” for purposes of Section 743 of the Code. If the Fund
elects to be treated as an electing investment partnership, the Investor shall cooperate
with the Fund and the General Partner to maintain that status and shall not take any action
that would be inconsistent with such election. Upon request, the Investor shall provide
the General Partner with any information necessary to allow the Fund to comply with (a)
its obligations to make tax basis adjustments under Sections 734 or 743 of the Code and
(b) its obligations as an electing investment partnership.

(q) The Investor has carefully reviewed and understands the various risks of an investment in
the Fund, as well as the fees and conflicts of interest to which the Fund is subject, as set
forth in the Memorandum and the Partnership Agreement. The Investor hereby consents
and agrees to the payment of the fees so described to the parties identified as the
recipients thereof, and to such conflicts of interest.

6. Anti-Money Laundering Regulations. The Investor hereby acknowledges that the General
Partner and the Fund’s intent is to comply with all applicable federal, state and local laws
designed to combat money laundering and similar illegal activities, including the provisions of
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (“PATRIOT Act”). In furtherance of such efforts, Investor
hereby represents, covenants, and agrees that, to the best of Investors’ knowledge based on
reasonable investigation:

(a) None of Investor’s capital contributions to the Fund (whether payable in cash or
otherwise) shall be derived from money laundering or similar activities deemed illegal
under federal laws and regulations.

(b) To the extent within Investor’s control, none of Investor’s capital contributions to the
Fund will cause the Fund or any of its personnel to be in violation of federal anti-money
laundering laws, including without limitation the Bank Secrecy Act (31 U.S.C. 5311 et
seq.), the United States Money Laundering Control Act of 1986 or the International
Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, and any
regulations promulgated thereunder.

(c) When requested by the General Partner, the Investor will provide any and all additional
information, and the Investor understands and agrees that the General Partner may release
confidential information about the Investor and, if applicable, any underlying beneficial
owner or Related Person to any person, deemed reasonably necessary to ensure
compliance with all applicable laws and regulations concerning money laundering and
similar activities.

(d) Except as otherwise disclosed in writing to the General Partner, the Investor represents
and warrants neither it, nor any person or entity controlled by, controlling or under
common control with Investor, any of Investor’s beneficial owners, any person for whom

6

the Investor is acting as agent or nominee in connection with this investment, nor in the
case of an Investor which is an entity, any Related Person1 is:

(i) a Prohibited Investor;2

(ii) a Senior Foreign Political Figure,3 any member of a Senior Foreign Political
Figure’s “immediate family,” which includes the figure’s parents, siblings,
spouse, children and in-laws, or any Close Associate4 of a Senior Foreign
Political Figure, or a person or entity resident in, or organized or chartered under,
the laws of a Non-Cooperative Jurisdiction;5

(iii) a person or entity resident in, or organized or chartered under, the laws of a
jurisdiction that has been designated by the U.S. Secretary of the Treasury under
Section 311 or 312 of the PATRIOT Act as warranting special measures due to
money laundering concerns; or

(iv) a person or entity who gives Investor reason to believe that its funds originate
from, or will be or have been routed through, an account maintained at a Foreign
Shell Bank,6 an “offshore bank,” or a bank organized or chartered under the laws
of a Non-Cooperative Jurisdiction.

1 With respect to any entity, any interest holder, director, senior officer, trustee, beneficiary or grantor of such entity; provided
that in the case of an entity that is a publicly traded company or a tax qualified pension or retirement plan in which at least 100
employees participate that is maintained by an employer that is organized in the U.S. or is a U.S. government entity (a “Qualified
Plan”), the term “Related Person” shall exclude any interest holder holding less than 5% of any class of securities of such
publicly traded company and beneficiaries of such Qualified Plan.
2 For purposes of this subparagraph (d), “Prohibited Investor” shall mean a person or entity whose name appears on
(i) the List of Specially Designated Nationals and Blocked Persons maintained by the U.S. Office of Foreign Assets Control;
(ii) other lists of prohibited persons and entities as may be mandated by applicable law or regulation; or (iii) such other lists of
prohibited persons and entities as may be provided to the Fund in connection therewith.
3 For purposes of this subparagraph (d), “Senior Foreign Political Figure” shall mean a senior official in the executive,
legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a senior official of a
major foreign political party, or a senior executive of a foreign government-owned corporation. In addition, a Senior Foreign
Political Figure includes any corporation, business or other entity that has been formed by, or for the benefit of, a Senior Foreign
Political Figure.
4 For purposes of this subparagraph (d), “Close Associate of a Senior Foreign Political Figure” shall mean a person
who is widely and publicly known internationally to maintain an unusually close relationship with the Senior Foreign Political
Figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on
behalf of the Senior Foreign Political Figure.
5 For purposes of this subparagraph (d), “Non-Cooperative Jurisdiction” shall mean any foreign country that has been
designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group
or organization, such as the Financial Task Force on Money Laundering, of which the U.S. is a member and with which
designation the U.S. representative to the group or organization continues to concur.
6 For purposes of this subparagraph (d), “Foreign Shell Bank” shall mean a Foreign Bank without a Physical Presence
in any country, but does not include a Regulated Affiliate.

