Confidential Private Placement Memorandum

CAPITAL TODAY CHINA GROWTH FUND, L.P.

$200,000,000

Limited Partnership Interests

 CAPITAL TODAY CHINA GROWTH FUND, L.P.
$200,000,000

LIMITED PARTNERSHIP INTERESTS

THIS PRIVATE PLACEMENT MEMORANDUM (THIS “MEMORANDUM”), DATED NOVEMBER 2005, NUMBERED
__________017________, IS BEING FURNISHED ON A CONFIDENTIAL BASIS TO A LIMITED NUMBER OF
SOPHISTICATED PROSPECTIVE INVESTORS FOR THE PURPOSE OF PROVIDING INFORMATION ABOUT AN
INVESTMENT IN LIMITED PARTNERSHIP INTERESTS (THE “INTERESTS”) IN CAPITAL TODAY CHINA GROWTH
FUND, L.P. (THE “FUND”). THIS MEMORANDUM AND THE INFORMATION CONTAINED HEREIN MAY NOT BE
REPRODUCED OR DISTRIBUTED, NOR MAY ITS CONTENTS BE DISCLOSED TO PERSONS WHO ARE NOT
DIRECTLY INVOLVED WITH THE PROSPECTIVE INVESTOR’S DECISION REGARDING THE PURCHASE OF
INTERESTS, WITHOUT THE PRIOR WRITTEN CONSENT OF CAPITAL TODAY CHINA GROWTH GENPAR, LTD.
(THE “GENERAL PARTNER”). BY ACCEPTING DELIVERY OF THIS MEMORANDUM, EACH PROSPECTIVE
INVESTOR AGREES TO THE FOREGOING.

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE FUND
AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE INTERESTS HAVE
NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY ANY U.S. FEDERAL OR STATE OR NON-U.S.
SECURITIES COMMISSION OR REGULATORY AUTHORITY OR BY ANY CAYMAN ISLANDS REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE INTERESTS HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE OR OTHER SECURITIES LAWS OR THE LAWS OF ANY NON-U.S.
JURISDICTION, INCLUDING THOSE OF THE CAYMAN ISLANDS, NOR IS SUCH REGISTRATION CONTEMPLATED.
THE INTERESTS WILL BE OFFERED AND SOLD ONLY TO QUALIFYING RECIPIENTS OF THIS MEMORANDUM
PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
PROVIDED BY SECTION 4(2) THEREOF AND REGULATION D PROMULGATED THEREUNDER AND IN
COMPLIANCE WITH THE APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS WHERE
THE OFFERING WILL BE MADE. THE INTERESTS ARE BEING SOLD FOR INVESTMENT ONLY, AND ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PROVIDED IN THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
THE FUND (THE “PARTNERSHIP AGREEMENT”) REFERRED TO HEREIN. ACCORDINGLY, INVESTORS SHOULD
BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF AN INVESTMENT IN THE
INTERESTS FOR AN INDEFINITE PERIOD OF TIME. THE FUND WILL NOT BE REGISTERED AS AN INVESTMENT
COMPANY UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT
COMPANY ACT”). CONSEQUENTLY, INVESTORS WILL NOT BE AFFORDED THE PROTECTIONS OF THE
INVESTMENT COMPANY ACT. THE FUND WILL NOT BE REGISTERED AS A MUTUAL FUND UNDER THE MUTUAL
FUNDS LAW (AS REVISED) OF THE CAYMAN ISLANDS. THE INTERESTS MAY NOT BE OFFERED TO THE PUBLIC
IN THE CAYMAN ISLANDS. THERE WILL BE NO PUBLIC MARKET FOR THE INTERESTS, AND THERE IS NO
OBLIGATION ON THE PART OF ANY PERSON TO REGISTER THE INTERESTS UNDER THE SECURITIES ACT OR
ANY STATE SECURITIES LAWS.

THE INTERESTS ARE OFFERED SUBJECT TO PRIOR SALE, AND ANY SUBSCRIPTION FOR INTERESTS BY AN
INVESTOR MAY BE REJECTED, IN WHOLE OR IN PART, BY THE GENERAL PARTNER FOR ANY REASON. AN
INVESTMENT IN THE INTERESTS WILL INVOLVE SIGNIFICANT RISKS, INCLUDING RISK OF LOSS OF CAPITAL,
DUE, AMONG OTHER THINGS, TO THE NATURE OF THE INVESTMENTS THE FUND INTENDS TO MAKE AND
THERE CAN BE NO ASSURANCE THAT THE FUND’S RATE OF RETURN OBJECTIVES WILL BE REALIZED OR
THAT THERE WILL BE ANY RETURN OF CAPITAL. SEE SECTION 9: CERTAIN INVESTMENT CONSIDERATIONS.
INVESTORS SHOULD HAVE THE FINANCIAL ABILITY AND WILLINGNESS TO ACCEPT THE RISKS AND LACK OF
LIQUIDITY THAT ARE CHARACTERISTIC OF THE INVESTMENT OPPORTUNITY DESCRIBED HEREIN.
INVESTORS IN THE FUND MUST BE PREPARED TO BEAR SUCH RISKS FOR AN INDEFINITE PERIOD OF TIME.

PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS LEGAL, TAX,
INVESTMENT OR OTHER ADVICE. EACH PROSPECTIVE INVESTOR SHOULD MAKE ITS OWN INQUIRIES AND
CONSULT ITS ADVISORS AS TO THE FUND AND THIS OFFERING AND AS TO LEGAL, TAX, FINANCIAL AND
OTHER RELEVANT MATTERS CONCERNING AN INVESTMENT IN THE INTERESTS AND THE SUITABILITY OF THE
INVESTMENT FOR SUCH INVESTOR.
PRIOR TO CLOSING, THE GENERAL PARTNER WILL GIVE INVESTORS THE OPPORTUNITY TO ASK QUESTIONS
OF AND RECEIVE ANSWERS AND ADDITIONAL INFORMATION FROM IT AND ITS REPRESENTATIVES
CONCERNING THE OFFERING AND OTHER RELEVANT MATTERS. NONE OF THE FUND, THE GENERAL
PARTNER OR THE PLACEMENT AGENT IS MAKING ANY REPRESENTATION OR WARRANTY TO AN INVESTOR
REGARDING THE LEGALITY OF AN INVESTMENT IN THE FUND BY SUCH INVESTOR OR ABOUT THE INCOME
AND OTHER TAX CONSEQUENCES TO THEM OF SUCH AN INVESTMENT.

IN CONSIDERING THE PRIOR PERFORMANCE INFORMATION CONTAINED HEREIN, PROSPECTIVE INVESTORS

SHOULD BEAR IN MIND THAT PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS,
AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL ACHIEVE COMPARABLE RESULTS. CERTAIN
INFORMATION CONTAINED IN THIS MEMORANDUM CONSTITUTES “FORWARD-LOOKING STATEMENTS,”
WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS “MAY,” “WILL,”
“SHOULD,” “EXPECT,” “ANTICIPATE,” “PROJECT,” “ESTIMATE,” “INTEND,” “CONTINUE” OR “BELIEVE” OR THE
NEGATIVES THEREOF OR OTHER VARIATIONS THEREON OR OTHER COMPARABLE TERMINOLOGY. DUE TO
VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THOSE DESCRIBED IN THIS MEMORANDUM, ACTUAL
EVENTS OR RESULTS OR THE ACTUAL PERFORMANCE OF THE FUND MAY DIFFER MATERIALLY FROM THOSE
REFLECTED OR CONTEMPLATED IN SUCH FORWARD-LOOKING STATEMENTS. NO REPRESENTATION OR
WARRANTY IS MADE AS TO FUTURE PERFORMANCE OR SUCH FORWARD-LOOKING STATEMENTS.

THIS MEMORANDUM WAS PREPARED BY REPRESENTATIVES OF THE FUND AND IS BEING FURNISHED BY THE
FUND SOLELY FOR USE BY PROSPECTIVE INVESTORS IN CONNECTION WITH THIS OFFERING. POTENTIAL
INVESTORS MUST MAKE THEIR OWN INVESTMENT DECISIONS.

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING TO GIVE ANY INFORMATION OR
TO MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS MEMORANDUM OR THE DEFINITIVE
SUBSCRIPTION DOCUMENTS, AND ANY REPRESENTATION NOT CONTAINED HEREIN OR THEREIN MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE GENERAL PARTNER OR CAPITAL TODAY CHINA
GROWTH MANAGEMENT, LTD., THE MANAGER OF THE FUND (THE “MANAGER”). STATEMENTS IN THIS
MEMORANDUM ARE MADE AS OF THE DATE HEREOF UNLESS OTHERWISE STATED HEREIN, AND NEITHER
THE DELIVERY OF THIS MEMORANDUM AT ANY TIME, NOR ANY SALE HEREUNDER, SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO SUCH DATE. CERTAIN ECONOMIC AND MARKET INFORMATION CONTAINED
HEREIN HAS BEEN OBTAINED FROM PUBLISHED SOURCES PREPARED BY OTHER PARTIES. WHILE SUCH
SOURCES ARE BELIEVED TO BE RELIABLE, NONE OF THE GENERAL PARTNER, THE MANAGER, THE FUND OR
THEIR RESPECTIVE AFFILIATES ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF
SUCH INFORMATION.

THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY STATE OR OTHER
JURISDICTION TO ANY PERSON OR ENTITY TO WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH STATE OR JURISDICTION. ADDITIONAL DISCLOSURE WITH RESPECT TO AN
INVESTMENT IN THE FUND BY CERTAIN U.S. AND NON-U.S. INVESTORS IS SET FORTH AT THE BACK OF THIS
MEMORANDUM. PRIOR TO THE FINAL CLOSING OF THE FUND, THE GENERAL PARTNER AND ITS AFFILIATES
RESERVE THE RIGHT TO MODIFY ANY OF THE TERMS OF THE OFFERING AND THE INTERESTS DESCRIBED
HEREIN. THIS MEMORANDUM IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PARTNERSHIP
AGREEMENT AND THE SUBSCRIPTION DOCUMENTS RELATED THERETO. IF THE DESCRIPTIONS OR TERMS IN
THIS MEMORANDUM ARE INCONSISTENT WITH OR CONTRARY TO THE PARTNERSHIP AGREEMENT (WHICH IS
AVAILABLE TO PROSPECTIVE INVESTORS UPON REQUEST), THE PARTNERSHIP AGREEMENT SHALL
CONTROL.

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, EACH PROSPECTIVE INVESTOR (AND
EACH EMPLOYEE, REPRESENTATIVE, OR OTHER AGENT OF SUCH PROSPECTIVE INVESTOR) MAY DISCLOSE
TO ANY AND ALL PERSONS, WITHOUT LIMITATION OF ANY KIND, THE TAX STRUCTURE AND TAX TREATMENT
OF THE FUND AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX ANALYSES) THAT ARE
PROVIDED TO THE PROSPECTIVE INVESTOR RELATING TO SUCH TAX STRUCTURE AND TAX TREATMENT;
PROVIDED, HOWEVER, THAT SUCH DISCLOSURE SHALL NOT INCLUDE THE NAME (OR OTHER IDENTIFYING
INFORMATION NOT RELEVANT TO THE TAX STRUCTURE OR TAX TREATMENT) OF ANY PERSON AND SHALL
NOT INCLUDE INFORMATION FOR WHICH NONDISCLOSURE IS REASONABLY NECESSARY IN ORDER TO
COMPLY WITH APPLICABLE SECURITIES LAWS.

AS USED IN THIS MEMORANDUM, “DOLLARS” AND “$” REFER IN ALL CASES TO UNITED STATES DOLLARS.

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Prospective investors with inquiries with respect to the Fund or the Interests may direct such inquiries to:

Ms. Kathy Xu Mr. Edward A. Greene

Managing Partner C.P. Eaton Partners, LLC
Capital Today Group
th
39 Floor, One Exchange Square 143 Rowayton Avenue
Central, Hong Kong Rowayton, CT 06853
United States of America

Cell: (852) 9328-7839 Cell: (203) 515-0035

Tel: (852) 2868-5526 Tel: (203) 831-2970
Fax: (852) 2868-5115 Fax: (203) 831-2976
E-mail: kathyxu@capitaltoday.com E-mail: eag@cpeaton.com

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 TABLE OF CONTENTS

1. EXECUTIVE SUMMARY .................................................................................................................1

2. SUMMARY OF PRINCIPAL TERMS ...............................................................................................4

3. INVESTMENT HISTORY .................................................................................................................5

4. INVESTMENT PROFESSIONALS AND BUSINESS ADVISORY COUNCIL ...............................10

5. MARKET OPPORTUNITY .............................................................................................................13

6. INVESTMENT STRATEGY............................................................................................................18

7. INVESTMENT PROCESS .............................................................................................................23

8. SUMMARY OF PRINCIPAL TERMS .............................................................................................27

9. CERTAIN INVESTMENT CONSIDERATIONS..............................................................................36

10. CERTAIN TAX AND LEGAL CONSIDERATIONS ........................................................................44

11. ANTI-MONEY LAUNDERING REGULATIONS.............................................................................54

SCHEDULE A: COMPANY PROFILES

SCHEDULE B: CERTAIN SECURITIES LAW LEGENDS

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1. EXECUTIVE SUMMARY
Capital Today China Growth Fund, L.P. (the “Fund”) is being formed by Capital Today Group (“Capital
Today”) with the objective of providing investors with superior returns by investing in a diversified portfolio of
private equity or equity-related investments in companies based in the People’s Republic of China (“PRC” or
“China”). The Fund will target rapidly growing PRC middle-market companies with equity values typically
between $20 million and $300 million that have proven business fundamentals and require capital for
expansion. Up to 20% of the Fund will be available for investments in early-stage companies with equity
values between $5 million and $20 million; the remaining 80% will be allocated to later-stage investments.
The Fund is seeking $200 million in capital commitments.

Capital Today China Growth GenPar, Ltd. will serve as the general partner of the Fund (the “General
Partner”) and will make all investment decisions for the Fund. Capital Today China Growth Management, Ltd.
(the “Manager”) will provide investment advisory services to the Fund and will be managed by a team of
investment professionals (collectively, the “Team”), most of whom began working together at Baring Private
Equity Asia Limited (“Baring”), with a focus on the China market.

Market Opportunity

The Fund believes that China’s domestic economy offers significant investment opportunities due to the rapid
growth and purchasing power of China’s middle class. The Fund also believes that Chinese manufacturing
strategy, in general, will transition from low-end “Made in China” products to high-end “Created in China”
products with strong brands, valuable and recognizable intellectual property, and sophisticated distribution
channels.

These dynamics are driving investment opportunities in a variety of rapidly growing sectors and companies.
Accordingly, the Fund will focus, but will not be limited to, the following sectors: Consumer, Retail, Education,
Consumer Technology, Manufacturing and Logistics.

The Fund believes that the private equity market in China is highly inefficient. While the pool of private equity
capital dedicated to China will inevitably grow over time, a vast number of middle-market companies in China
will continue to require capital due to inefficient capital market conditions. The Fund believes that privately
owned companies will continue to remain the most important growth driver of the Chinese economy, and
demand for growth capital is expected to remain strong.

Investment Strategy

The Fund’s investment strategy is a continuation of the investment philosophy and strategy previously
developed by members of the Team. The Fund will primarily target PRC middle-market companies that enjoy
a proven track record and have a favorable competitive position and attractive growth prospects. The Team
will utilize a proactive approach to deal sourcing. This will include a disciplined analysis of targeted industries
that will allow Capital Today to understand the value chain of each such industry in depth and identify its key
players. Prior to making an investment, the Team will analyze potential exit strategies and will continually
evaluate exit alternatives throughout the life of each investment.

The Fund expects to invest in companies led by entrepreneurs who have integrity, are extremely dedicated to
their business and have proven results. As a result of its local knowledge and private equity experience, the
Team has long-established relationships and an extensive network with both industry leaders and
entrepreneurs in China. The Team intends to nurture these relationships for the benefit of the Fund, allowing
the Team to identify attractive investment opportunities and generate proprietary deal flow.

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Investment Merits

• Outstanding investment history

The Team has a strong investment history. The Team has led investments in 10 companies, and managed
the exits of 6 investments. The remaining 4 unrealized investments were recently made in 2003 and 20041.

The 10 investments generated a total of $228 million in realized and unrealized value, which represents a
3.3x gross return on invested capital of $69 million over an average holding period of approximately 2.4 years.
The return consists of realized value totaling $135 million and unrealized value of $94 million. The realized
return was 4.3x invested capital over an average holding period of approximately 3.2 years.

The Team has delivered consistent, credible returns across the majority of its investments. Out of these 10
investments, ChinaHR, Vanda and Netease have returned 105x, 9.7x and 8.0x invested capital, respectively.
The remaining 7 investments have returned between 0.5x and 2.8x invested capital, with no write-offs.

• Experienced and cohesive team

The Team consists of six professionals, the majority of whom had worked together before the formation of
Capital Today. The three partners of Capital Today have a cumulative 21 years of experience of private equity
investing in China.

The Team has a proven deal sourcing capability, driven by its considerable local knowledge and experience
investing in China. The Team’s complementary skills and experience allow it to pursue a rigorous investment
strategy tailored specifically for success in China.

The founder of Capital Today, Kathy Xu, has developed a strong personal and industry reputation due to her
involvement in some of China’s most successful private equity and venture capital investments. Ms. Xu was
named “One of 25 Most Influential People in Asia - Stars of Asia” by BusinessWeek in 2004, and one of the
“Top Ten Venture Capitalists” in China by Capital magazine in 2005. Ms Xu is also a Governor of the China
Venture Capital Association.

The Team’s interests are strongly aligned with the interests of the Fund investors. Each member of the Team
owns a percentage of the management company and will be entitled to a participation in the carried interest.

• Consistent investment strategy & disciplined approach

The Fund will have a consistent growth capital investment strategy targeting mid-cap Chinese companies.
Capital Today will be executing essentially the same investment philosophy and strategy that is responsible
for generating the Team’s prior investment success.

The Fund will be disciplined and thorough in executing a consistent investment strategy to capitalize on the
China growth dynamic.

1
Does not include investments made by Bao Ma Wen, who will join Capital Today on November 19, 2005.

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The Fund will focus on, but will not be limited to, six key industry sectors (Consumer, Retail, Education,
Consumer Technology, Manufacturing and Logistics) with the following criteria:

Industry • Simple and easy to understand business

• Sizeable market
• High entry barriers
• No technology risk
Company • Leading company in the industry
• Strong business fundamentals
• Sustainable growth
Entrepreneur • Strong integrity
• Passionate about their business
• Have a proven track record
Price • Disciplined to invest at valuation that is a discount to the Fund’s estimate of value

• Strong deal sourcing capability

Capital Today utilizes an extremely proactive approach in deal sourcing. Adopting a top down approach to an
industry allows the Team to understand the value chain of each industry in-depth and identify the key players.
Due to its deep local knowledge and relationships, the Team is able to create and structure proprietary
investment opportunities with companies that possess the best potential for growth. This strong deal sourcing
capability is demonstrated by the fact that 8 out of 10 prior investments were proprietary deals.

• Proven post-investment value add

The Team has a strong track record of adding value to its investments. Initiatives include hiring senior
management teams, improving financial management, strengthening corporate governance, and assisting the
entrepreneurs in managing growth in a focused and disciplined manner.

• Proven ability to exit

Prior to making any investments, the Fund will actively structure investments with clear and realistic options.

The Team has broad experience in achieving liquidity for investors by using a variety of exit solutions,
including trade sales, initial public offerings and secondary offerings in international markets. The Team has
exited 6 out of 10 investments with 4 trade sales and 2 IPOs. The remaining 4 unrealized companies were
recent investments mainly made in 2003 and 2004, of which 2 companies were listed on the Hong Kong
Stock Exchange.

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2. SUMMARY OF PRINCIPAL TERMS
The following information is presented as a summary of certain of the Fund’s key terms only and is qualified in
its entirety by reference to the more detailed Section 8: Summary of Principal Terms and to the Amended and
Restated Agreement of Limited Partnership of the Fund (the “Partnership Agreement”). Capitalized terms
used but not defined in this executive summary are defined in Section 8: Summary of Principal Terms.