A “Foreign Bank” shall mean an organization that (i) is organized under the laws of a foreign country, (ii) engages in
the business of banking, (iii) is recognized as a bank by the bank supervisory or monetary authority of the country of its
organization or principal banking operations, (iv) receives deposits to a substantial extent in the regular course of its business,
and (v) has the power to accept demand deposits, but does not include the U.S. branches or agencies of a foreign bank.

“Physical Presence” shall mean a place of business that is maintained by a Foreign Bank and is located at a fixed
address, other than solely a post office box or an electronic address, in a country in which the Foreign Bank is authorized to
conduct banking activities, at which location the Foreign Bank (i) employs one or more individuals on a full-time basis, (ii)
maintains operating records related to its banking activities, and (iii) is subject to inspection by the banking authority that
licensed the Foreign Bank to conduct banking activities.

7

(e) If the Investor is purchasing the Interest as agent, representative, intermediary/nominee or
in any particular capacity for any other person, or is otherwise requested to do so by the
General Partner, it shall provide a copy of its anti-money laundering policies (“AML
Policies”) to the General Partner. The Investor represents that it is in compliance with its
AML Policies, its AML Policies have been approved by counsel or internal compliance
personnel reasonably informed of anti-money laundering policies and their
implementation and it has not received a deficiency letter, negative report or any similar
determination regarding its AML Policies from independent accountants, internal
auditors or some other person responsible for reviewing compliance with its AML
Policies.

(f) The Investor hereby agrees to immediately notify the General Partner if it knows, or has
reason to suspect that any of the representations in this paragraph 6 have become
incorrect or if there is any change in the information affecting these representations and
covenants.

(g) The Investor agrees that, if at any time it is discovered that any of the foregoing anti-
money laundering representations are incorrect, or if otherwise required by applicable
laws or regulations related to money laundering and similar activities, the General Partner
may undertake appropriate actions, and the Investor agrees to cooperate with such
actions, to ensure compliance with such laws or regulations, including, but not limited to
segregation and/or redemption of the Investor’s Interest in the Fund or freezing the
Investor’s account.

7. Withholding. The General Partner is required to withhold a certain portion of the taxable income
and gain allocated or distributed to each Investor unless the Investor provides documentation
confirming that such Investor is not subject to withholding, or is subject to a reduced rate of
withholding. The following information is provided to assist the Investor in complying with the
U.S. rules for backup withholding and withholding with respect to income earned by foreign
persons. This information is only a summary, and is not a substitute for the advice of a tax
advisor. Each Investor is urged to consult with a tax advisor concerning the application of the
U.S. withholding rules to such Investor.

The type of documentation required by the Investor is a function of whether the Investor is a
Foreign Person. “Foreign Persons” include nonresident aliens, foreign corporations, foreign
partnerships, foreign trusts or foreign estates (as each of those terms is defined in the Code and
Treasury Regulations). In the case of entities that are disregarded for purposes of U.S. tax law
(e.g., fiscally transparent entities with a single owner that have not elected to be taxed as a
corporation for U.S. tax purposes), such entities are treated as U.S. Persons or Foreign Persons
depending on the residence and status of their owners, rather than on where the disregarded
entities are organized. Thus, an investor that is a U.S. disregarded entity with a foreign owner
will generally be treated as a Foreign Person and should complete and submit the appropriate
Form W-8 (as discussed below) based on the owner’s status. An investor that is a foreign
disregarded entity with a U.S. owner will generally be treated as a U.S. Person and should
complete and submit Form W-9 (as discussed below).

“Regulated Affiliate” shall mean a Foreign Shell Bank that is an affiliate of a depository institution, credit union or
Foreign Bank that maintains a Physical Presence in the U.S. or a foreign country regulating such affiliated depository institution,
credit union or Foreign Bank.

8

If the Investor is a U.S. Person, please complete IRS Form W-9 (provided with instructions as
EXHIBIT C hereto). Such Investor agrees to notify the General Partner within sixty (60) days if
the Investor ceases to be a U.S. Person.

If the Investor is a Foreign Person, please complete either Form W-8BEN, Form W-8ECI, Form
W-8EXP or Form W-8IMY (along with any accompanying withholding certificates, if
appropriate), in accordance with the instructions provided below and the printed instructions
included with the appropriate form. Each of these forms and their instructions is included as part
of EXHIBIT D hereto. These forms must be updated and provided again to the General Partner in
certain circumstances, as described in the printed instructions provided with each form. 7

The following summary guidelines are provided for the benefit of those Foreign Persons required
to provide Form W-8. In addition to the information provided herein, please refer to the printed
instructions included in EXHIBIT D for more detailed guidelines.

(a) The following Foreign Persons should complete and provide Form W-8EXP:

(i) a foreign government;
(ii) an international organization;
(iii) a foreign central bank of issue;
(iv) a foreign tax-exempt organization;
(v) a foreign private foundation; and
(vi) the government of a U.S. possession claiming the applicability of Section 115(2),

501(c), 892, 895 or 1443(b) of the Internal Revenue Code.

(b) An investor that holds an Interest which is effectively connected with the investor’s
conduct of a U.S. trade or business should complete and provide Form W-8ECI.

(c) The following Foreign Persons should complete and provide Form W-8IMY:

(i) Any Foreign Person (including a custodian, broker, nominee or agent) that holds
an Interest on behalf of another person;

(ii) Any Foreign Person that is a flow-through entity or fiscally transparent
(including a foreign partnership or foreign trust);

(iii) A foreign branch of a U.S. person to establish that it is a qualified intermediary
that is not acting for its own account; and

(iv) A U.S. branch of a foreign bank or foreign insurance company, to represent that
(A) the Interest is not effectively connected with the conduct of a U.S. trade or
business and (B) that either (1) the U.S. branch is to be treated as a U.S. person
with respect to any payments associated with the Interest; or (2) the U.S. branch
is providing the documentation of the persons for whom it holds the Interest.

In order to avoid withholding on income allocated to an Interest held by the Foreign
Persons described in this paragraph 7(c), such Foreign Persons must also provide
additional information and documentation as detailed in the printed instructions
accompanying Form W-8IMY (included with EXHIBIT D hereto).

7 These forms are periodically revised by the U.S. Internal Revenue Service. Investors that need to submit an
updated Form W-8 after the initial closing of the Fund should check the Internal Revenue Service web site
(www.irs.gov) to ensure that they have the latest version of these forms.

9

Most Foreign Persons described in this paragraph 7(c) will need to provide the
information including, but not limited to, the following:

(1) A withholding statement including:

(i) the name, address, U.S. TIN# (including an ITIN#, if any) and
type of withholding documentation for every person for whom
documentation has been received;

(ii) whether each such person is a U.S. Person exempt from backup
withholding, a U.S. Person subject to backup withholding, or a
Foreign Person;

(iii) whether each Foreign Person is a beneficial owner or
intermediary, flow-through entity or U.S. branch;

(iv) how income attributable to the Interest should be allocated
among the beneficial owners on whose behalf the Interest is held
(see printed instructions to Form W-8IMY (attached) for an
alternative allocation procedure);

(A) for each beneficial owner who is a Foreign Person, the
applicable rate of withholding, country of residence, the
basis for any reduced rate of withholding, and other
information; and

(B) any other information requested by the General Partner
for purposes of fulfilling its withholding obligations.

(2) A Form W-8 and other documentary evidence supporting the information
contained in the withholding statement for each beneficial owner listed in
the withholding statement.

Certain Foreign Persons described in this paragraph 7(c) may have entered into an
agreement with the U.S. Internal Revenue Service to act as a withholding foreign
partnership, withholding foreign trust, or qualified intermediary. Such Foreign Persons
should consult the printed instructions to Form W-8IMY to determine the information
they must provide to the General Partner to reduce or eliminate withholding on income
allocated to their Interests.

(d) A Foreign Person who is not described in paragraph 7(a), 7(b) or 7(c) above, and who
will be the beneficial owner of an Interest, should complete and provide Form W-8BEN.