The Fund: Capital Today China Growth Fund, L.P., a Cayman Islands exempted
limited partnership.
Committed Capital: $200 million, subject to increase at the discretion of the General
Partner.
Minimum Commitment: $10 million, subject to lesser amounts being accepted at the
discretion of the General Partner.
Commitment of the $3 million, or at least 1% of the total commitments to the Fund,
Management Team: whichever is greater
Commitment Period: Five years from the initial closing.
Term: Eight years, subject to two consecutive one-year extensions at the
discretion of the General Partner.
Distributions: In general, the Limited Partners first will receive:
• a return of such Limited Partner’s Capital Contributions to the
Fund; and
• an 8% preferred return on the above amounts;
After which distributions will be made:
• 100% to the General Partner as a “catch-up” provision until the
General Partner has received a 20% carried interest;
• thereafter, 80% to the Limited Partners and 20% to the General
Partner.
Final Clawback: Yes, after-tax General Partner clawback on the final liquidation of
the Fund.
Management Fee: During the Commitment Period, 2.0% per annum of aggregate
Commitments. Thereafter, 2.0% per annum of aggregate funded
Commitments (reduced by any investments that have been written
down or written off).
Transaction, Break-up and Other Any transaction, break-up, advisory or other fees, net of expenses,
Fees: attributable to the Fund’s investments will be credited 80% against
the Management Fee.
Offering and Organizational The Fund will bear up to $1,000,000 of offering and organizational
Expenses: expenses. Placement agent fees will reduce the Management Fee
otherwise payable by the Limited Partners by an identical amount.

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3. INVESTMENT HISTORY
The Team has a successful investment history relating to private equity and venture capital investments in
China. As of December 31, 2004, the Team led the investment of $69 million in 10 companies (the
“Investments”)2. These Investments generated $228 million in realized and unrealized value, which represents
a 3.3x gross return over an average holding period of approximately 2.4 years. This return consists of realized
value totaling $135 million, and unrealized value of $94 million. On a realized return basis, the Team has
returned 4.3x invested capital over an average holding period of approximately 3.2 years.

Total Realized Unrealized

Investments Investments Investments
Cost $69 million $31 million $38 million

Value $228 million $135 million $94 million

Approx Avg. Hold
2.4 years 3.2 years 1.1 year
Period
Equity Multiple 3.3x 4.3x 2.5x

Past performance of the Investments or any other investments described herein are provided for illustrative
purposes only and are not indicative of the Fund’s future investment results. There can be no assurance that
the Fund will achieve comparable results, be able to implement its investment strategy or be able to avoid
losses.

Kathy Xu, together with other professionals at Baring, led the following nine investments, which included
sourcing, execution, management and exit of these investments. Ms. Xu served on the boards of directors in
seven of those companies. Joining Ms. Xu in two of these seven companies were other Baring board
members. All these investments were approved by the investment committee of Baring.

In addition to the nine investments at Baring, Ms. Xu led the venture investment in ChinaHR as a personal
investor and has served as Chairperson of the Board since 2000.

Profiles of each company can be found in Schedule A within.

The following is the Team’s investment history. All the data of the investments (other than ChinaHR) is based
on public information available as of year end December 2004. The data of ChinaHR was provided by the
company.

2
Does not include investments made by Bao Ma Wen, who will join Capital Today on November 19, 2005.

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Team Investment History: Overview (1)

($ millions) Investment Realized Unrealized Total Investment

Cost Value Value Value Cost Multiple
9 Investments excluding ChinaHR
Realized Investments 31 (2) 121 (2) 0 (2) 121 (2) 3.9x (2)
Total Investments 68 (3) 121 (3) 41 (3) 162 (3) 2.4x (3)

10 Investments including ChinaHR

Realized Investments 31 135 0 135 4.3x
Total Investments 69 135 94 228 3.3x
Notes:
(1) Represents data compiled by Capital Today. All the investment history data of the Investments (other than ChinaHR) is based on
public information available as of the end of December 2004.
(2) New Capital, December 2004, page 31.
(3) Reuters, “Baring Private Equity Woos China for Returns”, November 16, 2004.

Team Investment History: Details (#)

($ millions)

Publicly available information

Investment Exit Company Investment Realized Unrealized Total Equity

Company Date Date Status Cost Value Value Value Multiple
(1)
Vanda 1998 2000 Public 3.6 35.0 0.0 35.0 9.7x
2004
(2)
Yonghe King 1999 Partially Private 11.0 11.1 8.7 19.8 1.8x
Realized
(3)
Netease 2000 2004 Public 5.0 40.0 0.0 40.0 8.0x

(4)
Launch Tech 2003 Unrealized Public 8.9 0.0 10.3 10.3 1.2x

(5)
Noah Technology 2004 Unrealized Private 15.0 0.0 15.0 15.0 1.0x
2005
(6)
ChinaHR 2000 Partially Private 0.6 13.6 52.6 66.1 105.0x
Realized

No public information available

Investment Exit Company Investment Realized Unrealized Total Equity

Company Date Date Status Cost Value Value Value Multiple
(7)
NewPalm 2000 2003 Private NPA NPA 0.0 NPA 2.8x

(8)
Pan Soft 2002 NPA Private NPA NPA NPA NPA NPA

(9) Partially
Comba 2003 Public 7.0 NPA NPA 12.8 1.8x
Realized
(10)
Great Wall 2003-4 Unrealized Public NPA 0.0 NPA NPA 0.5x

Notes:
(#) Represents data compiled by Capital Today. All the investment history data of the investments other than ChinaHR is based on
public information available as at end of December 2004. NPA: Data not publicly available.
(1) The realized value represents the cash proceeds from the sale of shares on the Hong Kong Stock Exchange. Business Week,
Special Report of "Stars of Asia" (July 12, 2004, page 71).
(2) The realized value represents the cash proceeds of the trade sale to Jollibee. The unrealized value represents the projected earn-
out to be paid by 2007. According to Manila Times, "Jollibee buzzing around Indonesia market for expansion after China" (February
18, 2004), the projected earn-out is $11 million (total purchase price of $22.5 million minus first payment of $11.5 million) for 85% of
Yonghe King shares. According to China Daily (February 10, 2004), Baring held 67% of Yonghe King's shares, so the projected earn-
out to Baring is estimated at $8.7 million ($11million/85% x 67%). Reuters, "Private Equity Cashing in on China Inc Boom" (March 1,
2004). Forbes China (November 2003, page 126).

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(3) The realized value represents the cash proceeds from the sale of shares on NASDAQ after IPO. Reuters, "Baring Private Equity
Woos China for Returns" (November 16, 2004). Business Week, Special Report of "Stars of Asia" (July 12, 2004, page 71).
(4) Launch Tech is listed on the Hong Kong Stock Exchange GEM Board. The investment cost and unrealized value is calculated
based on a disclosed shareholding of 44,555,000 shares, average purchase price of HK$1.558 (based on HK Exchange Substantial
Shareholder Disclosure) and December 31, 2004 price of HK$1.80.
(5) Business Wire, "Baring Asia Announces Investment in Noah Technology Holdings Limited" (July 19, 2004). Because it is a new
private investment in 2004, based on the common practice of the private equity industry, it is assumed that it remained unrealized at
the end of 2004 and is valued at cost.
(6) ChinaHR is a venture investment by Kathy Xu, who has served as Chairperson of the Board since 2000. $13.6 million is the cash
proceeds upon the sale of 40% of the investment to Monster.com. Unrealized value is based on a put option to Monster.com (SEC
filing).
(7) Investment cost multiple figure represents realized cash return from the trade sale to HongKong.com, based on Hongkong.com's
(listed in Hong Kong Stock Exchange) public announcement. Forbes China (November 2003, page 126).
(8) Investment time is based on Forbes China (November 2003, page 126).
(9) Comba is listed on the Hong Kong Stock Exchange. The total value and the investment cost multiple figures are notional figures
based on the increase of the Comba share price, from HK$1.88 at IPO (July 2003) to HK$3.45 at December 31, 2004, assuming the
shares were bought at IPO and full amount of shares had remained unrealized at the end of 2004. Forbes China (November 2003,
page 126). Business Week, "Venture Capitalists Catch China Fever" (March 22, 2004, page 24). Red Herring, "VC in Asia: Greater
China is where the action is" (April 12, 2004).
(10) Great Wall is listed on the Hong Kong Stock Exchange. The investment cost multiple figure is a notional figure based on the
decrease of the Great Wall share price, from HK$ 13.30 (before 2-for-1 split) at IPO (December 2003) to HK$ 3.58 (after 2-for-1 split)
at December 31, 2004, assuming the shares were bought at IPO. Forbes China (November 2003, page 126). New Capital (December
2004, page 31).

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Post-Investment Value Creation

After acquiring a stake in a company, the Fund expects to play a proactive role to improve the company’s
growth and profitability by contributing expertise in the following areas:

• Strengthening management;
• Improving financial controls;
• Strengthening corporate governance; and
• Assisting entrepreneurs to manage growth.

A summary of the various value-adding initiatives in which members of the Team engaged with respect to the
10 investments is set forth below:

Company Post-investment action

Vanda • Sourced and closed the deal. Member of the board
• Closed unprofitable PC business
• Hired new CFO (interviewed 9 and chose 3 for management to select)
• Lobbied banks to continue their support
• Sourced a strategic investor
• Recruited Peregrine for software business spin-off
Yonghe King • Sourced and closed the deal. Member of the Board
• Intense involvement since it was a control stake
• Hired the site selection team from McDonalds
• Assisted founders to develop its business strategy: marketing, outsourcing
• Vetoed franchise stores and early expansion to 2nd-tier cities
• Signed-off on opening of each new store
• Sourced Jollibee as a buyer, led negotiation and closed the deal
NetEase • Sourced and closed the deal. Member of the Board. Audit Committee and Compensation
Committee
• Rode roller coaster: from zero to IPO; from delisting to a billion dollar company; changed
business model 3 times
• Led Compensation Committee. Hired and fired CEOs twice
• Led investigation of accounting misconduct, and liaison with NASDAQ and SEC to
resume listing status
New Palm • Sourced and closed the deal. Member of the Board
• Strong board participation in developing business strategy and operating budget
• Initiated cost cutting and brought down the monthly operating expenses significantly
• Initiated acquisition of another SMS company
• Led and closed the sale of the company to a strategic investor
Pansoft • Sourced and closed the deal
• Member of the Board
Comba • Sourced and closed the deal
• Provided institutional support in IPO
• Initiated analyst research coverage
Launch Tech • Sourced and closed the deal. Member of the Board
• Actively helped founders to manage growth and stay focused
• Strengthened financial management system
• Initiated research coverage by UOB and CSFB

-8-
Company Post-investment action
Great Wall • Sourced and closed the deal
• Closely monitored financial performance
Noah • Sourced and led the deal. Member of the Board
• Strengthened financial reporting and internal controls
• Assisted in the expansion of overseas market
• Assisted in selection and evaluation of potential acquisition targets
• Focused entrepreneurs on core business
ChinaHR • Sourced and closed the deal as personal investor. Chaired the Board since 2000
• Helped the company go through intense growing pains, from 5 to 800 employees and to
build a leading market position within 5 years
• Played a leading role in all major decisions: strategy, hiring, sales and marketing,
products, expansion, etc.
• Changed CEOs 2 times, brought in the “Huawei” team and built the “wolf’ culture
• Grew the revenue by more than 80% with the Huawei team and new sales system
• Brought in Monster.com as strategic investor, led negotiations and closed the deal
• Monitored post investment integration with Monster.

-9-
4. INVESTMENT PROFESSIONALS AND BUSINESS ADVISORY COUNCIL

The Capital Today Team

Kathy Xu is the founding member of Capital Today. The Team consists of six investment professionals, two
of whom will join by December 2005.

Kathy Xu, Founder, Managing Partner

Ms. Xu has over ten years of experience in private equity and venture capital investment in China. She
founded Capital Today in July 2005. Previously, Ms. Xu was the China Head and Managing Director at
Baring Private Equity Asia Limited (“Baring”) where she worked for seven years since early 1998. Prior to
Baring, from 1995 to 1998, Ms. Xu was an investment manager of Peregrine Direct Investments in Hong
Kong. Prior to that, from 1992 to 1995, she was a senior auditor at Price Waterhouse in Hong Kong. Prior to
joining Price Waterhouse, she was a manager of Bank of China in Beijing. She serves on the board of
Governors of the China Venture Capital Association. Ms. Xu has a B.A. degree from Nanjing University and
is qualified as a Certified Public Accountant in the United Kingdom.

Alex Yu, Partner

Mr. Yu has over 12 years of experience in private equity and financial services. Prior to joining Capital Today,
Mr. Yu worked at Baring Private Equity Asia Limited, which he joined in 2002. From 1997 to 2002, Mr. Yu
was the Chief Representative of Prudential Securities in Shanghai, focusing on the international financing of
China-related businesses. Prior to that, from 1996 to 1997, he was with UBS in Shanghai. In the second half
of 1995, Mr. Yu served as a Managing Director of J&A Securities in Shanghai. Prior to that, Mr. Yu worked
for Shanghai International Securities Company Limited for two years, with his last position there as Director.
Mr. Yu has a B.A. degree in Applied Physics from Fudan University and a Masters degree in World Economy
from East China Normal University. Mr Yu is a Chartered Financial Analyst.

Kelvin Yu, Vice President

Mr. Yu has over five years of working experience in private equity and financial services. Prior to joining
Capital Today, Mr. Yu worked at Baring Private Equity Asia Limited, which he joined in 2003. Prior to that,
from 2002 to 2003, Mr. Yu was with the Mergers and Acquisition Team of ING Baring. From 2000 to 2001, he
was with the Mergers and Acquisitions Team of JP Morgan. Prior to that, Mr. Yu was an Indonesia country
analyst with the Economic Development Board of Singapore, where he specialized in macroeconomic and
sovereign risk analysis, and facilitated cross border investment initiatives. Mr. Yu has a B.A. degree in
Business Administration (Hons.) from the National University of Singapore and is a Chartered Financial
Analyst.

Linda Lee, Chief Financial Officer

Linda Lee has over 10 years of experience in venture capital and startup companies, with a special focus on
financial control and reporting, fund raising and investor relations. Prior to joining Capital Today, from 2001
to 2005, Ms. Lee was the interim Chief Financial Officer /Advisor at ChinaHR.com. Prior to that, from 1998 to
2001, Ms. Lee was a Vice President with Fortune Tech Investment and was responsible for financial
reporting, internal control, fund raising and investor relations. Ms. Lee was also a founder and former Chief
Financial Officer of a China-based computer peripheral manufacturer. Ms. Lee has a Master of Science in
International and Public Affairs from Columbia University and an M.B.A. from the University of Houston,
Texas.

- 10 -
The following investment professionals will join the Team by December 2005:

Bao Ma Wen3, Partner

Mr. Wen has over seven years of experience in private equity and venture capital investment and three years
in investment banking. Prior to joining Capital Today, Mr. Wen worked as a Principal of Actis Capital LLP .
Previously, Mr. Wen worked as Investment Manager of Intel Capital responsible for Intel Capital’s Shanghai
Office, where he worked since 2000. Prior to that, from 1998 to 2000, Mr. Wen worked as an Investment
Manager in the Private Equity Department of American International Group, Inc. Mr. Wen has a Masters
degree in Electrical Engineering from Tsinghua University and an M.B.A. degree from the London Business
School.

Min Fang4, Vice President

Mr. Fang has over four years of experience in private equity and strategy consulting. Prior to joining Capital
Today, Mr. Fang worked at Baring Private Equity Asia Limited, which he joined in 2004. Prior to that, from
1999 to 2002, he worked with the Boston Consulting Group in Shanghai. Mr. Fang has a B.A. degree in
Electrical Engineering from Zhejiang University, a Master of Economics (International Finance) from Fudan
University and an M.B.A. from Harvard Business School.

A summary of the Team and their prior professional experience is given in the following page.

Business Advisory Council

A number of senior industry executives across a broad range of industries have agreed to be members of the
Fund’s Business Advisory Council. The exact membership may change from time to time as determined by
the General Partner. The Business Advisory Council’s role will be to advise and support the Fund at all
stages of the investment cycle. The members of the Business Advisory Council will be able to provide
valuable economic and political insight, broad and entrenched local contact networking and proven operating
experience. The Fund will be able to benefit from these capabilities to gain access to proprietary deal flow
and expert knowledge to assist in the evaluation of investments and development of portfolio companies.

3
Bao Ma Wen will join Capital Today on November 19, 2005.
4
Min Fang will join Capital Today on December 8, 2005.

- 11 -
 SUMMARY OF PRIOR EXPERIENCE

Start
Name Title Age Date Company Last Position Education
Date
Kathy Xu Founder & 38 Jul-05 1998 to 2005 Baring Private Equity Asia Managing Director & China Head UK CPA (ACCA)
Managing
1995 to 1998 Peregrine Direct Investments Senior Manager Nanjing Univ, BA
Partner
1992 to 1995 PriceWaterhouse Senior Accountant
1988 to 1992 Bank of China Beijing Assistant Manager
Baoma Wen Partner 43 Nov-05 2004 to 2005 Actis Capital Partners Principal London Business School, MBA
2000 to 2004 Intel Capital Investment Manager Tsinghua Univ., Master of Engineering
1998 to 2000 AIG Investment Corp Manager
1995 to 1998 Jardine Fleming / JP Morgan Executive
Alex Yu Partner 36 Oct-05 2002 to 2005 Baring Private Equity Asia Principal Chartered Financial Analyst
1997 to 2002 Prudential Securities Inc. China Chief Representative (VP) East China Normal University, MA, Econ
1996 to 1997 UBS Authorized Officer Fudan Univ., BA, Physics
1995 to 1995 J&A Securities Co. Ltd. Managing Director
1993 to 1995 Shanghai Internationals Securities Director
Kelvin Yu Vice 32 Oct-05 2003 to 2005 Baring Private Equity Asia Vice President Chartered Financial Analyst
President
2001 to 2002 ING Baring (M&A) Analyst National Univ. of Singapore, BBA
2000 J.P. Morgan (M&A) Analyst
1999 Singapore Economic Develop Board Senior Officer
Min Fang Vice 32 Dec-05 2004 to 2005 Baring Private Equity Asia Associate Harvard Business School, MBA
President
1999 to 2002 Boston Consulting Group Associate Fudan Univ., MA, International Finance
Zhejiang Univ., BA, Electrical Engineering
Linda Lee Chief 49 Jul-05 2001 to 2005 ChinaHR.com CFO & Business Advisor Columbia Univ., MS, International Affairs
Financial
1998 to 2001 Fortune Tech Investment Vice President Univ. of Houston, MBA
Officer
1995 to 1998 Complete Power Limited Co-founder & CFO
1993 to 1994 Federal Home Loan Bank of NY Credit Analyst

- 12 -
5. MARKET OPPORTUNITY
The Fund believes there is tremendous potential for investing in growth opportunities in China. Accordingly, it
has developed two investment themes that it believes will enable the Fund to capitalize on such growth
opportunities for the benefit of Fund investors:

• Capture the booming middle class and their changing lifestyle

• Capture the change from “Made in China” to “Created in China”

Capture the Booming Middle Class and Their Changing Lifestyle

The Fund believes that China’s domestic economy is becoming increasingly important due to the recent rapid
growth and increased purchasing power of China’s middle class. Although government spending and capital
investment historically have been important stimuli of growth, the significance of the individual Chinese
consumer has rapidly increased in recent years, as highlighted by the 47.7% increase in disposable income
from 1999 to 20035. Retail sales also have increased by 67% from 1997 to 2003, further evidencing the
growing purchasing power of the Chinese consumer6.

• The Shift from a Rural to an Urban Population

Historically, up to 80% of China’s population has been classified as “rural”. As of 2003, however, the
proportion of China’s rural citizens has declined to 60%7. From 1990 to 2003, industrialization has driven a
massive migration of approximately 300 million people from rural to urban areas8. The corresponding rise in
affluence and living standards has driven the growth of the middle class. For example, Shenzhen, a city in
the southern province of Guangdong bordering Hong Kong, has grown in the past 20 years from a small
fishing village to a city of approximately 6 million people and GDP per capita of approximately $7,0009.

The Fund believes the shift from a rural to an urban population and the corresponding growth of the middle
class is significant. The Fund believes that the increasing urbanization of China is likely to result in
substantial economic opportunities, first for the growing urban markets, and second for the rural markets as
rural communities adjust to the outflow of their workforce and the inflow of capital from migrant workers.

5
EIU Country Forecast – China, April 2004.
6
National Bureau of Statistics of China, 2004.
7
National Bureau of Statistics of China, 2004.
8
National Bureau of Statistics of China, 2004.
9
Statistical Bureau of Shenzhen Municipal Government, 2004.

- 13 -
The following chart10, which shows that China now has over a hundred cities with a population exceeding one
million, further illustrates this shift from a rural to an urban population:

• The Unique Characteristics of Specific Economic Regions

China is currently divided into three economic regions, the “coastal region,” the “interior region” and the
“western region,” each with its unique characteristics and drivers of growth. The following chart11 shows
population concentrations for each of the three economic regions.