Please note, pursuant to the requirements of Sections 1471-1474 of the Code (the “FATCA”) the
Fund will generally be required to impose a 30% withholding tax on payments made by the Fund
to a Partner that is either a foreign financial institution (an “FFI”) as defined in Section
1471(d)(4) of the Code or a non-financial foreign entity (an “NFFE”) as defined in Section
1472(d) of the Code. To avoid this withholding tax, the Fund will require that all Partners (a)
establish with the General Partner, by providing all information that the General Partner may
reasonably request, that they are neither an FFI nor a NFFE, (b) if they are an FFI, establish with
the General Partner that they have entered into, and are maintaining, an FFI Agreement in

10

compliance with Section 1471(b)(1) of the Code, or are otherwise exempt from the withholding
requirements of Section 1471 of the Code, and (c) if they are an NFFE, certify that they have no
“substantial United States owners,” disclose all information that the Fund is required to obtain
pursuant to the FATCA regarding such substantial United States owners or adequately show that
they are otherwise exempt from the withholding requirements of Section 1472 of the Code.
Substantial United States owners are, generally, U.S. persons with at least a 10% interest (held
directly or indirectly) in the NFFE.

The General Partner will notify the Investor of any additional documentation, certification or
other actions required of the Investor in order to allow the Fund to comply with the FATCA.
While the Fund’s reporting and withholding requirements should not begin until 2013 or later, the
General Partner may request such additional documentation, certification, or other actions well in
advance of that time in order to ensure the Fund is in compliance with the FATCA. Failure to
timely provide the required information may result in the Investor’s interest in the Fund being
redeemed.

8. Privacy. If the Investor is a natural person (including a natural person investing through an
individual retirement account or “IRA”), the Investor has been furnished and carefully read the
notice regarding privacy of financial information under the U.S. Federal Trade Commission
privacy rule, 16 C.F.R. Part 313 (the “Privacy Rule”), attached hereto as Exhibit E, and agrees
that the Interest is a financial product that the Investor has requested and authorized. In
accordance with Section 14 of the Privacy Rule, the Investor acknowledges and agrees that the
Partnership may disclose nonpublic personal information of the Investor to other Limited
Partners, as well as to the Partnership’s accountants, attorneys and other service providers as
necessary to effect, administer and enforce the Partnership’s and the Limited Partners’ rights and
obligations.

9. Survival of Agreements, Representations and Warranties. All agreements, representations
and warranties contained herein or made in writing by or on behalf of the Investor, the Fund or
the General Partner in connection with the transactions contemplated by this Agreement shall
survive the execution of this Agreement and the Partnership Agreement, any investigation at any
time made by the Investor, the Fund or the General Partner or on behalf of any of them and the
sale and purchase of the Interest and payment therefor and the dissolution and termination of the
Fund.

10. Legends. The Investor consents to the placement of the legends contained on the signature page
of the Partnership Agreement and on page 1 of this Agreement and any other legend required or
reasonably advisable, as determined by Fund Counsel, by applicable law.

11. Counterparts, Execution and Delivery. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument. A facsimile or other reproduction of this Agreement may be
executed by the Investor and/or the General Partner, and an executed copy of this Agreement may
be delivered by the Investor and/or the General Partner by facsimile or similar electronic
transmission device pursuant to which the signature(s) and questionnaire responses can be seen,
and such execution and delivery shall be considered valid, binding and effective for all purposes.
At the request of any party hereto, the Investor and the General Partner agree to execute an
original of this Agreement as well as any facsimile or other reproduction hereof.

12. Amendments. Neither this Agreement nor any term hereof may be changed, waived, discharged
or terminated orally, but only with the written consent of the Investor and the General Partner.

11

13. Assignment. This Agreement is not transferable or assignable by the Investor.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the

laws of the State of Delaware in all respects as such laws are applied to agreements among
Delaware residents entered into and performed entirely within Delaware, without giving effect to
conflict of law principles thereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

12

PART II – TO BE COMPLETED BY INDIVIDUAL /
JOINT-INDIVIDUALS ONLY

1. Investor’s Representations. In connection with the Investor’s purchase of the Interest, the
Investor makes the following representation on which the General Partner, the Fund and Fund
Counsel are entitled to rely:

(a) The Interest will be held under the following type of ownership [Please check the
applicable box.]:

 Individual
 Joint Individuals [This includes any person acquiring an interest with his or her

spouse in a joint capacity, as community property or similar shared interest.]

2. Accredited Investor Representation. The Investor makes the following representation
regarding the Investor’s status as an “accredited investor” (within the meaning of Rule 501 under
the Securities Act).

 (a) The Investor has a net worth8, either individually or upon a joint basis with the
Investor’s spouse, of at least $1,000,000 (within the meaning of such terms as
used in the definition of “accredited investor” contained in Rule 501 under the
Securities Act), or has had individual income in excess of $200,000 for each
of the two most recent years, or joint income with the Investor’s spouse in
excess of $300,000 in each of those years, and has a reasonable expectation of
reaching the same income level in the current year.