10
New York Times, 2004.
11
McKinsey Quarterly 2004.

- 14 -
The coastal region includes the six most economically dynamic provinces of China: Guangdong, Fujian,
Zhejiang, Jiangsu, Shandong and Liaoning. These provinces, with an estimated population of 482 million, are
responsible for 58% of China’s GDP. By comparison, the interior region and the western region, with an
estimated combined population of 710 million, are responsible for only 38% of China’s GDP. The GDP per
capita in the coastal region $2,117 is approximately three times that of the interior region $765.

The Fund believes that China is better understood as a collection of regional markets, rather than one
homogenous territory. As a result, from an investment perspective, it is critical to understand the regional
markets and customer segments applicable to each potential investment, as well as how a prospective
portfolio company intends to serve these markets.

• The Impact of the Booming Middle Class

The growth of the middle class has led to increased demand for certain categories of goods and services,
including homes, cars, branded goods, retail chains, education, entertainment, healthcare and travel. As the
Chinese consumer becomes more sophisticated, the Fund believes that new categories of goods and
services will be created to meet the changing demands of the middle class. Likewise, logistics and retail
channels will need to be improved or developed to accommodate this increased demand and sophistication.

China’s consumption of selected consumer products as a percentage of global consumption is shown in the
charts below12:

Fish
Beef & Veal
35.0%
13.0% 12.6% 32.3%

12.0%
30.0%
11.0%
9.8%
10.0%
25.0%
9.0% 22.1%

8.0% 20.0%

7.0%

6.0% 15.0%
1998 2003 1998 2003

Washing Machines
20.0%
Cellphone users
25.0% 18.0%
18.0%
20.1%
20.0% 16.0%

14.0%
15.0%
12.0%
10.6%
10.0%
7.5%
10.0%
5.0%
8.0%

0.0% 6.0%
1998 2003 1998 2003

The Fund believes that the emergence of a large and rapidly growing domestic market will result in
investment opportunities in a variety of rapidly growing industry sectors and companies whose performance

12
Fortune Magazine, October 11, 2004.

- 15 -
will be more closely linked to the rapidly growing Chinese domestic economy, and less correlated to business
cycles in the United States and Europe.

The following are examples of the positive impact China’s rising economic affluence has had on specific
investments with which the Team has been involved:

- Yong He King: Fast Food Chains. Rather than spend valuable personal time preparing meals at
home, middle class families are increasingly choosing to dine out. Yong He King, along with other
fast food chains, have benefited from this trend.

- Great Wall / LaunchTech : Automobiles. With rising income levels, Chinese consumers have
begun their love affair with the automobile. Every major urban area in China has seen increased
ownership of automobiles. This trend has led to rapid growth, not only in the core automobile
manufacturing industry, but also in auxiliary industries such as after-market car components, car care
and vehicle diagnostic kits. Great Wall and LaunchTech have benefited from this trend.

- Netease / NewPalm / ChinaHR : Internet usage. With increasing technological savvy and
sophistication, the Chinese internet sector is one of the fastest growing in the world. Companies in
this sector have evolved from simple, Chinese language portals to multi-level service providers,
providing value services such as instant messaging, short messaging services (commonly known as
“SMS”) and online games. Netease and NewPalm are direct beneficiaries of this rapid growth trend.
Netease’s revenues grew from $1.9 million at investment in 1999 to $109 million in 2004 at the time
of exit13. ChinaHR’s revenues grew from $0.16 million in 1999 to $7.21 million in 200414.

- Noah : Education. Chinese culture has always emphasized education as a means of social mobility.
Together with demographic factors such as the “one-child” policy, the education sector has seen
rapid growth due to increased levels of disposable household income dedicated to the educational
needs of a single child. Noah has benefited from this trend.

Capture the change from “Made in China” to “Created in China”

• The Abundance of Low Cost and Skilled Labor

China’s labor force is estimated at 778 million, with an average hourly wage of $0.89. By contrast, the
average hourly wage is $15.55 in the United States and $18.89 in Japan15. Even for highly skilled personnel,
such as engineers with advanced degrees, annual salaries are typically approximately $7,000 in China,
compared to over $100,000 in the United States16.

China’s labor force is considered skilled and hard-working. Over the past 20 years, Chinese laborers,
typically farmers’ daughters and sons in their 20s, have migrated to industrial cities in the Peal River and
Yangtze River Delta areas and have been well trained by Taiwanese and Hong Kong mid-level managers.
For example, in a small city such as Dongguan, Guangdong Province, there are approximately 2 million
factory workers being managed and trained by almost 30,000 mid-level Taiwanese managers who are
resident in Dongguan17. Local entrepreneurs in China have indicated anecdotally to the Team that workers
typically prefer that factories change from three to two shifts per day, enabling workers to work longer hours
for additional pay. A hard-working labor force translates into faster turnaround times for new products, which
is increasingly critical as competition grows among manufacturing businesses.

13
Company listing prospectus and annual reports.
14
Company audited accounts and management accounts.
15
OECD, EIU, ILO, National Statistics Committee.
16
The Institute of Electrical and Electronics Engineers, Inc, Electronic Engineering Times (Asia), 2003.
17
The China Dream, Joe Studwell 2002.

- 16 -
In addition to blue collar workers, China produces approximately 3.4 million college graduates per year,
resulting in a large pool of highly trained, low-cost white collar workers. Each year, approximately 450,000
students graduate from Chinese universities with engineering degrees, compared with 60,000 in the United
States18. The annual salary of a new graduate with an engineering degree is approximately $4,000 in
Shenzhen, compared with approximately $60,000 in Silicon Valley19. China currently has about 20 million
students pursuing higher education. By 2010, Chinese officials estimate that at least 20% of high school
graduates will be enrolled in some form of higher education, with this percentage increasing to 50% by
205020.

• China’s Manufacturing Clusters

Since the early 1980s, China has developed a critical manufacturing base in a broad range of industries
clustered around the Pearl and Yangtze River Deltas. In the area of electronics manufacturing, China has
developed a dense network of sub-components, materials suppliers, and logistics service providers. The
Fund believes that it would be difficult and expensive to replicate this hub of knowledge and capabilities
outside of China, despite the fact that other Asian countries may have lower labor costs.

The Fund believes that one of the most important differences between China and Taiwan is that the majority
of Taiwanese manufacturers concentrate on original equipment and original design manufacturing
(“OEM/ODM”). Because of the relatively limited size of the Taiwanese domestic market, most Taiwanese
manufacturers do not own the brand or customer network and therefore develop OEM/ODM business models.

In contrast to the Taiwanese model, the Fund believes that China’s manufacturers can expand beyond
OEM/ODM models because of the greater size of the domestic market in China. Further, successful Chinese
manufacturers not only possess strong manufacturing ability, they also seek to develop strong research and
development programs, brands, marketing and a distribution network. The Fund believes that if a PRC
manufacturer can successfully establish a top-tier market position in the Chinese domestic market, this will
greatly support the company’s efforts in achieving a top-tier international position in terms of product volume
and revenue scale.

The development of the Chinese manufacturing strategy described above is similar to the historical
development of the Japanese manufacturing industry as it progressed through the following stages:

- Stage 1: Low cost, low quality products

- Stage 2: Low cost, reasonable quality products
- Stage 3: Premium quality and brand products

The Fund believes that China is currently in Stage 2, and will most likely be able to reach Stage 3 within the
next 10 years. It further believes that Chinese products will eventually transition from low-end “Made in
China” to high-end “Created in China” products with strong brands, valuable and recognizable intellectual
property and sophisticated distribution channels.

18
The Wall Street Journal, September 30, 2005.
19
Alibaba.com, August 1, 2005, American Preferred Jobs, September 2005.
20
CS Monitor, July 29, 2005.

- 17 -
6. INVESTMENT STRATEGY

The Fund’s Overall Investment Philosophy

The Fund is being formed by Capital Today with the objective of providing investors with superior returns by
investing in a diversified portfolio of private equity or equity-related investments in companies based in China.
The Fund will seek to target rapidly growing PRC middle-market companies with equity values typically
between $20 million and $300 million that have proven business fundamentals and require capital for
expansion. Up to 20% of the Fund will be available for investments in early stage companies with equity
values between $5 million and $20 million; the remaining 80% will be allocated to later stage investments.

The Fund’s overall investment philosophy will be guided by three major principles:

• Investing in the “right industry”

• Investing in the “right entrepreneurs”
• Investing at the “right price”

Investing in the “Right Industry”

While maintaining an overall objective of diversification, the Fund expects to have a primary focus on a group
of core industries that it believes will have the best potential for growth in China. While Capital Today believes
that China’s economy as a whole will continue to grow, it believes that, at different stages of China’s
macroeconomic growth cycle, different industries will be at the forefront of this growth. The Fund believes
that selecting the right industry, thoroughly studying the value chain of the selected industries and talking to
multiple players within the same industry will allow it to understand the relative dynamics of the industry, the
sustainability of related growth and the potential for profit through investments in targeted companies.

Based on the Fund’s twin investment themes of “Capture the booming middle class and their changing
lifestyle” and “Capture the change from ‘Made in China’ to ‘Created in China’,” the following are industry
sectors that the Fund considers to be key growth sectors in China:

Consumer. Companies in the consumer sector have significant growth potential in the Fund’s investment
horizon due to the rapid increase in private sector wealth and the development of a larger middle class in
China. The Fund believes that various sub-sectors such as food and beverage, packaged food, and
household and personal care consumer products have excellent growth prospects. The Fund believes that
key drivers of value are well-developed brands and nationwide distribution and sales networks.

Retail. Retail companies have significant growth potential in the Fund’s investment horizon. The greater
purchasing power and brand consciousness of China’s middle class will give rise to a need to distribute
consumer products in a more efficient, consumer-friendly shopping environment where there is familiarity and
consistency of products and services. The Fund believes that modern retail formats (hypermarkets,
convenience stores and specialty retail stores) will take away significant market share from traditional retail
channels such as “mom & pop” stores and department stores, and will have excellent growth prospects. The
Fund believes that the key drivers of value are a solid and proven chain store management system upon
which a scalable business can be built and a highly detail-oriented execution team. The size of the store
network is also critical due to economies of scale.

Consumer Technology. The Fund will not assume technology risk; however consumer technology
companies have significant growth potential in the Fund’s investment horizon due to the rapid development of
China’s communications, wireless and internet sectors. The Fund believes that demands from Chinese
consumers to remain connected and informed, and to engage in online transactions, will spur the formation of
new companies that will serve the networked economy. As an indication of size and growth prospects, there
are an estimated 320 million mobile phone users in China as of 200421. The number of mobile phone users is

21
Xinhua News, October 2004.

- 18 -
increasing at the rate of 55 million users per year, a 17% annual growth rate. The number of internet users in
China grew by 9 million in the first half of 2005 to reach a total of 103 million. This represents an increase of
18.4% over the same period in 2004. While more than 67% of the US population has access to the Internet,
the corresponding percentage in China is only 7.9%, which suggests the latent potential for significant
growth22.

Education. Education and education-related companies have significant growth potential in the Fund’s
investment horizon due to the Chinese tradition of emphasizing education as a means of social mobility. In
addition, the Fund believes that due to favorable demographics in terms of the “one-child” policy and the rapid
income growth of the middle class per-capita spending per child on education related purchases will continue
to grow. The Fund believes that education providers, manufacturers and distributors of education products
will have excellent growth prospects.

Manufacturing. Manufacturing companies have significant growth potential in the Fund’s investment horizon
due to China’s importance as the “Factory of the World” and the evolution from “Made in China” to “Created in
China.” Manufacturing companies with domestic or export focus will continue to grow in scale, lower costs,
improve production quality, and take market share from international manufacturers. The Fund believes that
light manufacturing companies in the electronics equipment, auto parts, consumer products and education
supplies will have growth prospects.

Logistics. Logistics service providers have significant growth potential in the Fund’s investment horizon due
to the continued need to improve upon China’s logistics distribution network. As market competition gradually
increases the need for more efficient and lower-cost distribution of goods and services in China, logistics
companies (express logistics, 1PL, 2PL, 3PL, long haul, less-than-truckload, etc.) will continue to grow quickly
in scale and importance to the economy.

Investing in the “Right” Entrepreneurs

Once the Team has conducted its disciplined analysis of a targeted industry, it will identify and select
companies with the right entrepreneurs who are trustworthy, are extremely dedicated to their business and
have proven track records.

The Fund believes that targeting the company with the right entrepreneur is one of the critical skills required
for successful investing, as the selection of the right entrepreneur enhances the Fund’s return on an
investment.

22
China Daily, July 22, 2005.

- 19 -
In the Team’s experience, Chinese entrepreneurs can be broadly classified into the following categories:

Type of CEO Ex-MNC CEO Overseas Returnee Homegrown CEO

Positive attributes • Manages by implementing
systems and corporate
culture
• Familiar with world class
standards for management
and product quality
• Good fundraiser and M&A
savvy
Limitations • High operating costs
• Big opportunity cost and lack
of commitment if no initial
public offering in 3 years
• Lack of killer instinct
Strategy • Invest in their second
venture, after another
investor has “paid the tuition”
for their first venture
• Typically smart and a fast
learner
• Bi-lingual and
bi-cultural
• Good fundraiser and M&A
savvy
• Limited operations
experience in China
• Limited local “people
management” skills
• “Building to Flip” rather than
“Building to Last”
• Select CEOs who have
survived the “bubble burst”
and have learned valuable
lessons by experience
• Strong killer instincts
• Manages with a mean, lean
operation
• Well-versed with local culture
and local requirements
• Limited experience with best-
practice corporate
governance and board
function
• Not capital market savvy
• May carry historical baggage
• Focus on later stage
companies with proven track
record
• Hire a Western trained CFO

With respect to any targeted portfolio company, the Team intends to invest a substantial amount of time
interviewing its founder/CEO and the company’s core management team in order to assess their vision,
business acumen, leadership and execution capabilities. Such meetings will be supplemented with
information gathered from interviewing the company’s suppliers, customers and competitors.

The Fund believes that adopting such a comprehensive, systematic approach will allow it to:

• Cross-reference the perceived business acumen and personal integrity of the management team
from various sources;
• Assess leadership and people management skills;
• Identify potential areas of improvement in the management team; and
• Identify key motivations of the management team and align its interests with those of the Fund.

Investing at the “Right Price”

The Fund intends to invest only at the “right price” to minimize the Fund’s general exposure to risk. Generally,
the entry valuation will reflect:

• A thorough understanding of the sustainability of the target company’s growth and profitability;
• A thorough understanding of the target company’s financial condition, future earnings and drivers of
estimated value; and
• A discount to the Fund’s estimated value, due to the size of the equity ownership (and, if applicable,
the company’s unlisted status).

- 20 -
The Fund believes it can mitigate any overcapacity risks associated with investing in China by:

• Focusing on leading companies with strong market share;

• Investing in industries and companies with well developed barriers to entry;
• Investing in companies with a strong brand and distribution network; and
• Avoiding “fads” and focusing on strong business and financial fundamentals.

The Fund’s Overall Investment Strategy

Based on its understanding of the investment environment in China and its investment philosophy, the Team
has developed the following investment strategy and process which it will apply to all investment opportunities
for the Fund on a consistent and disciplined basis.

The initial evaluation criteria for expansion and growth capital candidates can be summarized as follows:

Expansion Capital Parameters Criteria

Company equity values $20 million to $300 million pre-money

Industry status • Simple and easy to understand business

• Sizeable market
• High entry barriers
Company status • The leading company in the industry
• Strong business fundamentals
• Sustainable growth and profitability
Revenue growth 25% to 50% annually for the next three years

Average investment size $10 million to $30 million

Equity participation 10% to 30%

Return drivers • Returns to be generated primarily through earnings growth and

Target Investment returns
Limit downside and risk of
principal loss
multiple expansion
• Base case of 3x – 4x invested capital over a three to five year period
• Upside case of 6x – 8x invested capital over a five to eight year
period
• Invest in profitable businesses
• Select leading players with proven track records
• Extensive due diligence
• Entry value selected with margin of safety to reflect risk
• Structural preferences

- 21 -
The initial evaluation criteria for early stage candidates can be summarized as follows:

Early Stage Parameters Criteria

Company equity values $5 million to $20 million pre-money

Industry status • Attractive industry fundamentals in terms of growth

• Technology, applications and/or products and services

Company status • Acceptable business plan and proof-of-concept

• Proven customer base with revenues
• May not be profitable currently, but growing fast

Average investment size $3 million to $6 million

Equity participation 20% to 40%

Return drivers • Attractive industry

• Very capable and savvy founders
• Low burn rate and strong survival capability
• Low entry value and substantial equity percentage at exit

Investment returns 10x – 20x invested capital for home run investments

Limit downside and risk • Will not bear the following risks
of principal loss - Technology
- Product
- Market demand
- Management
• Will bear the following risks
- Execution
- Timing
- Exit

- 22 -
7. INVESTMENT PROCESS
To execute its investment strategy, the Team will rely upon a systematic, rigorous and thorough investment
process to select and monitor the Fund’s investments.

The overall investment process incorporates the following components:

• Proactive deal sourcing;

• Screening and preliminary assessment;
• Due diligence;
• Investment committee approval;
• Protecting the Fund’s interests;
• Post-investment monitoring; and
• Exit.

Proactive Deal Sourcing

The Fund believes that the private equity market in China is deep but highly inefficient. While the pool of
private equity capital dedicated to China will inevitably grow over time, a vast number of middle-market
companies in China will continue to require capital due to inefficient capital market conditions. The Fund
believes that privately owned companies will continue to remain the most important growth driver of the
Chinese economy, and demand for growth capital is expected to remain strong.

The Team intends to take an extremely proactive approach in deal sourcing. Adopting a top down approach
to an industry allows the Team to understand the value chain of each industry in depth, and identify key
players. The Team then develops relationships with a wide array of industry leaders, which frequently leads to
proprietary transactions due to the deep knowledge and relationships generated by the Team.

Having invested in China over the past 10 years, the Team has developed an extensive network of
relationships throughout China’s entrepreneurial community, which allows the Team to source attractive
opportunities on behalf of the Fund.

The Fund has also assembled a Business Advisory Council, consisting of successful and influential China-
based entrepreneurs and industry captains. See Section 4: Investment Professionals and Business Advisory
Council. The Fund expects that these Business Advisory Council members will assist the Fund in sourcing
and assessing specific opportunities and industry trends due to their unique “insider status”, as well as
through their contacts, knowledge and relationships.

The Fund believes that the proven investment history of the Team and its association with entrepreneurs,
together with the credentials of the members of its Business Advisory Council, provide it with a strong
franchise advantage in originating proprietary deal flow in China, thereby reducing any reliance on investment
banking intermediaries.

Screening and Preliminary Assessment

Potential investment opportunities will be screened initially by the originating Team member to determine
whether the opportunity meets the Fund’s investment criteria and return hurdles.

Capital Today will screen deal flow for companies that match the Fund’s stated investment strategy and that
exhibit most or all of the following criteria:

• Businesses that are straightforward and easy to understand;

• Sizeable, quantifiable market with strong growth prospects and certain barriers to entry;
• Leading players in the industry with fundamental values such as brand, distribution network, R&D
capability, proven system and culture;
• Dedicated management teams with integrity and proven track records;

- 23 -
 • Consistent financial performance in terms of profitability and return on invested capital;
• Sustainability of growth and profitability with no technology risk;
• An entry valuation with a sufficient margin of safety at a discount to the Fund’s estimated value; and
• Reasonably likely to meet the return hurdle of at least 3x invested capital and an IRR of 30%.

Due Diligence

The Team’s due diligence process is an in-depth analysis of the target company and its industry. The Fund
will typically perform four key types of due diligence i.e., business, legal, financial, and industry, and often will
engage external accounting firms, legal firms, and industry consultants to complete its analysis.

The business due diligence process will typically include the following:

• Extensive interviews with management, including the chief executive officer, chief operating officer,
chief financial officer, chief technology officer, various department heads, including sales and
marketing, legal, human resources and procurement;
• Interview(s) with members of the company’s board of directors and auditor, if any;
• Extensive interviews with and analysis of the company’s suppliers and customers;
• Interviews with the company’s competitors;
• Site visits of major operation and production facilities, sales offices and points of sales;
• Review of the company’s organization chart, staff performance evaluation and compensation system;
• Review of the company’s accounting, budget and internal control system and board function;
• Financial analysis of the past three to five years of performance, including actual vs. forecast
performance, three-year trend analysis of key performance indicators and major profit and loss,
balance sheet and cash flow items; and
• Financial forecast with rigorous analysis of the various assumptions to identify key valuation drivers.

The legal due diligence process will typically be performed by top-tier China legal counsel and will include the
following:

• Legal due diligence of company to verify, among other things, that the target company is in
compliance with all applicable laws and regulations, review of major contracts, review of potential and
contingent litigation, past defaults, etc; and
• Due diligence on transaction-specific issues, which may involve advice on structuring the transaction
and tax implications.

The financial due diligence will typically be performed by a “big four” international accounting firm and will
include the following:

• Independent verification of the target company’s financial data, including a financial audit if
necessary;
• More detailed due diligence into company financials, including a detailed analysis of the company’s
financial statements, accounting policies and internal control systems; and
• Follow up review and analysis of issues and questions identified by the Team during business due
diligence.

The industry due diligence will typically be performed by a top tier industry research company and will include
the following:

• Independent verification and assessment of industry and company prospects;

• Competitive benchmarking and verification that the company’s key performance indicators are in line
or superior to industry norms;
• Identification of sources of the target company’s competitive advantages, capabilities and
weaknesses; and
• Identification of the limitations and obstacles to the target company’s growth.

- 24 -
Investment Committee Approval

After discussion and review of the due diligence findings, and assuming that the due diligence process has
confirmed the attractiveness of the investment opportunity, the approval of any Fund investment will require
the approval of a majority of the members of the Fund’s investment committee (the “Investment Committee”).
The Investment Committee will consist of three Partners, Kathy Xu, Alex Yu and Bao Ma Wen, who will join
by December 2005, with each member holding one vote. As Managing Partner, Ms. Xu will have the right to
veto any proposed Fund investment.

Protecting the Fund’s Interests

In connection with the final review of the investment opportunity, all legal documentation will be reviewed by
the Fund’s legal advisors to ensure that it accurately reflects due diligence findings, and if the Fund is making
a minority investment, that the interests of minority shareholders are adequately protected.

The Fund expects to carefully protect its interests with two major strategies:

• Legal and contractual protections

• Alignment of interests with the entrepreneur

Legal and Contractual Protections

The Fund will typically make a portfolio company investment through an offshore holding company structure,
which is intended to ensure that legal matters between the company’s founder, the Fund and its affiliates and
the company are governed by Hong Kong or English law.

The investment instrument will typically be structured in the form of convertible, preference shares,
convertible loans or private investments in publicly traded companies on established and regulated
exchanges outside mainland China. The Fund intends to seek the following rights:

• Approval of financial and capital expenditure budgets;

• Determination of the compensation of senior executives;
• Approval of stock option plans;
• Submission of financial reports on a regular and timely basis;
• Veto rights on changes to capital structure or dividend policy and related party transactions;
• Co-sale, drag along and mandatory IPO rights, including approval of all acquisition transactions;
• Approval of the removal or appointment of senior management, including the chief executive officer
and the chief financial officer; and
• Representation on the board of directors, and on the audit and compensation committee of the board
where the Fund expects to exert strong influence on improving corporate governance and internal
controls.

Alignment of Interests with the Entrepreneur

The Fund believes that an alignment of interests with the founders and management of a portfolio company is
the ultimate protection of its interests. The Fund prefers to invest in companies which are the only substantial
businesses of their founders. When a company represents a significant portion of its founder’s net worth,
founders/CEOs have typically spent a number of years building the company and have a personal interest in
growing the business. In addition, the Fund also seeks to incentivize founders and the management team
through instruments such as stock options.

Post-Investment Monitoring

In connection with a portfolio investment, the Fund intends to seek the right to:

• Appoint at least one director to the company’s board of directors;

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 • Appoint a member to the board’s audit committee;
• Appoint a member to the board’s compensation committee;
• Review and approve financial budgets;
• Review and approve capital expenditures; and
• Veto certain major issues

The Fund will also seek to obtain the following information from portfolio companies on a regular basis:

• Quarterly financial statements and forecasts;

• Management information, including key financial metrics (income statements, balance sheet and
cash flow statement items) and key performance indicators such as headcounts, units sold and
customer numbers;
• Details of the annual budget and all budget reviews;
• Quarterly updates;
• Filings with relevant regulators for listed investments;
• Copies of all board minutes, shareholders’ resolutions and company circulars; and
• Confirmation of the share capitalization of the company on a quarterly basis.

The Investment Committee will typically seek to meet quarterly to review the financial and operating status of
each portfolio company.

The Team will also measure the performance of each portfolio company against certain forecast metrics,
identify sources and reasons for any variance, and develop future strategies for the portfolio company. The
estimated value of each portfolio company will also be updated, and hold/divest decisions will be confirmed
based on all available information, taking into account potential future incremental growth in value, industry or
business specific risks and financial market conditions.

Exit

Prior to making any investment, the Fund will generally have clear and realistic exit options.

Divestment through trade sales is a well-established methodology in China. Most strategic buyers
concentrate on acquisition opportunities with strong brands, a well-developed distribution network, a
substantial customer database and China-relevant intellectual property.

The Team has broad experience in achieving liquidity for investors by using a variety of exit solutions,
including trade sales, initial public offerings and secondary offerings in international markets.

The Team understands the motivations of potential buyers and, for portfolio companies with planned exits
through trade sales, a substantial amount of time will be devoted to building assets and capabilities most
attractive to a potential strategic buyer.

The Team also has experience with exit strategies that involve listing on an international stock exchange, a
well-established practice in China. The Team understands the motivations of fund managers, brokers and
research analysts in China. For portfolio companies with planned exits through listing on an international
stock exchange, the Fund expects to spend a substantial amount of time building investor relations
capabilities in order to adequately communicate to the international investment community.

Should the Team decide to recommend a divestment, a “Divestment Recommendation” will be prepared and
distributed to the Investment Committee. The Divestment Recommendation will explain the rationale for
seeking such divestment, will review the detailed terms and conditions of the proposed exit and will analyze
the proposed exit valuation in comparison with the company’s estimated value.

- 26 -
8. SUMMARY OF PRINCIPAL TERMS
The following is not a complete summary of the terms of the Fund. This summary is qualified in its entirety
by, and must be read in conjunction with, the Amended and Restated Agreement of Limited Partnership of
the Fund (the “Partnership Agreement”) and related documentation.

Fund: Capital Today China Growth Fund, L.P., a Cayman Islands exempted
limited partnership (the “Fund”).

Investment Objective: The investment objective of the Fund is to make direct equity and
equity-related investments in companies based in China.

General Partner: The general partner of the Fund will be Capital Today China Growth
GenPar, Ltd., a newly formed Cayman Islands exempted company
(the “General Partner”). The principals (separately or together, the
“Principals”) of the General Partner will be Kathy Xu, Alex Yu, Kelvin
Yu and Linda Lee. Two other Principals will join the General Partner
by December 2005. The General Partner will make all investment
decisions on behalf of the Fund.

Manager: The manager of the Fund will be Capital Today China Growth
Management, Ltd., a newly formed Cayman Islands exempted
company (the “Manager”). The Manager will be responsible for
evaluating and monitoring Fund investments and providing day-to-day
managerial and administrative services to the Fund.

Committed Capital: The Fund is seeking capital commitments (“Commitments”) from

investors totaling up to $200 million. The General Partner retains the
right to accept Commitments less than or in excess of $200 million.

Minimum Limited The minimum Commitment to the Fund by a limited partner (a “Limited
Partner Commitment: Partner” and together with the General Partner, the “Partners”) will be
$10 million, although the General Partner reserves the right to waive
this requirement in its sole discretion.

Capital Commitment of The General Partner and related persons will invest an aggregate of
General Partner: $3 million or at least 1% of the aggregate Commitments, whichever is
greater, including an investment in the General Partner, which
amounts will be invested pro rata with the Limited Partners in all
investments.

Closings: The General Partner may choose to establish the Fund at any time
(the “Initial Closing”). The General Partner expects to establish the
Fund with an Initial Closing as soon as practicable. From time to time
after the Initial Closing, but not more than 12 months thereafter, one
or more additional closings may be held as necessary to
accommodate the admission of additional limited partners.

Limited Partners admitted to the Fund after the Initial Closing will,
upon admission, be required to contribute to the Fund an amount
equal to (a) their proportionate share of all drawn Commitments of
Partners admitted in prior closings (including sums drawn to pay
Management Fees, as described in “Management Fee” below), plus
an amount equal to interest thereon at the prime rate plus 2% from
the date of each applicable funding, less (b) their proportionate share
of all distributions made to Partners admitted in prior closings. Such
amounts to the extent attributable to investments will be paid to the

- 27 -
 existing Partners pro rata according to their respective capital
contributions to the Fund and, other than the interest component,
restored to their unfunded Commitment and will be available for
reinvestment. For this purpose, investments will be valued at cost,
unless the General Partner, in its sole discretion, determines that
there has been a material change or significant event relating
specifically to a portfolio company that would justify a different
valuation.

Term: The term of the Fund will be through the eighth anniversary of the
Initial Closing, with the option of up to two one-year extensions by the
General Partner in its discretion.

Commitment Period: Investments may be made by the Fund through the fifth anniversary of
the Initial Closing (the “Commitment Period”). As of such date, all
Partners will be released from any further obligation with respect to
their remaining Commitments, except to the extent necessary to:
(i) cover the expenditures of the Fund, including Management Fees
and indemnification obligations; (ii) complete Fund investments that
are in process as of the end of the Commitment Period; and (iii) make
Follow-On Investments (as defined below).

Drawdowns: Commitments will be drawn down pro rata based on original

Commitments on an as-needed basis to fund investments and pay
Fund expenses, with a minimum of 10 days’ prior notice to the Limited
Partners. Such contributions will represent each Partner’s “Capital
Contributions.” The Fund may from time to time draw down up to 5%
of the aggregate Commitments to be held in reserve to make
investments that require funding in advance of the end of the 10-day
drawdown period.

ERISA investors will not be required to fund their capital contributions

to the Fund until the closing date of the first investment, although such
investors will be required to make payments to the General Partner or
the Manager for organizational expenses and the Management Fee
prior to such date.

Distributions: Net proceeds attributable to the disposition of an investment in a

portfolio company, together with any dividends or interest income with
respect to such investment, will be distributed to the Partners
participating in such investment in the following amounts and order:

(a) Return of Capital and Preferred Return: first, 100% to the

Partners until such Partner has received, on a cumulative
basis, taking into account all prior distributions made pursuant
to this clause (a), an amount equal to (i) such Partner’s
Capital Contributions to the Fund plus (ii) an 8% cumulative
compounded annual rate of return on the unreturned portion
of such Partner’s aggregate Capital Contributions;

(b) General Partner Catch-Up: second, 100% to the General

Partner until such time as the General Partner has received
20% of the sum of the distributed preferred return made
under paragraph (a)(ii) above and this paragraph (b); and

- 28 -

Allocation of Profits and Losses:
Key Person Event:
General Partner Clawback:
(c) 80/20 Split: thereafter, 80% to the Limited Partners and 20%
to the General Partner.
Distributions made to the General Partner pursuant to clauses (b) and
(c) are referred to below as “Carried Interest Distributions.”
Notwithstanding the foregoing priority of distributions, the General
Partner may, but shall not be obligated to, cause tax distributions to
be made to the Partners from time to time in amounts not to exceed,
when combined with all other such distributions to the Partners in the
then current and all preceding taxable periods, the hypothetical taxes
payable with respect to the taxable income or gain allocated to the
Partners for the then current and all preceding taxable periods, less
the aggregate taxable loss allocated to the Partners for all preceding
taxable periods.
Distributions prior to the dissolution of the Fund may only take the
form of cash or marketable securities, unless approved by the
Advisory Board (as defined below). Marketable securities will be
valued at the average of each particular security’s closing prices
during the 10 days prior to the date of distribution. Upon dissolution of
the Fund, distributions may also include restricted securities or other
assets of the Fund for which the General Partner will seek a valuation
from an independent investment banking firm or other appropriate
independent expert. All distributions will be subject to appropriate
reserves for Fund expenses and contingent liabilities.
The Fund will establish and maintain a capital account for each
Partner, and distributions upon liquidation of the Fund will be made in
accordance with the Partners’ respective capital account balances.
All items of income, gain, loss and deduction will be allocated to the
Partners’ capital accounts in a manner generally consistent with the
distribution procedures outlined under “Distributions” above.
The Fund’s investment activities will be led by Kathy Xu. If Kathy Xu
ceases to be a Principal, upon the affirmative vote of 66-2/3% in
interest of the Limited Partners, the Commitment Period will be
suspended until such time as one or more individuals have been
appointed to replace Kathy Xu who are acceptable to a majority of the
voting members of the Advisory Board. If no replacement acceptable
to the Advisory Board is appointed within 120 days after the vote of
the Limited Partners to suspend the Commitment Period, then the
Commitment Period shall be deemed to be automatically terminated
as of the expiration of such 120-day period.
Upon final liquidation of the Fund and distribution of its remaining
assets, the General Partner will be required to restore funds to the
Fund for distribution to the Limited Partners to the extent, if any, that
amounts previously distributed to the General Partner as its Carried
Interest Distributions exceed the aggregate amount due the General
Partner as its Carried Interest Distributions on a cumulative basis over
the life of the Fund. To the extent that the assets of the General
Partner are insufficient to satisfy such obligations, the members of the
General Partner will be severally (but not jointly) liable for such
insufficiency pro rata to their interests in the General Partner.
- 29 -
Reinvestment:
Follow-On Investments:
Management Fee:
Transaction Fees:
Organizational and Offering
Expenses:
During the Commitment Period, the Fund may retain or recall for
reinvestment the invested capital portion of any proceeds received by
the Fund from the sale, refinancing or recapitalization of any
investment that is realized within 18 months after the investment was
originally made.
After the Commitment Period has expired, the Fund may make
investments to preserve, protect or enhance the value of existing
investments (“Follow-On Investments”); provided, that, such
investments will not exceed the lesser of (i) the aggregate amount of
unfunded Commitments as of the end of the Commitment Period and
(ii) 15% of Commitments.
The Fund will pay a management fee (the “Management Fee”) to the
Manager in advance on a semi-annual basis, as follows:
Committed Capital: During the Commitment Period, 2.0% of
aggregate Commitments.
Actively Invested Capital: After the Commitment Period, 2.0% of
aggregate Capital Contributions to investments that have not
been disposed of (reduced by any investments that have been
written down or written off).
The Management Fee may be paid out of current income and
disposition proceeds of the Fund and, to the extent necessary, from
drawdowns which will reduce Commitments. Any amount drawn
down from Commitments to pay the Management Fee may, to the
extent Limited Partners receive subsequent distributions, be added to
the unfunded Commitments and be subject to recall.
Limited Partners admitted after the Initial Closing will contribute to the
Fund, and the Fund will pay to the Manager, an amount equal to the
additional Management Fee that would have been paid had such
Limited Partners been admitted to the Fund at the Initial Closing, plus
an amount equal to interest thereon at the prime rate plus 2% from
the date of the Initial Closing.
In connection with the investments of the Fund, various “transaction
fees” may be paid to the Manager by the portfolio company or other
third parties. Such fees may be retained in full by the Manager,
provided that an amount equal to 80% of all such net fees paid to the
Manager will reduce the Management Fee payable, on an aggregate
basis. “Transaction fees” include any fees received in connection with
the consummation, disposition or termination of an investment
attributable to the Fund and/or any fees received from a portfolio
company, such as commitment fees, break-up fees, portfolio company
management fees, directors’ fees, monitoring fees, advisory fees and
other similar fees.
The Fund will bear all reasonable legal and other organizational and
offering expenses incurred in the formation of the Fund and related
entities up to an amount not to exceed $1,000,000 (“Organizational
and Offering Expenses”). All fees and expenses due to placement
agents will not be subject to the limitation set forth above, but will
reduce the Management Fee otherwise payable by the Limited
- 30 -
 Partners by an identical amount.

Any amount drawn down from Commitments to pay Organizational

and Offering Expenses may, to the extent Limited Partners receive
subsequent distributions, be added to the unfunded Commitments
and be subject to recall.

Other Expenses: The General Partner and the Manager will pay all of their respective
ordinary administrative and overhead expenses in managing Fund
investments, including salaries, benefits and rent.

The Fund will pay all other expenses attributable to the activities of
the Fund including, without limitation: (i) expenses incurred in
connection with the evaluation, acquisition or disposition of
investments; (ii) expenses incurred in connection with the carrying or
management of investments, including custodial, trustee, record
keeping and other administration fees; (iii) expenses incurred in
connection with the Fund’s financial statements, tax returns and K-1’s;
(iv) attorneys’ and accountants’ fees and disbursements; (v) taxes
and other governmental charges levied against the Fund;
(vi) insurance, regulatory or litigation expenses (and damages),
including regulatory expenses of the General Partner and the
Manager; (vii) expenses incurred in connection with the winding up or
liquidation of the Fund; (viii) expenses relating to defaults by Partners
in the payment of any capital contributions; (ix) out-of-pocket
expenses for transactions not consummated; (x) expenses incurred in
connection with any restructuring or amendments to the constituent
documents of the Fund and related entities, including the General
Partner and the Manager; (xi) expenses incurred in connection with
the formation of alternative investment vehicles to the extent permitted
under the Partnership Agreement; and (xii) expenses incurred in
connection with distributions to the Partners and in connection with
any meetings with Partners called by the General Partner.

Investment Limitations: Without the consent of the Advisory Board, (i) no more than 20% of
the Commitments of the Fund will be invested in any one portfolio
company, and (ii) no more than 20% of the Commitments of the Fund
will be invested in early stage companies.

Bridge Financing: The Fund may provide interim financing (“Bridge Financing”) to
facilitate an investment organized by the Fund. Bridge Financing to a
particular portfolio company may not exceed the amount of unfunded
Commitments, and must be at a level that, when added to the amount
of the permanent investment by the Fund in such portfolio company,
will not exceed 35% of the aggregate Commitments. The amount of
any drawdown of Commitments for a Bridge Financing will reduce the
outstanding amount of unfunded Commitments by an equal amount;
provided, however, that the amount of the principal portion of the
proceeds distributed to Partners from the refinancing of any Bridge
Financing within 12 months following the date of the closing of such
Bridge Financing will be restored to the Partners’ unfunded
Commitments. During such 12-month period, a Bridge Financing will
be treated as a short–term investment and will not be subject to the
preferred return or Carried Interest Distributions described in
“Distributions” above. A Bridge Financing not refinanced or otherwise
repaid within 12 months will be treated as a permanent investment in
the portfolio company. Accordingly, after such 12-month period,

- 31 -

Management Co-Investment
Program:
Co-Investment Opportunities:
Advisory Board:
Reports:
Other Investment Funds:
Right of First Offer:
interest earned will not be treated as a short-term income, and the
Bridge Financing will be subject to the preferred return and Carried
Interest Distributions described in “Distributions” above.
Annual co-investment vehicles will be formed by the Principals and
other investment professionals of the Manager, which will co-invest
with the Fund in all investments made in the relevant year on the
same economic terms.
The General Partner may provide co-investment opportunities to any
Limited Partner with a Commitment in excess of $20 million.
An Advisory Board (the “Advisory Board”) will be established
consisting of a minimum of three representatives of Limited Partners
who are selected by the General Partner; provided, that, no affiliate of
the General Partner will be entitled to appoint a representative to the
Advisory Board. The Advisory Board will meet at least three times per
year, and as requested by the General Partner, to (i) review any
matters involving a potential conflict of interest and (ii) discuss such
other matters as may be raised by the General Partner.
The Fund will furnish audited financial statements annually to all
Limited Partners. On a quarterly basis, each Limited Partner will be
furnished with unaudited financial statements of the Fund. In addition,
each Limited Partner will be provided with the tax information
necessary to complete any applicable tax returns.
Unless consented to by 66-2/3% in interest of the Limited Partners,
the General Partner, the Manager and the Principals will not act as
the manager or the primary source of transactions on behalf of
another pooled investment fund with overall investment parameters
substantially similar to those of the Fund, until the earlier of (a) the
end of the Commitment Period or (b) such time as the Fund is 75%
invested or committed to be invested (including a reserve for fees,
expenses and Follow-On Investments).
Through the end of the Commitment Period, any investment
opportunity suitable for the Fund that is presented to the General
Partner, the Manager or the Principals will be offered to the Fund,
except for: (i) investment opportunities related to current portfolio
holdings of the General Partner, the Manager or the Principals;
(ii) investment opportunities anticipated to require less than $1 million
of equity investment; (iii) investment opportunities required to be
presented to any other investment fund permitted to be organized by
the Principals or their affiliates under the Partnership Agreement;
(iv) investments that may, in the reasonable belief of the General
Partner, cause the Fund to fail to qualify as a “venture capital”
operating company under ERISA; (v) investments intended to protect
or enhance the value of investments included in paragraphs
(i) through (iv) above; (vi) investment opportunities presented to the
investment professionals of the Fund in their capacity as directors of
public or private companies and in similar circumstances where pre-
existing fiduciary duties apply; and (vii) any other investment
opportunity that, upon the prior approval of the Advisory Board, is not
required to be offered to the Fund.
- 32 -
Parallel Partnerships/Feeder
Funds:
Alternative Investment Vehicles:
Tax-Exempt Investors:
Excuse and Exclusion:
ERISA:
One or more parallel partnerships (the “Parallel Partnerships”) may be
organized by the General Partner for legal, regulatory, tax or other
reasons. The Parallel Partnerships will invest on a pro rata basis in all
Fund transactions. In addition, the General Partner may organize one
or more special purpose offshore investment vehicles for investment
by certain investors (the “Feeder Funds”). The Feeder Funds will be
Limited Partners of the Fund and have no other activities.
In connection with any investment, the General Partner will have the
right to direct the capital contributions of some or all of the Partners to
be effected through one or more alternative investment vehicles if, in
the determination of the General Partner, the use of such vehicles
would allow the Fund to overcome legal and regulatory constraints, be
more tax efficient and/or facilitate participation in certain types of
investments. Any such vehicles will contain terms and conditions
generally comparable to those of the Fund and will be managed by
the Manager or an affiliate thereof. The profits and losses of such
vehicles may not, however, be aggregated with those of the Fund for
purposes of determining distributions by either the Fund or such
vehicles.
The Fund does not expect to generate material amounts of either
“unrelated business taxable income” (“UBTI”) or “unrelated debt-
financed income” (“UDFI”), except (i) in transactions in which it
creates one or more alternative investment vehicles for Partners that
would be affected by UBTI or UDFI and (ii) or with respect to the
Management Fee offset as described under “Transaction Fees.”
Limited Partners will not be obligated to contribute capital toward any
investment if the making of such investment, in the opinion of counsel
satisfactory to the General Partner, would be illegal or is otherwise
prohibited by statute or regulation for such Limited Partners. Limited
Partners may be excluded from an investment if the General Partner
determines that participation in such investment is reasonably likely to
violate any regulatory requirements or have financial, legal or other
material adverse effects on the Fund, any Partner or any portfolio
company. The Commitment of an excused or excluded Limited
Partner will not be reduced as a result of any excuse or exclusion.
The General Partner may make additional capital calls to replace the
capital contributions not made by any excused or excluded Limited
Partners, but Limited Partners will not be required to fund amounts in
excess of their unfunded Commitments.
Investment in the Fund is generally open to institutions including
pension and other funds subject to ERISA. The Fund may require
certain representations or assurances from investors to determine
compliance with applicable provisions of ERISA. The General Partner
intends to operate the Fund such that the assets of the Fund will not
be considered “plan assets” under ERISA.
- 33 -
Tax Considerations: The Fund will be treated as a partnership, and not an association
taxable as a corporation, for U.S. federal income tax purposes. As
such, the Fund will not be subject to federal income tax, and each
Partner will be required to include in computing its federal income tax
liability its allocable share of the items of income, gain, loss and
deduction of the Fund, regardless of any distributions by the Fund to
that Partner.

EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT ITS

OWN TAX ADVISOR AS TO THE INCOME TAX CONSEQUENCES
OF AN INVESTMENT IN THE FUND.

Liability of Partners—LP Except as required by applicable law, no Limited Partner shall be

Clawback Payments: required to repay to the Fund, any Partner or any creditor of the Fund
all or any part of the distributions made to such Limited Partner;
provided, that, the General Partner may require a Limited Partner
(including any former Limited Partner) to return distributions made to
such Limited Partner or former Limited Partner for the purpose of
meeting such Limited Partner’s pro rata share of Fund expenses and
indemnification obligations. Any such payment made by a Limited
Partner shall be treated as a contribution of capital to the Fund.

Indemnification: The General Partner, the Manager and their respective affiliates,
stockholders, members, partners, officers, directors, employees,
agents and any other person who serves at the request of the General
Partner on behalf of the Fund as an Advisory Board member or as an
officer, director, member, employee or agent of any other entity (in
each case, an “Indemnitee”) will not be liable to the Fund or to the
Limited Partners for (i) any act performed or omission made by it in
the absence of its own fraud, willful misconduct or gross negligence,
or (ii) losses due to the negligence of brokers or other agents of the
Fund. The Fund will indemnify each Indemnitee for any loss, damage
or expense incurred by such Indemnitee on behalf of the Fund or in
furtherance of the interest of the Partners or otherwise arising out of
or in connection with the Fund or the business of the Fund, except for
losses arising from such Indemnitee’s own fraud, willful misconduct or
gross negligence. Limited Partners will not be individually obligated
with respect to such indemnification beyond their respective
Commitments and the amount of distributions by the Fund to Limited
Partners described under “Liability of Partners—LP Clawback
Payments” above. The Fund may purchase, at the Fund’s expense,
insurance to cover the Manager or any other Indemnitee against
liability for any breach or alleged breach of their fiduciary or similar
responsibilities.

Transfer of Interests and A Limited Partner may not sell, assign or transfer any interest in the
Withdrawal: Fund without the prior written consent of the General Partner. No
Limited Partner may withdraw from the Fund. The General Partner
may, however, require the withdrawal of, or the transfer of the interest
of, a Limited Partner in the Fund upon at least 20 days’ prior written
notice if the General Partner determines that the continued
participation of such Limited Partner in the Fund may adversely affect
the Fund. In addition, under certain circumstances, the General
Partner may permit or require the withdrawal of, or the transfer of the
interests of, Limited Partners that are employee benefit plans, or may
take certain other actions, in order to prevent the assets of the Fund

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 from being considered “plan assets” under ERISA.

Defaults: Limited Partners will be obligated to make Capital Contributions when

called by the General Partner. In addition to all legal remedies
available to the Fund, failure by a Limited Partner to make Capital
Contributions when due will result in such Limited Partner being
assessed an immediate 50% reduction of its capital account and
foregoing any gains arising after its default that relate to any
investment in which such Partner made a capital contribution prior to
such default. A defaulting Limited Partner will also remain liable to
pay its pro rata share of the Management Fee.

Amendments: The Partnership Agreement will provide that it may be amended, and
waivers thereunder may be given, by a vote of Partners representing
not less than a majority of the aggregate Commitments, except that
no such amendment or waiver may among other things change
certain monetary terms or the term of the Fund without the consent of
each affected Limited Partner. In addition, the General Partner may
also amend the Partnership Agreement without the approval or
consent of any of the Limited Partners if such amendment is not
adverse to the Limited Partners.

U.S. Legal Counsel: Paul, Weiss, Rifkind, Wharton & Garrison LLP

Cayman Islands Legal Counsel: Walkers

Auditors: PriceWaterhouse Coopers

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9. CERTAIN INVESTMENT CONSIDERATIONS
An investment in the Fund entails a significant 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. Prospective
purchasers of interests in the Fund should carefully consider the following factors in connection with a
purchase of Interests in the Fund. The following list is not a complete list of all risks involved in connection
with an investment in the Fund. There can be no assurance that the Fund will be able to achieve its
investment objective or that the Partners will receive a return on their capital, and investment results may vary
substantially on a quarterly or annual basis.

Risk Factors Relating to China

The Fund will be a Cayman Islands exempted limited partnership and will invest in portfolio companies based
in China. Investments in China involve a broad range of political, economic, legal and financial risks. Many of
these risks are not quantifiable or predictable and are not typically associated with investments in securities of
companies in economies that have developed and been regulated over a long period.

Economic and Political Risks

Adverse changes in economic and political policies of the PRC government could have a material adverse
effect on the overall economic growth of China, which could have a material adverse effect on economic
performance of the Fund’s portfolio companies. China’s economy is unique among developed countries with
respect to the amount and nature of government involvement, level of development, growth rate, control of
foreign exchange and allocation of resources.

While China’s economy has experienced significant growth in the past two decades, this growth has been
uneven across different regions and among various economic sectors and may not be sustainable. While the
PRC government has implemented various measures to encourage economic development (including but not
limited to the allocation of resources), some of these initiatives may have a negative effect on the Fund’s
portfolio companies. Further, a slowdown in the economies of the United States, the European Union and
certain Asian countries may adversely affect economic growth in China, which depends on exports to those
countries. The economic performance of the Fund’s portfolio companies could be adversely affected by an
economic downturn in China.

The PRC economy has historically been a planned economy. The majority of productive assets in China are
still owned by various levels of the PRC government. Although there has been a movement towards
economic reform, emphasizing decentralization, the development of the private sector, greater management
autonomy within public sector enterprises, access to international capital markets, and the role of competition
and market forces in economic development, there is no assurance that such reform measures will prove
successful or will prove beneficial to the Fund’s portfolio companies. Further, there can be no assurance that
such movement towards reform will continue. Action by the PRC government could have a significant
adverse effect on market prices of securities and payment of dividends.

The Fund’s portfolio companies in China could be adversely affected by the effects of Severe Acute
Respiratory Syndrome (“SARS”) or another epidemic or outbreak. China reported a number of cases of SARS
in April 2004. Any prolonged recurrence of SARS or other adverse public health developments in China may
have a material adverse effect on the business operations of the Fund’s portfolio companies.

Emerging Market Risk

The Fund intends to make investments in companies based in China. Investing in companies based in China
involves certain considerations not usually associated with investing in companies located in developed
countries, including political and economic considerations, such as greater risks of expropriation,
nationalization and general social, political and economic instability; the small size of the securities markets in
the PRC and the low volume of trading, resulting in potential lack of liquidity and in price volatility; fluctuations
in the rate of exchange between currencies and costs associated with currency conversion; inconsistencies

- 36 -
among local, provincial and national laws; and certain government policies that may restrict the Fund’s
investment opportunities. The Fund may face difficult registration procedures when making or disposing of
investments, and, as a foreigner, may be subject to legal or regulatory constraints or prejudices that do not
affect local investors. In addition, the reporting standards, practices and disclosure requirements in China is
not equivalent to those in the United States and certain Western European countries and may differ in
fundamental ways. Accordingly, less information may be available to investors. Investments in China could
be affected by other factors not present in more developed countries, including lack of uniform accounting,
auditing and financial reporting standards, inadequate settlement procedures and potential difficulties in
enforcing contractual obligations.

Legal and Regulatory Interpretation and Enforcement

Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded various
forms of foreign investments in China. However, China has not developed a fully integrated legal system and
recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China.
In particular, because these laws and regulations are relatively new, and because of the limited volume of
published decisions and their nonbinding nature, the interpretation and enforcement of these laws and
regulations involve uncertainties. In addition, the PRC legal system is based in part on government policies
and internal rules (some of which are not published on a timely basis or at all) that may have a retroactive
effect. As a result, the Fund or a portfolio company may not be aware of any violation of these policies and
rules until some time after the violation. The PRC government has broad discretion in dealing with violations
of laws and regulations, including levying fines, revoking business and other licenses and requiring actions
necessary for compliance. In particular, licenses and permits issued or granted to portfolio companies by
relevant governmental bodies may be revoked at a later time by higher regulatory bodies. Neither the
General Partner nor the Manager can predict the effect of the interpretation of existing or new PRC laws or
regulations on the businesses of the Fund’s portfolio companies.

The legal system in China has inherent uncertainties that may limit legal protections to the Fund, the General
Partner or the Manager in the event of any claims or disputes with third parties. Because the legal system in
China is a civil law system based on written statutes, prior court decisions may be cited for reference, but
have limited precedential value. Therefore, the application of these laws and regulations is not always
uniform and their interpretation and enforcement is uncertain. These uncertainties may limit the legal
protections available to foreign investors and entities and other legal protections to the Fund or its portfolio
companies. In addition, any litigation in China may be protracted and result in substantial costs and diversion
of resources, as well as the attention of the General Partner, the Manager and the Principals.

Due Diligence

The Fund will invest in companies based in China where market and financial information is limited. Formal
business plans, financial projections and market analyses may not be available. Public information on
potential portfolio companies may be difficult to obtain or verify. In addition, the Fund may find it cost-
prohibitive to obtain certain information that would be easily obtainable in more developed countries. While
the Fund will endeavor to conduct appropriate due diligence on each portfolio company, no assurance can be
given that it will obtain the information or assurances that an investor in a more sophisticated economy would
generally expect to obtain before committing to an investment.

Currency Risk

The Fund’s assets will be invested in securities denominated in Renminbi (“RMB”), whereas the books of the
Fund will be maintained in, and capital contributions to and distributions from the Fund will be made in,
Dollars. Accordingly, the value of the Fund’s portfolio may be significantly affected by changes in the value of
RMB against the Dollar. The exchange rates may be adversely affected by balance of payments and other
economic and financial conditions, government intervention, speculation and other factors. There can be no
assurance that the PRC regulatory authorities will not impose more stringent restrictions on the convertibility
of RMB with respect to foreign exchange transactions than is currently in effect. As a general policy, the Fund
does not intend to hedge against currency exchange risk. In addition, the Fund will incur costs in converting
investment proceeds from one currency to another.

- 37 -
The value of the RMB against the Dollar and other currencies may fluctuate and is affected by, among other
things, changes in political and economic conditions. On July 21, 2005, the PRC government changed its
decade-old policy of pegging the value of the RMB to the Dollar. Under the new policy, the RMB is permitted
to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in
policy has resulted in an approximately 2% appreciation of the RMB against the Dollar. While the
international reaction to the RMB revaluation has generally been positive, there remains significant
international pressure on the PRC government to adopt an even more flexible currency policy, which could
result in a further and more significant appreciation of the RMB against the Dollar. Any significant revaluation
of the RMB may materially and adversely affect the cash flows, revenues, earnings and financial position, and
the value of, the Fund’s China-based portfolio companies.

Foreign Investment Restrictions on PRC Residents

Regulations were recently promulgated by State Development and Reform Commission and the State
Administration of Foreign Exchange that require registration with, and approval from, PRC government
authorities in connection with direct or indirect offshore investment activities by individuals who are PRC residents
and PRC corporate entities. These regulations may affect the structuring of the Fund’s investments. If an
offshore holding company structure is used by the Fund for a particular investment, the Fund will require any
shareholders of such holding company who are considered PRC residents to make such application and filings
as required under these regulations and under any implementing rules or approval practices that may be
established under these regulations. However, because these regulations are relatively new and lack
implementing rules or reconciliation with other approval requirements, it remains uncertain how these
regulations, and any future legislation concerning offshore or cross-border transactions, will be interpreted and
implemented by the relevant government authorities.

Privatizations

The Fund may invest in state-owned enterprises that have been or will be transferred from government to
private ownership. It is impossible to predict whether any further privatizations will take place or what terms
or effects of such privatizations may be. There can be no assurance that any privatizations will be undertaken
or, if undertaken, that such plans will be successfully completed. There can also be no assurance that, if a
privatization is undertaken on a private placement basis, the Fund will have the opportunity to participate in
the investing consortium. Investors should be aware that changes in economic factors could result in a
change in China’s policies on privatization. Should these policies change in the future, it is possible that the
PRC government may determine to return projects and companies to state ownership. In such a situation,
the level of compensation that would be provided to the owners of the private companies concerned cannot
be accurately predicted but could be substantially less than the amount invested in such companies.

Risk Factors Relating to an Investment in the Fund

Nature of Fund Investments

A substantial portion of the Fund’s investments will be in equity or equity-related investments which by their
nature involve business, financial, market and/or legal risks. While such investments offer the opportunity for
significant capital gains, they also involve a high degree of risk that can result in substantial losses. There
can be no assurance that the Manager will correctly evaluate the nature and magnitude of the various factors
that could affect the value of such investments. Prices of the investments may be volatile, and a variety of
other factors that are inherently difficult to predict, such as domestic or international economic and political
developments, may significantly affect the results of the Fund’s activities. As a result, the Fund’s performance
over a particular period may not necessarily be indicative of the results that may be expected in future
periods.

The Fund’s investments may involve leveraged acquisitions which, by their nature, require companies to
undertake a high ratio of fixed charges to available income. Such investments are inherently more sensitive
to declines in revenues and to increases in expenses. Utilization of leverage is a speculative investment
technique and involves risks to investors. The leverage provided to the Fund will result in interest expense
and other costs incurred in connection with such borrowings, which may not be covered by the net interest

- 38 -
income, dividends and appreciation of the securities purchased. While leverage may enhance total returns to
the Partners, if investment results fail to cover borrowing costs, then returns to the Partners will be lower than
if there had been no borrowings. The Limited Partners will not be personally liable for the Fund’s obligations
under any borrowing arrangements.

The Fund may make minority equity investments in companies. Such companies may have economic or
business interests or goals that are inconsistent with those of the Fund, and the Fund may not be in a position
to limit or otherwise protect the value of its investment in the companies, although as a condition of making
such investments, it is expected that appropriate shareholder rights generally will be sought to protect the
Fund’s investments. The Fund’s control over the investment policies of the companies may also be limited.

The Fund may co-invest in a company with financial, strategic or other third-party investors. Such
investments will involve additional risks not present in investments where a third party is not involved,
including the possibility that the co-investor may have interests or objectives that are inconsistent with those
of the Fund or may be in a position to take action contrary to the Fund’s investment objectives. In addition,
the Fund may in certain circumstances be liable for actions of its third party co-venturers or partners.

Most of the Fund’s investments are expected to involve private securities. In connection with an investment in
private securities, the Fund may assume, or acquire, a portfolio company subject to contingent liabilities.
These liabilities may be material and may include liabilities associated with pending litigation, regulatory
investigations or environmental actions, among other things. To the extent these liabilities are realized, they
may materially adversely affect the value of a portfolio company. In connection with the disposition of an
investment in private securities, the Fund may be required to make representations about the business and
financial affairs of the company typical of those made in connection with the sale of a business. The Fund will
seek to structure its investments so that special purpose vehicles will make the investment in a portfolio
company, which vehicles, and not the Fund, will be liable to the extent that any representations regarding a
portfolio company turn out to be inaccurate.

Difficulty of Locating Suitable Investments

A purchaser of an Interest must rely upon the ability of the General Partner and the Manager to identify,
structure and implement investments consistent with the Fund’s investment objectives and policies. There
can be no assurance that there will be a sufficient number of suitable investment opportunities to enable the
Fund to invest all of its committed capital in opportunities that satisfy the Fund’s investment objectives, or that
such investment opportunities will lead to completed investments by the Fund. Identification of attractive
investment opportunities is difficult and involves a high degree of uncertainty. The Fund will compete for the
acquisition of investments with many other investors, some of which will have greater resources than the
Fund. Such competitors may include other private investment funds, as well as individuals, financial
institutions and other institutional and strategic investors.

Expedited Transactions

Investment analyses and decisions by the General Partner and the Manager may be undertaken on an
expedited basis in order for the Fund to take advantage of available investment opportunities. In such cases,
the information available to the General Partner and the Manager at the time of an investment decision may
be limited, and the General Partner and the Manager may not have access to the detailed information
necessary for a full evaluation of the investment opportunity. Further, the Fund may conduct its due diligence
activities in a very brief period and may assume the risks of obtaining certain consents or waivers under
contractual obligations. While the General Partner expects to negotiate purchase price adjustments,
termination rights and other protections, such rights may not be available or, if available, the General Partner
may elect not to exercise them.

Bridge Financing

From time to time, the Fund may provide Bridge Financing to facilitate an investment organized by the Fund.
Bridge Financings to a particular portfolio company may not exceed the amount of unfunded Commitments,
and must be at a level that, when added to the amount of the permanent investment by the Fund in such

- 39 -
portfolio company, will not exceed 35% of the aggregate Commitments. Such Bridge Financings, if not
repaid, 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 be issued 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.

Follow-On Investments

The Fund may be called upon to provide follow-up funding for its portfolio companies or have the opportunity
to increase its investment in such portfolio company. See Section 8: Summary of Principal Terms—Follow-
On Investments. There can be no assurance that the Fund will wish to make Follow-On Investments or that
the Fund will have sufficient funds to do so. Any decision by the Fund not to make Follow-On Investments or
its inability to make them may have a substantial negative impact on a portfolio company in need of such an
investment or may diminish the Fund’s ability to influence the portfolio company’s future development.

Distributions

There can be no assurance that the operations of the Fund will be profitable or that cash from its investments
will be available for distribution to the Partners. The Fund will have no source of funds from which to pay
distributions to the Partners, other than income and gain received on its investments and the return of capital.

Reliance on General Partner and Principals; Newly Formed Organization

Decisions with respect to the management of the Fund will be made by the General Partner and the Manager.
The success of the Fund will depend on the ability of the General Partner and the Manager to identify and
consummate suitable investments, to improve the operating performance of portfolio companies and to
dispose of investments of the Fund at a profit. The General Partner and the Manager are newly formed
entities. Moreover, the Fund is a newly organized entity and has no prior operating history or track record.
However, the members of the Team, prior to the formation of Capital Today and the Fund, worked together
with other investment professionals at Baring Private Equity Asia Limited.