 (b) The Investor cannot make the representation set forth in the clause above.

3. Qualified Purchaser Representation. The Investor makes the following representation
regarding the Investor’s status as a “qualified purchaser” (within the meaning of Section 2(a)(51)
under the United States Investment Company Act of 1940, as amended (the “Companies Act”)).9

 (a) The Investor is an individual (including any person who is acquiring the Interest
with his or her spouse in a joint capacity, as community property or similar
shared interest) who either individually or together with the Investor’s spouse,
owns Investments that are Valued at not less than $5,000,000.

 (b) The Investor cannot make the representations set forth in the clause above.

8 For purposes of this paragraph, the meaning of “net worth” as used in the definition of “accredited investor”
contained in Rule 501 under the Securities Act has been revised as of July 21, 2010 to mean the excess of total
assets, excluding Investor’s primary residence, at fair market value over total liabilities, including Investor’s
mortgage or any other liabilities secured by Investor’s primary residence only if and to the extent that it exceeds the
value of Investor’s primary residence.
9 For purposes of this paragraph 3, “Investments” and “Valued” shall have the meanings provided in EXHIBIT B
hereto.

13

4. Qualified Client Representation. The Investor makes one or more of the following
representations regarding the Investor’s status as a “qualified client” (within the meaning of Rule
205-3 under the United States Investment Advisers Act of 1940 (the “Advisers Act”), as

amended), and has checked the applicable representation:

 (a) The Investor is a natural person who has made a Capital Commitment to the
Fund of at least $1,000,000.

 (b) The Investor is a natural person who has a net worth (together with assets held
jointly with a spouse) of more than $2,000,000.

 (c) The Investor is a qualified purchaser (i.e., has checked the representation in
paragraph 3(a) above).

 (d) The Investor cannot make any of the representations set forth in clauses (a), (b)
or (c) above.

5. Public Disclosure Obligations. The Investor or its Affiliate is required, or will likely be

required, to disclose Confidential Information to a government body, agency or committee,
whether foreign or domestic, by virtue of such Investor’s (or its Affiliate’s) current or proposed

involvement in government or agency office.

 True  False

Individual Investors who have agreed to Part I and completed Part II of this Agreement may
skip Parts III, IV and V. Please (i) complete and execute the signature page to this
Agreement, (ii) complete and sign IRS Form W-9 or the applicable Form W-8, and (iii)
execute two (2) copies of the signature page to the Partnership Agreement attached as
EXHIBIT A.

14

PART III – TO BE COMPLETED BY INVESTORS WHO QUALIFY
AS IRREVOCABLE OR REVOCABLE TRUSTS ONLY

Pension trusts and other similar entities should complete Part V. Individual Retirement
Accounts and similar entities should complete Part IV.

1. Investor’s Representations. In connection with the Investor’s purchase of the Interest, the
Investor makes the following representation on which the General Partner, the Fund and Fund
Counsel are entitled to rely:

(a) The Interest will be held under the following type of ownership [Please check the
applicable box.]:

 Revocable Trust with ____ grantor(s) [Please fill in the number of grantors.]
 Irrevocable Trust

2. Accredited Investor Representation:

(a) For Irrevocable Trusts: The Investor makes the following representation regarding the
Investor’s status as an “accredited investor” (within the meaning of Rule 501 under the
Securities Act), and has checked the applicable representation:

 (i) The Investor is an irrevocable trust with total assets in excess of
$5,000,000 whose purchase is directed by a person with such knowledge
and experience in financial and business matters that such person is
capable of evaluating the merits and risks of the prospective investment.

 (ii) The Investor cannot make the representation set forth in the clause
above.

(b) For Revocable Trusts: The Investor makes the following representation regarding the
Investor’s status as an “accredited investor” (within the meaning of Rule 501 under the
Securities Act), and has checked the applicable representation:

 (i) The Investor is a revocable trust in which all of the grantors and trustees
qualify under clause (a) in paragraph 2 of Part II (i.e., an accredited
individual); OR under clause (a)(i) of this paragraph 2 of Part III (i.e.,
an accredited irrevocable trust); OR under paragraph 2(i) of Part IV (i.e.,
an accredited IRA); OR under clause (a), (b), (c), or (d) in paragraph 2 of
Part V (i.e., an accredited entity); OR under this clause (b)(i). [If the
Investor belongs to this investor category only, please provide the
names of the grantors and trustees of the Investor and the investor
category (e.g., 2(a) of Part II) which each such grantor and trustee
satisfies.]

Names of Grantors or Trustees Investor Category

 (ii) The Investor cannot make the representation set forth in the clause
above.

15