Dependence on Key Personnel

The success of the Fund will be highly dependent on the financial and managerial expertise of the Principals.
The loss of one or more of these individuals could have a material adverse effect on the performance of the
Fund. The Principals are under no contractual obligation to remain with the Manager for all or any portion of
the term of the Fund. Although the Principals will commit a significant amount of their business efforts to the
Manager, the Principals are not required to devote all of their time to the Fund’s affairs. See Potential
Conflicts of Interest below.

Portfolio Concentration

Although no more than 20% (or, temporarily in connection with a Bridge Financing, 35%) of the Commitments
of the Fund will be invested in any one portfolio company, the Fund’s portfolio may include a small number of
large positions. While this portfolio concentration may enhance total returns to the Partners, if any large
position has a material loss, then returns to the Partners may be lower than if they had invested in a well
diversified portfolio.

Relation to Other Investment Results

The past performance of the Principals or any other person described herein are provided for illustrative
purposes only and are not indicative of the Fund’s future investment results. The nature of, and risks
associated with, the Fund’s future investments may differ substantially from those investments and strategies
undertaken historically by any other person described herein. There can be no assurance that the Fund’s
investments will perform as well as those of the Principals or any other person described herein or that the
Fund will be able to avoid losses.

- 40 -
Forward-looking Statements

This Memorandum contains targeted returns and forward-looking statements. These targeted returns and
forward-looking statements reflect the Fund’s views with respect to future events. Actual returns and results
could differ materially from those in the targeted returns and forward-looking statements as a result of factors
beyond the Fund’s control. Investors are cautioned not to place undue reliance on such returns and
statements.

Defaults by Limited Partners

If a Limited Partner fails to pay installments of its Commitment to the Fund when due, and the contributions
made by non-defaulting Limited 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 adversely affect the returns to the Limited Partners
(including non-defaulting Limited Partners). The consequences of defaulting on a capital call are material and
adverse to the defaulting Limited Partner. In addition to all legal remedies available to the Fund, failure by a
Limited Partner to make Capital Contributions when due will result in such Limited Partner being assessed an
immediate 50% reduction of its capital account and foregoing any gains arising after its default that relate to
any investment in which such Limited Partner made a capital contribution prior to such default. A defaulting
Limited Partner shall also remain liable to pay its pro rata share of the Management Fee.

Dilutions from Subsequent Closings

Limited Partners subscribing for Interests at subsequent closings will participate in existing portfolio
investments of the Fund, diluting the interest of existing Limited Partners therein. Although such Limited
Partners will contribute their pro rata share of previously made Fund draws (plus an additional amount
thereon), there can be no assurance that this payment will reflect the fair value of the Fund’s existing
investments at the time such additional Limited Partners subscribe for Interests.

U.S. Dollar Denomination of Interests

Interests are denominated in Dollars. Investors subscribing for Interests in any country in which Dollars are
not the local currency should note that changes in the value of exchange between Dollars and such currency
may have an adverse effect on the value, price or income of the investment to such investor. There may be
foreign exchange regulations applicable to investments in foreign currencies in certain jurisdictions. Each
prospective investor should consult with his or her own counsel and advisors as to all legal, tax, financial and
related matters concerning an investment in the Interests.

Provision of Managerial Assistance and Control

The Fund expects to structure investments so that it will be a “venture capital operating company” within the
meaning of regulations promulgated under ERISA. This requires that the Fund obtain rights to participate
substantially in and to influence substantially the conduct of the management of the majority of the Fund’s
portfolio companies. The Fund typically will designate directors to serve on the boards of directors of portfolio
companies. The designation of directors and other measures contemplated could expose the assets of the
Fund to claims by a portfolio company, its security holders and its creditors. The exercise of control over a
company imposes additional risks of liability for environmental damage, product defects, failure to supervise
management, violation of government regulations and other types of liability. If these liabilities were to occur,
the Fund could suffer significant losses in its investments. While the Manager intends to manage the Fund in
a way that will minimize exposure to these risks, the possibility of successful claims cannot be precluded.

Illiquidity of Limited Partner Interests; Restrictions on Transfer

The Interests will be issued in reliance upon certain exemptions from registration or qualification under
applicable U.S. federal and state or foreign securities laws and may not be transferred unless registered
under applicable U.S. federal and state or foreign securities laws or unless an exemption from such laws is
available. The Fund has no plans, and is under no obligation, to register the Interests under the U.S.

- 41 -
Securities Act of 1933, as amended or any other foreign securities laws. There will be no public market for
the Interests and none is expected to develop. In addition, Limited Partners will not be entitled to withdraw
their Capital Contributions and Interests may not be assigned or transferred without the written consent of the
General Partner. Redemptions also are not permitted except in limited circumstances as described in the
Partnership Agreement. Accordingly, Interests constitute illiquid investments and only should be purchased
by persons that are able to bear the risk of their investment for an indefinite period of time.

Fund, General Partner and the Manager Not Registered

The Fund is not registered under the U.S. Investment Company Act of 1940, as amended. The Investment
Company Act provides certain protection to investors and imposes certain restrictions on registered
investment companies (including, for example, limitations on the ability of registered investment companies to
incur leverage), none of which will be applicable to the Fund. The General Partner is not registered as a
broker-dealer under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), or with the
National Association of Securities Dealers, Inc. (the “NASD”), and is consequently not subject to the record-
keeping and specific business practice provisions of the Exchange Act and the rules of the NASD. In
addition, neither the General Partner nor the Manager are registered as investment advisers under the U.S.
Investment Advisers Act of 1940, as amended, and are consequently not subject to the record-keeping,
disclosure and other fiduciary obligations specified in such Act. However, in the event that either the General
Partner or the Manager determines that registration as an investment adviser is required, they do not
anticipate that doing so would materially affect the Fund.

Tax Considerations

An investment in the Fund may involve complex U.S. federal income tax considerations that will differ for each
Limited Partner. Under certain circumstances, the Limited Partners could be required to recognize taxable
income in a taxable year for U.S. federal income tax purposes, even if the Fund either has no net profits in
such year or has an amount of net profits in such year that is less than such amount of taxable income. See
Section 10: Certain Tax and Legal Considerations. In addition, the Fund is likely to invest in securities of
corporations and other entities organized outside the United States. Income from such investments included
in a Partner’s distributive share of Fund income related to such investments may be subject to non-U.S.
withholding taxes, which may or may not be reduced or delimitated by an income tax treaty.

Potential Conflicts of Interest

Other Activities.

Although the Principals will commit a significant amount of their business efforts to the Manager, the
Principals are not required to devote all of their time to the Fund’s affairs.

Allocation of Investment Opportunities.

Through the end of the Commitment Period, any investment opportunity suitable for the Fund that is
presented to the General Partner and the Manager will be offered to the Fund, except for: (i) investment
opportunities related to current portfolio holdings of the Principals; (ii) suitable investment opportunities that
are within the investment parameters of other investment funds permitted to be organized by the Principals or
their respective affiliates under the Partnership Agreement; (iii) investment opportunities anticipated to require
less than $5 million of equity investment; (iv) investments intended to protect or enhance the value of
investments included in sentences (i) through (iii) above; (v) investment opportunities presented to the
Principals in their capacity as directors of public or private companies and in similar circumstances where pre-
existing fiduciary duties apply; and (vi) investment opportunities declined by the Fund.

Other Similar Funds.

Unless consented to by 66-2/3% in interest of the Limited Partners, the General Partner, the Manager and the
Principals will not act as manager or the primary source of transactions on behalf of another pooled
investment fund with overall objectives substantially similar to those of the Fund, until the earlier of (a) the end

- 42 -
of the Commitment Period or (b) such time as the Fund is 75% invested or committed to be invested
(including a reserve for Follow-on Investments, fees and expenses).

Management Fee; Carried Interest

The Management Fee payable by the Fund to the Manager and the carried interest that the General Partner
will receive under the Partnership Agreement have not been established on the basis of an arm’s-length
negotiation among the Fund, the General Partner and the Manager. However, the General Partner believes
that the Management Fee and the terms of such carried interest generally reflect prevailing market terms. In
addition, the existence of the carried interest that the General Partner will receive under the Partnership
Agreement may create an incentive for the General Partner to approve and cause the Fund to make more
speculative investments than it would otherwise make in the absence of such performance-based
compensation.

Diverse Limited Partners

The investors in the Fund are expected to include diverse non-U.S. investors that may have conflicting
tax and other interests with respect to their investment in the Fund. In addition, the Manager and its
affiliates and employees may invest directly in the Fund. As a result, conflicts of interest may arise in
connection with decisions made by the Manager that may be more beneficial for one type of investor. In
making decisions, the Manager intends to consider the investment objectives of the Fund as a whole, and
not the investment objectives of any Limited Partner individually.

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10. CERTAIN TAX AND LEGAL CONSIDERATIONS

Securities Law Considerations

United States Securities Act of 1933, as amended

The interests in the Fund offered hereby are “securities,” as defined in the United States Securities Act of
1933, as amended (the “Securities Act”) and state securities laws. The Securities Act provides, among other
things, that no sale of any securities may be made except pursuant to a registration statement that has been
filed with the U.S. Securities and Exchange Commission (the “SEC”), and has become effective, unless such
sale (or the security sold) is specifically exempted from registration. State securities laws have analogous
provisions.

The Interests being offered hereby have not been registered under the Securities Act or any state or other
securities laws or the laws of any non-U.S. jurisdiction, including those of the Cayman Islands, nor is such
registration contemplated. This Memorandum has not been reviewed by the SEC, nor has the SEC or any
state securities commission or regulatory authority approved, passed upon or endorsed the merits of this
offering. The offering and proposed sale of Interests described herein will be made to a limited number of
investors: (i) in reliance upon the “private placement” exemption from registration provided in Section 4(2) of
the Securities Act and/or Regulation D or Regulation S promulgated by the SEC thereunder; and (ii) where
available, in reliance upon appropriate exemptions from state or non-U.S. registration or qualification
requirements, or pursuant to registration or qualification under such state or non-U.S. requirements. To
ensure compliance with the requirements for such exemption, interests will be offered and sold only to:
(a) U.S. persons that are “accredited investors,” as such term is defined in Regulation D; or (b) non-U.S.
persons that meet the requirements of Regulation S. Each prospective investor will be required to make
certain representations in its Subscription Agreement to enable the General Partner to determine whether
such investor is an “accredited investor” and otherwise suitable to purchase the Interests offered hereby.

United States Investment Company Act of 1940, as amended

It is anticipated that the Fund will be exempt from provisions of the United States Investment Company Act of
1940, as amended (the “Investment Company Act”), pursuant to the exemption contained in Section 3(c)(7)
thereunder. Section 3(c)(7) exempts issuers who are not making and do not presently propose to make a
public offering of their securities and whose outstanding securities are owned exclusively by persons who, at
the time of acquisition of such securities, are “qualified purchasers” as defined in Section 2(a)(51)(A) of the
Investment Company Act. Generally, the following persons are “qualified purchasers”:

(i) any natural person (alone or jointly with such person’s spouse) who owns not less than $5 million in
“investments” (as defined in Rule 2a51-l under the Investment Company Act);
(ii) any company that owns not less than $5 million in “investments” (as defined in Rule 2a5l-1 under the
Investment Company Act) and that is owned directly or indirectly by or for two or more natural persons
who are related as siblings, spouses (including former spouses), or direct lineal descendants (whether
by birth or adoption), spouses of such persons, estates of such persons, or foundations, charitable
organizations, or trusts established by or for the benefit of such persons; provided, such company was
not formed for the purpose of acquiring the Interests;
(iii) any trust not covered by clause (ii) that was not formed for the purpose of acquiring the Interests, as to
which the trustee or other person authorized to make the trust’s investment decisions, and each settlor
or other person who has contributed assets to the trust, is a person described in clauses (i), (ii) or (iv);
(iv) any person not formed for the specific purpose of acquiring Interests, acting for its own account or the
accounts of other qualified purchasers, who in the aggregate owns and invests on a discretionary basis
not less than $25 million in “investments” (as defined in Rule 2a51-1 under the Investment Company
Act), except that an employee benefit plan is a qualified purchaser only with respect to investment
decisions made by the plan trustee or other plan fiduciary and only if the plan owns at least $25 million of
investments that is not subject to participant direction;
(v) any company, each of the beneficial owners of which is a qualified purchaser; and

- 44 -
(vi) any person that is a Qualified Institutional Buyer (as defined in Rule 144A), except that:
(a) a dealer (as defined in Rule 2a51-5 under the Investment Company Act) is a qualified purchaser
only if it owns and invests on a discretionary basis at least $25 million in securities of issuers that
are not affiliated persons of the dealer; and
(b) any employee benefit plan (or trust fund holding the assets of such a plan) that is a Qualified
Institutional Buyer is a qualified purchaser only with respect to investment decisions made by the
plan’s fiduciary, trustee, or sponsor; provided, however, that a company formed for the specific
purpose of acquiring an interest in the Fund will not be a “qualified purchaser” unless each
beneficial owner of its securities is a “qualified purchaser.” In order to ensure that the Fund may rely
upon Section 3(c)(7) of the Investment Company Act, the General Partner will obtain appropriate
representations and undertakings from prospective investors.
United States Investment Advisers Act of 1940, as amended

Neither the General Partner nor the Manager is registered as an investment adviser under the United States
Investment Advisers Act of 1940, as amended (the “Advisers Act”), in reliance on Section 203(b)(3) thereof
and Rule 203(b)(3)-1 promulgated thereunder. In the event that either the General Partner or the Manager
determines that registration as an investment adviser is required, they do not anticipate that doing so would
materially affect the Fund.

Cayman Islands

The Fund will not be registered as a mutual fund under the Mutual Funds Law (as revised) of the Cayman
Islands. The Interests may not be offered to the public in the Cayman Islands.

Certain ERISA Considerations

TO ENSURE COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230, YOU ARE HEREBY
NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS MEMORANDUM IS NOT
INTENDED OR WRITTEN BY US TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY
PARTNERS, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON PARTNERS
UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH
THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND
(C) EACH PARTNER SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM
AN INDEPENDENT TAX ADVISOR.

The following is a summary of certain considerations associated with an investment in the Fund by a pension,
profit sharing or other employee benefit plan or individual retirement account subject to Title I of the United
States Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the
United States Internal Revenue Code of 1986, as amended (the “Code”, and each such plan, an “Employee
Plan”).

A fiduciary considering investing assets of an Employee Plan in the Fund should consult its legal advisor
about ERISA, fiduciary and other legal considerations before making such an investment. Specifically, before
authorizing an investment in the Fund, any such fiduciary should, after considering the Employee Plan’s
particular circumstances, determine whether the investment of such Employee Plan’s assets in the Fund is
appropriate under the fiduciary standards of ERISA or other applicable law including standards with respect to
prudence, diversification and delegation of control and the prohibited transaction provisions of ERISA and the
Code.

ERISA and the Code do not define “plan assets.” However, regulations (the “Plan Asset Regulations”)
promulgated under ERISA by the U.S. Department of Labor generally provide that when an Employee Plan
acquires an equity interest in an entity that is neither a “publicly-offered security” nor a security issued by an
investment company registered under the Investment Company Act, the Employee Plan’s assets include both
the equity interest and an undivided interest in each of the underlying assets of the entity unless it is
established either that equity participation in the entity by “benefit plan investors” is not “significant” or that the
entity is an “operating company,” in each case as defined in the Plan Asset Regulations.

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For purposes of the Plan Asset Regulations, equity participation in an entity by benefit plan investors is not
significant if their aggregate interest is less than 25% of the value of any class of equity securities in the entity
(disregarding, for purposes of such determination, any interests held by persons (and their affiliates) who
have discretionary authority or control with respect to the assets of the entity or who provide investment
advice for a fee with respect to such assets). Benefit plan investors, for these purposes, include Employee
Plans and certain other types of plans, such as government plans and foreign plans, not subject to Title I of
ERISA or Section 4975 of the Code.

The definition of “operating company” in the Plan Asset Regulations includes, among other things, a “venture
capital operating company” (a “VCOC”). In general, an entity may qualify as a VCOC if (i) at least 50% of its
assets valued at cost (other than short-term investments pending long-term commitment or distribution to
investors) are invested in “operating companies,” i.e., entities that are primarily engaged in the production or
sale of a product or service other than the investment of capital, that are not VCOCs and with respect to
which the entity has or obtains direct contractual management rights and (ii) such entity in the ordinary course
of its business actually exercises such management rights with respect to one or more of the operating
companies in which it invests.

If the assets of the Fund were deemed to be “plan assets” of Employee Plans whose assets were invested in
the Fund, whether as a result of the application of the Plan Asset Regulations or otherwise, certain provisions
of ERISA and Section 4975 of the Code would generally extend to investments made by the Fund. This
would result, among other things, in (i) the application of the prudence and other fiduciary standards of ERISA
(which impose liability on fiduciaries) to investments made by the Fund, which could materially affect the
operations of the Fund, (ii) potential liability of persons having investment discretion over the assets of the
Employee Plans investing in the Fund should investments made by such entities not conform to ERISA’s
prudence and fiduciary standards under Part 4 of Subtitle B of Title I of ERISA, unless certain conditions are
satisfied, and (iii) the possibility that certain transactions that the Fund might enter into in the ordinary course
of its business and operation might constitute “prohibited transactions” under ERISA and the Code. In
addition, such “plan asset” treatment would subject the calculation and payment of the General Partner’s fees
to applicable prohibited transaction rules requiring that fees constitute “reasonable compensation” for services
rendered and comply with certain conflict of interest provisions of ERISA. A prohibited transaction, in addition
to imposing potential personal liability upon fiduciaries of the Employee Plans, may also result in the
imposition of an excise tax under the Code upon the “party in interest” (as defined in ERISA) or “disqualified
person” (as defined in the Code) with respect to the Employee Plan.

The Fund does not intend to attempt to comply with the requirements of ERISA and Section 4975 of the
Code. The Partnership Agreement will provide that the General Partner will use reasonable efforts so that its
assets will not constitute “plan assets” within the meaning of the Plan Asset Regulations. It is not currently
known whether “benefit plan investors” will acquire more than 25% of any class of equity securities of the
Fund and there can be no assurance that investment by benefit plan investors in the Fund will not be
“significant” within the meaning of the Plan Asset Regulations. Consequently, the General Partner will
attempt to structure the investments of the Fund and operate the Fund in such a manner as to qualify the
Fund coincident with, and at all times subsequent to, its initial long-term investment as a VCOC so that the
assets of the Fund will not be deemed to include “plan assets” within the meaning of the Plan Assets
Regulations. However, there can be no assurance that the Fund will qualify as a VCOC, that the structure of
particular investments of the Fund will satisfy the Plan Asset Regulations or that the underlying assets of the
Fund will not otherwise be deemed to include ERISA plan assets.

ANY FIDUCIARY FOR AN EMPLOYEE PLAN SHOULD CONSULT ITS LEGAL ADVISOR CONCERNING
THE ERISA OR OTHER LEGAL CONSIDERATIONS DISCUSSED ABOVE BEFORE MAKING AN
INVESTMENT IN THE FUND.

Other Regulations

Other rules and regulations applicable to the activities of the Fund may be amended in the future; any such
amendments could impose restrictions on the Fund as to make it impossible or uneconomical for the Fund to
operate as intended.

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Mandatory Withdrawal

Under the Partnership Agreement, the General Partner may require a Limited Partner to withdraw from the
Fund if, among other things, failure to do so would require the Fund to register the interests in the Fund under
the Securities Act, would require the Fund to register as an investment company under the Investment
Company Act or would result in the characterization of the Fund’s assets as assets of an Employee Plan, or
would otherwise subject the Fund, the General Partner or the Manager to restrictions that would make it
impossible, impractical or uneconomical for any of the foregoing to operate as intended.

Certain Tax Considerations

The following is a summary of certain Cayman Islands and United States federal income tax consequences of
an investment in Interests in the Fund and is based upon the advice of Walkers with respect to Cayman
Islands taxes and the advice of Paul, Weiss, Rifkind, Wharton & Garrison LLP with respect to U.S. federal
income taxes. The summary does not purport to be a comprehensive description of all of the tax
considerations that may be relevant to a decision to invest in the Fund and does not purport to deal with the
tax consequences applicable to all categories of investors, some of which (such as dealers in securities or
commodities, other investors that do not hold their Interests as capital assets, banks, thrifts and investors that
own 10% or more of the Interests in the Fund) may be subject to special rules. The summary deals only with
taxpayers who will hold Interests as capital assets for U.S. federal income tax purposes, and who invest in
connection with this offering. The actual tax and financial consequences of the purchase and ownership of
Interests in the Fund will vary depending upon investors’ particular circumstances.

This summary is based on tax laws in effect in the Cayman Islands and on the provisions of the Code, final,
temporary and proposed U.S. Treasury Department regulations thereunder, and administrative and judicial
interpretations thereof, all as in effect as of the date hereof, but all of which are subject to change (possibly on
a retroactive basis) and to differing interpretations. There can be no assurance that the taxing authorities of
the Cayman Islands or the U.S. Internal Revenue Service (the “IRS”) will not take a contrary view, and no
ruling from such taxing authorities or the Service has been or will be sought.

THE INCOME TAX LAWS APPLICABLE TO PARTNERSHIPS AND TO INVESTORS THEREIN ARE
EXTREMELY COMPLEX, AND THE FOLLOWING SUMMARY IS NOT EXHAUSTIVE AND DOES NOT
CONSTITUTE TAX ADVICE. A PERSON CONSIDERING AN INVESTMENT IN THE FUND SHOULD
CONSULT ITS TAX ADVISOR IN ORDER TO FULLY UNDERSTAND THE FEDERAL, STATE, LOCAL AND
FOREIGN INCOME TAX CONSEQUENCES OF AN INVESTMENT WITH RESPECT TO THE INVESTOR’S
PARTICULAR SITUATION.

NON-UNITED STATES INVESTORS ARE URGED TO CONSULT LOCAL TAX ADVISORS WITH RESPECT
TO THE FOREIGN TAX CONSEQUENCES OF AN INVESTMENT IN THE FUND.

UNITED STATES TAX-EXEMPT INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE FUND.

TO ENSURE COMPLIANCE WITH INTERNAL REVENUE SERVICE CIRCULAR 230, YOU ARE HEREBY
NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS MEMORANDUM IS NOT
INTENDED OR WRITTEN BY US TO BE RELIED UPON, AND CANNOT BE RELIED UPON BY
PARTNERS, FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON PARTNERS
UNDER THE INTERNAL REVENUE CODE; (B) SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH
THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND
(C) EACH PARTNER SHOULD SEEK ADVICE BASED ON ITS PARTICULAR CIRCUMSTANCES FROM
AN INDEPENDENT TAX ADVISOR.

Cayman Islands

Pursuant to Cayman Islands tax laws, distributions of profit from the Fund and returns of capital in respect of
the Interests will not be subject to taxation in the Cayman Islands and no withholding will be required on such
payments to any Partner. Gains derived from the sale or transfer of the Interests will not be subject to income

- 47 -
or corporate tax in the Cayman Islands. In addition, the Cayman Islands currently has no income, corporate
or capital gains tax and no estate, duty, inheritance tax or gift tax applicable to the Fund or any Partner.

The Fund will be an exempted limited partnership under Cayman Islands law and the Fund will make
application to the Governor-in-Council of the Cayman Islands for, and expects to receive, an undertaking as
to tax concessions pursuant to Section 17 of the Exempted Limited Partnership Law which will provide that for
a period of 50 years from the date of approval of the application, no law thereafter enacted in the Cayman
Islands imposing any taxes to be levied on profits or income or gains or appreciation shall apply to the Fund
or any Partner in respect of the operations or assets of the Fund or the interest of any Partner therein, and no
tax in the nature of estate, duty or inheritance tax shall be payable in respect of the obligations of the Fund or
the Interests of the Partners therein.

United States

United States Taxation of Fund Operations

Partnership Classification. Under current law, the Fund expects to be classified as a partnership and not as
an association taxable as a corporation. However, the Fund could fail to qualify as a partnership for federal
income tax purposes in future years as a result of a variety of developments including, without limitation, (i)
modifications of the law governing the classification of entities as partnerships and (ii) characterization of the
Fund as a “publicly traded partnership” as a result of the volume and nature of contributions and redemptions
of capital and transfers of partnership interests. A publicly traded partnership is any partnership the interests
of which are traded on an established securities market or which are readily tradable on a secondary market
(or the substantial equivalent thereof). Interests in the Fund will not be traded on an established securities
market and Treasury Regulations pertaining to publicly traded partnerships provide certain safe harbors under
which interests in a partnership will not be considered readily tradable on a secondary market (or the
substantial equivalent thereof). The Fund expects to qualify for a safe harbor exemption provided for private
placements and may qualify for other exemptions from the publicly traded partnership rules as well.

Failure to qualify as a partnership could result in the Fund being treated as a corporation subject to an entity-
level federal income tax. Treatment of the Fund as an association taxable as a corporation would
substantially reduce the anticipated benefits of an investment in the Fund. If the Fund were determined to be
taxable as a corporation, it would be taxable on its earnings at corporate income tax rates and any
distributions to the Partners would be taxable as dividends (taxable to individuals at capital gains rates to the
extent they would constitute “qualified dividend income”) to the Partners to the extent of the earnings and
profits of the Fund. The remainder of this discussion assumes that the Fund will be treated as a partnership
for federal income tax purposes.

In General. As a partnership, the Fund itself will not be subject to U.S. federal income tax. The Fund will file
an annual partnership information return that will report the results of operations using the accrual method of
accounting. Each Partner otherwise required to file a U.S. federal income tax return (a “U.S. Partner”) will be
required to report separately, on its own U.S. federal income tax return, its allocable share (whether or not
distributed) of the Fund’s net long-term capital gain or loss, net short-term capital gain or loss, net ordinary
income or loss and various other categories of income, gain, loss, deduction or credit. Under Section 704(b)
of the Code, a Partner’s allocable share of Fund items of income, gain, loss, deduction or credit will be
governed by the Partnership Agreement if such allocations have “substantial economic effect” or are
determined to be in accordance with such Partner’s “interest” in the Fund. The General Partner believes that
the allocations set forth in the Partnership Agreement should be respected for U.S. federal income tax
purposes. However, if the allocations that are made pursuant to the Partnership Agreement with respect to a
particular item were successfully challenged by the IRS, then allocations in respect of such item would be
made by the IRS according to its determination of each Partner’s “interest” in the Fund, taking into account all
of the facts and circumstances. In some instances, this could result in a Partner recognizing a greater or
smaller amount of income, gain, loss, deduction or credit than it would have recognized pursuant to the terms
of the Partnership Agreement, or in a Partner recognizing an amount of income, gain, loss, deduction or credit
at a different time than pursuant to the terms of the Partnership Agreement.

- 48 -
United States Partners. The following discussion describes consequences to U.S. Partners in the Fund. For
this purpose, a “U.S. Partner” means any person or entity that is (i) a citizen or resident of the United States,
(ii) a corporation or other entity taxable as a corporation created or organized in or under the laws of the
United States or any political subdivision of the United States, (iii) an estate the income of which is subject to
U.S. federal income taxation regardless of its source or (iv) a trust, if a United States court is able to exercise
primary supervision over the administration of the trust and one or more U.S. persons have the authority to
control all substantial decisions of the trust or if the trust has validly made an election to be treated as a U.S.
person under applicable Treasury Regulations.

For U.S. federal income tax purposes, income earned through a foreign or domestic partnership or other flow-
through entity is attributed to its owners. Accordingly, if a partnership or other flow-through entity holds a
partnership interest, the U.S. federal income tax treatment of the holder will generally depend on the status of
the partner or other owner and the activities of the partnership or other flow-through entity.

Each U.S. Partner will be subject to tax on its allocable share of the Fund’s taxable income or loss, regardless
of whether it has received or will receive any distribution of cash or property from the Fund. In addition, the
Fund could realize taxable income prior to the receipt of cash or property with respect to such income (for
example, deemed dividends and original issue discount). Consequently, a U.S. Partner’s income tax liability
related to transactions by the Fund could exceed the amount distributed by the Fund to such U.S. Partner in a
particular year. Subject to certain conditions and limitations, a U.S. Partner will be entitled to claim a credit for
U.S. federal income tax purposes for its allocable share of non-U.S. income taxes incurred by the Fund
(including non-U.S. income taxes withheld on distributions by the Fund). Certain non-U.S. taxes, including
registration and other non-income based taxes, may not be creditable for U.S. federal income tax purposes.

Certain Limited Partners that are U.S. Partners, including individuals, may be subject to various limitations on
their ability to use their allocable share of deductions and losses of the Fund. Such limitations include those
relating to “passive losses,” amounts “at risk,” capital losses and itemized deductions. Non-corporate Limited
Partners that are U.S. Partners may also be subject to limitations relating to the deductibility of “investment
interest.” Prospective investors should consult their own tax advisors regarding the application of these and
other such rules to their investment in the Fund.

In addition, a U.S. Partner’s allocable share of the Fund’s organization and syndication expenses will not be
currently deductible. An election may be made by a partnership to amortize organizational expenses over a
60-month period and the Fund intends to make such election. However, syndication expenses must be
capitalized and cannot be amortized or otherwise deducted.

Because investments may be made and realized in currencies other than Dollars or debt securities
denominated in currencies other than Dollars, a Limited Partner may recognize a foreign currency gain or loss
(ordinary, not capital) when payment is received with respect to such debt securities or when such partner or
the Fund disposes of foreign currency or such debt securities.

Investment in Passthrough Entities. If the Fund invests in partnerships or other entities treated as
partnerships for U.S. federal income tax purposes (“passthrough entities”), the Fund’s distributive share of
items of income, gain, loss, deduction or credit of any such entity will pass through to the Fund, which will in
turn pass these items through to the Partners, in accordance with the rules described above.

Cash Distributions and Redemptions. The receipt of a distribution from the Fund by a Limited Partner, not in
liquidation of the Partner’s entire interest, generally will not result in the recognition of gain or loss for U.S.
federal income tax purposes. However, distributions in excess of a Partner’s adjusted basis for its Interest will
result in the recognition of gain in the amount of such excess.

A Partner’s adjusted basis in its Interest will initially equal the amount of any initial cash contribution. The
basis will be increased by the Partner’s additional cash contributions and its allocable share of Fund income.
The basis will be decreased (but not below zero) by the amount of cash distributions, the adjusted basis of
any property distributed from the Fund and the Partner’s allocable share of Fund losses.

- 49 -
No gain will be recognized by a Partner with respect to distributions made to it in liquidation of its Interest
unless the amount of cash distributed exceeds its adjusted basis for its Interest immediately before the
distribution (including adjustments reflecting operations in the year of dissolution). No loss may be
recognized by a Partner with respect to liquidating distributions unless the property distributed consists solely
of cash and then only to the extent that the amount of the cash is less than the Partner’s adjusted basis in its
Interest. The basis of any property received by a Partner in liquidation of its Interest generally will be equal to
the adjusted basis of its Interest, less the amount of any cash received in the liquidation.

A Partner cannot deduct losses from the Fund in an amount greater than its adjusted tax basis in its Interest
as of the end of the Fund’s tax year. Any excess losses may be able to be deducted by a Partner in
subsequent tax years to the extent that the Partner’s adjusted tax basis for its Interest exceeds zero.

Limitations on Losses and Deductions

While the Fund is not intended to be a “tax shelter,” it is possible that losses and expenses could exceed
Fund income and gain during a taxable period. The ability of a Limited Partner to deduct such a net loss from
its taxable income from other sources may be subject to a number of limitations under the Code, in addition to
the limits described above. Such limitations include those relating to “passive losses,” amounts “at risk,”
capital losses and itemized deductions. Partners may also be subject to limitations relating to “investment
interest.” Prospective investors should consult their own tax advisors regarding the application of these and
other such rules to their investment in the Fund.

Under Section 67 of the Code, a non-corporate United States Partner (including a shareholder of an S
corporation and the owner of a grantor trust) may deduct miscellaneous itemized deductions (including,
without limitation, investment advisory fees, tax preparation fees, unreimbursed employee expenses and
subscriptions to professional journals) only to the extent such deductions exceed, in the aggregate, 2% of the
taxpayer’s adjusted gross income. The portion of each Limited Partner’s share of the Management Fee and
other expenses paid to the Manager may be treated as a miscellaneous itemized deduction. Accordingly, a
United States Partner who is an individual generally might be permitted to deduct such expenses only to the
extent that the sum of such expenses plus the individual’s other miscellaneous itemized deductions exceeds
2% of the individual’s adjusted gross income. However, corporate taxpayers (other than S corporations) and
tax-exempt organizations are not affected by the 2% floor. In addition, under Section 68 of the Code, if the
adjusted gross income of a non-corporate United States Partner (excluding estates and trusts) exceeds a
threshold amount, certain itemized deductions will be reduced by the lesser of (i) 3% of the excess of
adjusted gross income over the threshold amount or (ii) 80% of the amount of the itemized deductions
otherwise allowable during the taxable year. The threshold amount for 2004 is $142,700 (or $71,350 for
married individuals filing a separate return). This limitation is currently scheduled to be reduced, and
ultimately phased out, for taxable years beginning between January 1, 2006 and December 31, 2009.

In addition, a Partner’s allocable share of the Fund’s organization and syndication expenses will not be
currently deductible. An election may be made by a partnership to amortize organizational expenses over a
60-month period and the Fund intends to make such election. However, syndication expenses must be
capitalized and cannot be amortized or otherwise deducted.

Sale or Exchange of Fund Property

In general, gain or loss from the disposition of property of the Fund held for more than 12 months will be
treated as long-term capital gain or loss. The deductibility of both long-term and short-term capital losses
may, however, be limited. In the case of individuals and other non-corporate taxpayers, long-term capital gain
(including qualified dividend income) is generally taxed at a maximum 15% U.S. federal tax rate for taxable
years beginning on or before December 21, 2008.

Original Issue Discount and Market Discount

Investments by the Fund in securities with original issue discount generally will result in income to the Fund
equal to a portion of the excess of the face value of the securities over their issue price (the “original issue
discount”) each year that the securities are held, even though the Fund receives no cash interest payments.

- 50 -
In addition, if the Fund invests in certain high-yield original issue discount obligations issued by domestic
corporations, a portion of the original issue discount accruing on such an obligation that is allocable to a
corporate Partner may be eligible for the deduction for dividends received by corporations.

Gain derived by the Fund from the disposition of any market discount bonds (i.e., bonds purchased other than
at original issue, where the face value of the bonds exceeds their purchase price) held by the Fund generally
will be taxed as ordinary income to the extent of the accrued market discount on the bonds, unless the Fund
elects to include the market discount in income as it accrues.

For each taxable year, interest expense incurred by the Fund to purchase or carry a market discount
obligation cannot be deducted to the extent that the amount thereof exceeds the interest (including original
issue discount) that is includible in Fund income for such taxable year with respect to such obligation;
disallowed interest will be deductible in the year of the obligation’s disposition. Alternatively, at the Fund’s
election, such interest expense can be carried forward and deducted in a year prior to the disposition of the
obligation, if any, in which the taxpayer has net interest income from the obligation.

Investments by the Fund in Foreign Entities

The Fund will generally invest in securities of corporations and other entities organized outside the United
States. Income from such investments, including, but not limited to, interest and dividends, which is included
in a Partner’s allocable share of Fund income may be subject to foreign withholding taxes. Although an
income tax treaty in effect between the country of the issuer of securities in which the Fund invests and the
country of which the Partner is a resident may reduce or eliminate such foreign withholding taxes, there can
be no assurance that the benefit of such an income tax treaty will extend to payments made to the Fund. It
may therefore be necessary for U.S. Partners to claim the benefits of such an income tax treaty by filing a
claim for a refund with the country of the issuer. U.S. Partners will generally be entitled to a tax credit against
U.S. tax liability for such foreign withholding taxes, subject to the complex limitations under the Code
applicable to such credit. However, any non-U.S. entity considering investing in the Fund should consult its
own tax advisors with respect to the availability of credits against tax liability for such foreign withholding
taxes.

Under the “Subpart F” rules of the Code, U.S. Partners may under certain circumstances be required to
include as ordinary income for U.S. federal income tax purposes amounts attributable to some or all of the
earnings of a “controlled foreign corporation” in which the Fund makes an investment in advance of the
receipt of cash attributable to such amounts. In addition, gain on the sale or other disposition of an
investment by the Fund in a foreign corporation that is or has been a “controlled foreign corporation” may be
re-characterized as a dividend in whole or in part.

Under the “passive foreign investment company” rules of the Code, U.S. Partners may under certain
circumstances be required to pay additional tax (and interest) in respect of distributions from and gains
attributable to the sale or other disposition of stock of, a Fund investment that constitutes a passive foreign
investment company (a “PFIC”). In lieu of the foregoing treatment, the Fund may, under certain
circumstances, make an election pursuant to which U.S. Partners would include in income each year a
portion of the ordinary earnings and net capital gains of a passive foreign investment company, even if not
distributed. Alternatively, in the case of certain marketable stock in a passive foreign investment company, an
election may be made to be taxed on an annual marked-to-market basis (which would result in ordinary
income and, subject to certain limitations, loss). The Fund generally intends to structure its investments so as
not to trigger Subpart F, foreign personal holding company, or passive foreign investment company rules, but
no assurance in this regard can be given. Furthermore, there can be no assurance that a company in which
the Fund invests will not qualify as a PFIC or that a PFIC in which the Fund does invest will provide the
information necessary for a “qualified electing fund” election to be made.

The Fund will invest in foreign securities denominated in currencies other than the U.S. dollar, and the Fund
may realize gain or loss in the course of translating funds into and out of Dollars and the currency in which
such securities may be denominated. Generally, the Fund’s gains and losses on the acquisition and
disposition of foreign currency (e.g., the purchase of foreign currency and subsequent use of such currency to
purchase foreign equity or debt securities) will be treated as ordinary income or loss. Similarly, gains or

- 51 -
losses attributable to fluctuations in exchange rates between the time the Fund accrues interest or other
receivables or accrues expenses or other liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities may be treated as ordinary income or ordinary loss.

Tax-Exempt U.S. Investors

Organizations exempt from United States federal income tax under Section 501(a) of the Code, including
ERISA plans and certain other investors, are subject to the tax on unrelated business taxable income
(“UBTI”). A number of states and localities also impose taxes that may vary from the federal unrelated
business income tax on a tax-exempt organization’s UBTI derived from or attributable to sources or business
in the particular state or locality. UBTI arises primarily as income from an unrelated trade or business
regularly carried on or as income from property as to which there is or has been acquisition indebtedness
(including gain from the sale of such debt-financed property). The Fund does not expect to generate material
amounts of UBTI, however, the Fund has the ability to borrow funds temporarily to make investments in
portfolio companies pending receipt of Partners’ capital contributions and for certain other purposes as
provided in Section 8: Summary of Principal Terms. Therefore, the Fund may hold debt-financed property
that may produce UBTI. Each tax-exempt Partner will have an opportunity to make a capital contribution to
the Fund in lieu of having the Fund apply part of an interim financing to acquire such Partner’s share of any
such investment. A tax-exempt Partner who does make such an advance capital contribution may take the
position that such investment is not debt-financed with respect to it and thus will not produce UBTI; however,
there is no authority directly on point and it is possible that the IRS could challenge this position.

The characterization of income of the Fund derived from investments in passthrough entities depends largely
on the type and structure of activities conducted by such entities. If a passthrough entity in which the Fund
invests recognizes income or gain that would be taxable as UBTI if earned directly by a tax-exempt investor in
the Fund, such investor will be required to recognize its allocable share of such income or gain as UBTI. In
addition, if the Fund were to be treated directly or indirectly as having incurred acquisition indebtedness with
respect to an asset, a percentage of income or gain associated with that asset would be taxable as UBTI.

The General Partner may create one or more alternative investment vehicles (such as one or more
corporations) to effect investments by tax-exempt Partners that would otherwise be affected by UBTI so as to
permit such Partners to take the position that a tax-exempt Partner who holds its investment through such an
alternative investment vehicle will not have any share of income from such investments that constitutes UBTI.
However, there is no authority directly on point and there can be no assurance that the IRS will agree with this
position. The General Partner makes no assurance that it will create any alternative investment vehicles.
Regardless of whether or not income from an investment in an alternative investment vehicle results in UBTI,
however, the alternative investment vehicle itself may be subject to U.S. federal income tax on its income.

The Partnership Agreement provides an offset to the Management Fee with respect to certain net fee income
received by the Manager or any of its affiliates. The General Partner believes that a tax-exempt Partner
should not be deemed to have received any portion of such fees. However, there is a risk that the IRS might
take the position that a tax-exempt Partner should be treated as having received a portion of such fees and
the tax-exempt Partner’s share of such fees should be treated as UBTI.

It is likely that the Fund may produce UBTI, therefore, persons that seek to avoid UBTI completely (such as
charitable remainder trusts) should not invest directly in the Fund. Each potential investor that is tax-exempt
should consult its own tax advisor with respect to the specific tax consequences to it of an investment in the
Fund.

Non-U.S. Partners

Limited Partners who are not U.S. Partners would be subject to U.S. federal income tax on their distributive
shares of Fund income and gains only if the Fund is engaged in a trade or business within the United States,
and only to the extent that the income or gains are effectively connected with such a trade or business. The
Fund intends to conduct its operations so that it will not generate income that is effectively connected with a
trade or business within the United States.

- 52 -
Tax Matters Partners; Audits

The General Partner, as the tax matters partner of the Fund, will have considerable authority to make
decisions affecting the tax treatment and procedural rights of all the Partners. For example, it will decide how
to report Fund items on its tax returns. Partners are required by the Code to treat such items consistently on
their own U.S. federal income tax return unless they file a statement with the IRS disclosing the inconsistency.
In addition, the General Partner will have the right on behalf of all Partners to extend the statute of limitations
with respect to the Partners’ tax liability on Fund items.

In the event of an IRS audit, the tax treatment of items of gain, income, loss, deduction and credit generally
will be determined at the Fund level in a single proceeding, rather than by individual audits of the Partners.
An audit of the Fund may result in the disallowance, reallocation or deferral of losses or deductions claimed
by the Fund, as well as the acceleration or reallocation of income of the Fund. The audit may also result in
transactions that the Fund treated as non-taxable being treated as taxable, or items that the Fund reported as
long-term capital gain being treated as ordinary income or short-term capital gain. Any such change may
cause a Partner to be required to pay additional tax and interest.

If the IRS audits the Fund’s tax returns, the Partners’ own returns may also be audited, as a result of which
adjustments may be made to items reported on the Partners’ tax returns, including items unrelated to the
Fund. The legal and accounting costs incurred in connection with any audit of the Fund’s tax returns will be
borne by the Fund, but Partners will bear the cost of audits of their own returns.

State and Local Tax Considerations

In addition to the U.S. federal income tax consequences described above, prospective investors should
consider potential state and local tax consequences of an investment in the Fund. Foreign, state and local
laws often differ from U.S. federal income tax laws with respect to the treatment of specific items of income,
gain, loss, deduction and credit. A Partner’s allocable share of the taxable income or loss of the Fund
generally will be required to be included in determining its reportable income for state and local tax purposes
in the jurisdiction in which such Partner is subject to taxation. The Fund itself may be subject to state and/or
local tax, depending on the location and scope of the Fund’s activities. In addition, a state in which a Partner
is not a resident, but in which the Fund may be deemed to be engaged in business, may impose a tax on that
Partner with respect to its share of Fund income derived from that state. Under some circumstances, a
Partner with tax liabilities to more than one state may be entitled to a deduction or credit for taxes paid to one
state against the tax liability to another.

Prospective U.S. tax-exempt investors should be aware that the rules of some states and localities for
computing and/or reporting UBTI may differ from the U.S. federal rules.

- 53 -
11. ANTI-MONEY LAUNDERING REGULATIONS
Cayman Islands

In order to comply with regulations aimed at the prevention of money laundering, the General Partner may
require verification of the identity and/or the source of funds from all prospective investors (unless in any case
the Fund is satisfied that an exemption under the Money Laundering Regulations 2003 of the Cayman Islands
(the “Regulations”) or the Guidance Notes issued pursuant thereto (the “Guidance Notes”) applies).
Depending on the circumstances of each subscription, a detailed verification might not be required where:

(a) an investor makes the payment for his investment from an account held in the prospective
investor’s name at a recognized financial institution;

(b) an investor is regulated by a recognized regulatory authority and is based or incorporated in,
or formed under the law of, a recognized jurisdiction; or

(c) the subscription is made through an intermediary that is regulated by a recognized regulatory
authority and is based or incorporated in, or formed under the laws of, a recognized
jurisdiction.

For the purposes of these exceptions, recognition of a financial institution, regulatory authority or jurisdiction
will be determined in accordance with the Regulations and Guidance Notes by reference to those jurisdictions
recognized by the Cayman Islands as having sufficient anti-money laundering regulations.

The General Partner reserves the right to request such information as is necessary to verify the identity
and/or the source of funds of an investor. In the event of delay or failure by an investor to produce any
information required for verification purposes, the General Partner may refuse to accept the subscription of
such investor. The Fund, by written notice to any investor, may suspend the payment of any distributions to
such investor if it reasonably deems it necessary to do so to comply with anti-money laundering regulations
applicable to the Fund or the General Partner.

If any person who is resident in the Cayman Islands has a suspicion obtained in the course of business that
any other person is engaged in money laundering, that person is required to report such suspicion pursuant to
the Proceeds of Criminal Conduct Law (2001 Revision) of the Cayman Islands and such report shall not be
treated as a breach of any restriction upon the disclosure of information imposed by any enactment or
otherwise.

Other Jurisdictions

The Fund will also comply with the requirements of the USA Patriot Act and anti-money laundering
regulations of other applicable jurisdictions (the “Other Requirements”) pursuant to which the Fund could be
requested or required to obtain certain assurances from investors, disclose information pertaining to them to
governmental, regulatory or other authorities or to financial intermediaries or engage in due diligence or take
other related actions in the future. It is the Fund’s policy to comply with any Other Requirements in which
they are or may become subject and to interpret them broadly in favor of disclosure.

Cooperation

Each prospective investor in the Fund will be required to agree in the Subscription Agreement, and will be
deemed to have agreed by reason of owning Interests, that it will provide additional information or take such
other actions as may be necessary or advisable for the Fund in respect of the Fund to comply with the
Regulations or any Other Requirements, related legal process or appropriate requests (whether formal or
informal) or otherwise. Each prospective investor, by executing the Subscription Agreement consents, and by
owning Interests is deemed to have consented, to disclosure by the Fund and its agents to relevant third
parties of information pertaining to it in respect of such Regulations or Other Requirements or information
requests related thereto.

- 54 -
 SCHEDULE A

COMPANY PROFILES

Past performance of the investments described in this Schedule A are provided for illustrative purposes only
and are not indicative of the Fund’s future investment results. There can be no assurance that the Fund will
achieve comparable results, be able to implement its investment strategy or be able to avoid losses. In
addition, there can be no assurance that investments with an unrealized value will be realized at the
valuations shown, as actual realized returns will depend on, among other factors, future operating results, the
value of the assets and market conditions at the time of disposition, any related transaction costs, and the
timing and manner of sale, all of which may differ from the assumptions on which the valuations contained
herein are based.

A-1
VANDA

Industry Sector: IT service Investment Cost: $3.6 million

Location: China Realized Proceeds: $35.0 million
Company Stage: Expansion Unrealized Value: 0
Investment Date: 1998 Multiple of Capital Invested: 9.7x
Investment Status: Realized Gross IRR: NPA
Divestment Date: 2000

Business and Investment Description:

• Largest systems integrator in China’s banking sector
• 3 main businesses: system integration, networking, PC distribution
• 1,100 staff, and offices in Hong Kong, China and Southeast Asia
• Strong customer network in China: 17 locations
• Founded by 3 HK entrepreneurs with 15 yrs experience in IT service
• Distressed investment: Asia financial crisis, banks pulling out

Investment Thesis:
• Sizeable market: IT service for banking: $8 billion and CAGR 20% in China
• Leading player: top 3 player, top partner of IBM
• Valuable customer network: fairly high entry barriers
• Good valuation and deal structure

Role and Value-add of the Team:

• Sourced and closed the deal. Member of the board
• Closed unprofitable PC business
• Hired new CFO (interviewed 9 and selected 3 for management to select)
• Lobbied banks to continue their support
• Brought in a strategic investor
• Brought in Peregrine for software business spin-off

Financial Performance:

(US$ million) 1998 1999 2000

Sales 224.0 220.3 196.0

EBIT 3.6 (18.8) 8.9
Net Profit 1.3 (18.3) 4.2

(Source: data from company annual

reports)

A-2
YONGHE KING

Industry Sector: Fast food chain Investment Cost: $11.0 million

Location: China Realized Proceeds: $11.1 million
Company Stage: Expansion Unrealized Value: $8.7 million
Investment Date: 1999 Multiple of Capital Invested: 1.8x
Investment Status: Realized Gross IRR: NPA
Divestment Date: 2004

Business and Investment Description:

• Leading fast food chain in China after McDonalds and Kentucky Fried Chicken
• The company serves traditional Chinese food, using McDonalds’ chain store management style
• “YongHe King” brand is well known in China’s major cities
• Founded in 1996 by two Taiwanese entrepreneurs
• The company has grown its store network significantly since the investment in 1999

Investment Thesis:
• Direct play on fast food industry: booming when income reaches $800 per capital
• Clear market leader with a strong brand
• Simple model: tasty food, clean environment, affordable prices, chain operation
• Decent operating system: QSC control, cash and cost control, site selection control, etc

Role and Value-add of the Team:

• Sourced and closed the deal. Member of the Board
• Intensive care since it is a control stake
• Hired the site selection team from McDonalds
• Assisted founders to develop its business strategy: marketing, outsourcing
• Vetoed franchise stores and early expansion to 2nd-tier cities
• Signed-off on opening of each new store
• Sourced Jollibee as a buyer, led negotiation and closed the deal

A-3
NETEASE INC

Industry Sector: Online games, SMS, portal Investment Cost: $5.0 million
Location: China Realized Proceeds: $40.0 million
Company Stage: Early Unrealized Value 0
Investment Date: 2000 Multiple of Capital Invested: 8.0x
Investment Status: Realized Gross IRR: >70%
Divestment Date: 2004

Business and Investment Description:

• Leading Internet company that provides online game, short messaging services (SMS), free email,
instant messages services
• Strong brand and huge user space: 330 million registered accounts and average daily page views
exceeding 439 million (March 2005)
• Revenue grew to $109 million in 2004 from $2 million in 1999 (year of investment)
• Founded by a local entrepreneur William Ding who was ranked “The Richest Man in China” by
Forbes in 2003 at the age of 33

Investment Thesis:
• Early stage of a booming industry: Disruptive Technology - Internet
• Clear industry leader: top 3 players
• Strong brand: “Yahoo of China”
• Largest online community and most sticky site in China
• Best R&D team in China led by a founder who has killer instinct

Role and Value-add of the Team:

• Sourced and closed the deal. Active member of the Board. Audit Committee and Compensation
Committee
• Rode roller coaster: from zero to IPO; from delisting to a billion dollar company; changed business
model 3 times
• Led Compensation Committee. Hired and fired CEOs twice
• Led investigation of accounting misconduct, and liaison with NASDAQ and SEC to resume listing
status

Financial Performance:

(US$ million) 1999 2000 2001 2002 2003 2004 2005E 2006E

Sales 1.9 3.7 3.1 26.7 65.6 109.3 185.6 258.2

Sales Growth % 95% -15% 749% 145% 67% 70% 39%
EBITDA (6.3) (22.5) (25.9) 3.1 42.0 58.3 105.7 138.9
EBITDA Growth % 1247% 39% 81% 31%
Net Profit (6.3) (20.5) (28.1) 2.0 39.0 53.4 93.8 121.8
NP Growth % 1879% 37% 76% 30%

(Source: 1999~2004 from company listing prospectus and annual reports.

2005E~2006E from JP Morgan research report, June 3 2005)

A-4
NEWPALM

Industry Sector: Wireless data service Investment Cost: NPA

Location: China Realized Proceeds: NPA
Company Stage: Early Unrealized Value: 0
Investment Date: 2000 Multiple of Capital Invested: 2.8x
Investment Status: Realized Gross IRR: 45%
Divestment Date: 2004

Business and Investment Description:

• One of the leading wireless data service providers in China
• Provides wireless dating, ring tone and picture downloading, and other SMS services to mobile
phone users through China Mobile and China Unicom
• Founded by a returnee, John Xiao, the former head of Motorola’s wireless internet group
• Revenue grew to $25 million in 2003 from $0.6 million in 2000 (year of investment)

Investment Thesis:
• Early stage of a booming industry: wireless date service
• Ranked “Top 3” with Unicom network and “Top 8” with China Mobile’s network
• Backing the smart and fast learning returnees
• Professional ex-Motorola team with experience in the telecom sector

Role and Value-add of the Team:

• Sourced and closed the deal. Active member of the Board
• Strong board participation in developing business strategy and operating budget
• Initiated cost cutting and brought down the monthly operating expenses significantly
• Initiated acquisition of another SMS company
• Led and closed the sale of the company to a strategic investor

A-5
PANSOFT

Industry Sector: Enterprise software Investment Cost: NPA

Location: China Realized Proceeds: NPA
Company Stage: Early Unrealized Value: NPA
Investment Date: 2002 Multiple of Capital Invested: NPA
Investment Status: Unrealized Gross IRR: NA

Business and Investment Description:

• Involved in the development, sales and marketing of enterprise software in China
• Develop and sell Distribution Resource Planning (DRP) and Supply Chain Management (SCM)
software, and provide customized software solutions for corporations
• Key customers include Sinopec, PetroChina and their subsidiaries
• Founded by a spin off team from Long Chao Software group

Investment Thesis:
• Enterprise Resource Management software market
• Experienced team: 10 years in software development
• Continued support from PetroChina and Sinopec even after spin-off

Role and Value-add of the Team:

• Sourced and closed the deal
• Member of the Board

A-6
COMBA TELECOM SYSTEM

Industry Sector: Wireless equipment Investment Cost: $7.0 million

Location: China Realized Proceeds: NPA
Company Stage: Expansion Total Value: $12.8 million
Investment Date: 2003 Multiple of Capital Invested: 1.8x
Investment Status: Partially Realized Gross IRR: NPA

Business and Investment Description:

• Largest wireless coverage equipment manufacturer in China
• Develops, manufactures and distributes wireless repeaters and other products that enhance the
effectiveness of the wireless infrastructure of mobile phone operators
• Highly integrated business: from product R&D, to sales and distribution, to installation and after-
sales service
• Major customers are China Mobile and China Unicom
• Founded by a local entrepreneur, Mr. Tony Fok, an ex-China Mobile senior manager

Investment Thesis:
• China is the largest cellular market in the world. Direct play on the growth in cellular subscribers in
China
• No 1 player in a niche market: 22% market share
• Extensive sales network and deployment capability
• High barriers to entry: integrated service, working capital intensive
• Mature and proven management team: stable core team
• Substantial company with $27million profit, 26% net margins, 33% net income CAGR (2001-03)
• Attractive entry valuation

Role and Value-add of the Team:

• Sourced and closed the deal
• Provided institutional support in IPO
• Initiated analyst research coverage

Financial Performance:

(US$ million) 2000 2001 2002 2003 2004 2005E 2006E

Sales 18.6 55.3 74.3 103.6 140.5 179.5 226.8

Sales Growth % 198% 34% 39% 36% 28% 26%
EBITDA 6.6 16.2 24.2 31.2 37.7 50.6 63.3
EBITDA Growth % 147% 50% 29% 21% 34% 25%
Net Profit 6.1 15.4 20.9 27.1 32.8 43.6 52.6
NP Growth % 154% 35% 30% 21% 33% 21%

(Source: 2000~2004 from company listing prospectus and annual reports.

2005E~2006E from ICEA report March 14 2005)

A-7
LAUNCH TECH

Industry Sector: Auto diagnostic Investment Cost: $8.9 million

equipment Realized Proceeds: 0
Location: China Unrealized Value: $10.3 million
Company Stage: Expansion Multiple of Capital Invested: 1.2x
Investment Date: 2003 Gross IRR: NPA
Investment Status: Unrealized

Business and Investment Description:

• Leading developer, manufacturer and distributor of diagnostic, testing and maintenance products for
the automobile aftermarket
• Head office based in Shenzhen with over 1200 employees
• Approximately 600 R&D engineers, 15 granted patents and a well-known brand name in the
automobile aftermarket in both China and overseas
• Established distribution network: China: 40 branches and 180 distributors; overseas: 18 offices and
more than 70 distributors
• Early stage of high growth for export sales with revenue more than tripling in 2004

Investment Thesis:
• A market leader in a bigger home market:
o growing home market with 40% market share
o own brand, R&D, sales network
o top player in China, emerging to become a leading player even on global scale
• Strong export value proposition:
o engineer-labor intensive, 80+ man hours for each new car model
o engineer costs $2 per man hour in China vs $20 in US
o 70% cheaper than Bosch products after distributor’s mark up
• Highly driven entrepreneurs: how far can they go?
(vision, management skill, corporate governance, growing pain, value added)
• High barriers to entry (R&D, brand, distribution)

Role and Value-add of the Team:

• Sourced and closed the deal. Member of the Board
• Actively helped founders to manage growth and stay focused
• Strengthened financial management system
• Initiated research coverage by UOB and CSFB

Financial Performance:
(US$ million) 2000 2001 2002 2003 2004 2005E 2006E

Sales 3.7 6.9 12.7 24.8 33.6 51.8 68.1

Sales Growth % 84% 85% 95% 36% 54% 31%
EBITDA 1.9 3.3 5.8 8.0 7.3 15.7 18.4
EBITDA Growth % 74% 74% 38% -9% 116% 17%
Net Profit 1.5 2.8 4.5 5.7 4.8 11.5 14.5
NP Growth % 85% 60% 27% -16% 140% 26%

(Source: 2000~2004 from company listing prospectus and annual reports.

2005E~2006E from DBS report March 21 2005)

A-8
GREAT WALL AUTOMOBILE

Industry Sector: Pick-up trucks, SUVs Investment Cost: NPA

Location: China Realized Proceeds: NPA
Company Stage: Expansion Unrealized Value: NPA
Investment Date: 2003 Multiple of Capital Invested: 0.5x
Investment Status: Unrealized Gross IRR: NPA

Business and Investment Description:

• Private enterprise based in Hebei Province, China; the leading manufacturer of pick-up trucks and
sports utility vehicles (SUV) for the domestic market
• Focuses on the affordable low- to mid-end vehicles, and has the strongest price-performance
characteristics in its price categories. All of its models are marketed under its own “Great Wall” brand

Investment Thesis:
• Low automobile ownership penetration in China, combined with sustained national economic growth,
create a large potential market
• The company is a niche market leader, ranking No. 1 in the pick-up truck market in terms of sales
units since 1999. The company’s newly launched SUV business was ranked No.1 in 2003
• Strong brand and distribution network comprising 380 dealers and 340 service agents across China
• Low cost manufacturing due to scale and production base in Baoding, China
• The company has a strong management team, and has had a consistent profit growth track record
for 12 consecutive years

Role and Value-add of the Team:

• Sourced and closed the deal
• Close monitoring of financial performance

Financial Performance:

(US$ million) 2000 2001 2002 2003 2004 2005E 2006E

Sales 147.1 156.4 314.6 446.4 385.1 626.3 738.2

Sales Growth % 6% 101% 42% -14% 63% 18%
EBITDA 13.1 24.0 67.8 113.1 75.4 112.0 119.6
EBITDA Growth % 84% 182% 67% -33% 49% 7%
Net Profit 6.7 11.6 35.6 63.3 48.7 59.5 62.9
NP Growth % 74% 206% 78% -23% 22% 6%

(Source: 2000~2004 from company listing prospectus and annual reports.

2005E~2006E from BNP report March 7 2005)

A-9
NOAH TECHNOLOGY

Industry Sector: Electric English learning Investment Cost: $15.0 million

product Realized Proceeds: 0
Location: China Unrealized Value: $15.0 million
Company Stage: Expansion Multiple of Capital Invested: 1.0x
Investment Date: 2004 Gross IRR: NA
Investment Status: Unrealized

Business and Investment Description:

• Designs, manufactures and distributes English/Chinese electronic learning products and contents
• No 2 player with 22% market share in electronic English dictionaries
• Head office in Shenzhen with approximately 700 employees and 100 engineers
• Low cost manufacturer: propriety software and low cost team
• Strong distribution and channel management capability
• Founded in 1999 by 3 local entrepreneurs, 2 of whom were classmates and graduated from Tsinghua
University

Investment Thesis:
• Capture middle class and their spending on children’s education
• A large addressable market – 200+ million student population
• Market leader with proprietary technology, low cost base and strong distribution network in 26 cities
in China
• Acquisition of US or European company to internationalize its business
• Potential to become the “Leapfrog” of China

Role and Value-add of the Team:

• Sourced and led the deal. Member of the Board
• Strengthened financial reporting and internal controls
• Assisted in the expansion of overseas market
• Assisted in selection and evaluation of potential acquisition targets
• Assisted entrepreneurs in staying focused on core business

A-10
 CHINAHR.COM

Industry Sector: Online job recruitment Investment Cost: $0.6 million

Location: China Realized Proceeds: $13.6 million
Company Stage: Early Unrealized Value: $52.6 million
Investment Date: 2000 Multiple of Capital Invested: 105.0x
Investment Status: Partially Realized Gross IRR: NA

Business and Investment Description:

• The leading online recruitment company in China
• Over 3 million registered job seekers with net monthly increase of 160,000
• Headquartered in Beijing with nationwide coverage of 11 branch offices and over 800 employees
• Online revenue growth of 80% in 2005
• Monster Worldwide strategically purchased 40% equity for $50 million

Investment Thesis:
• Simple and easy to understand business with decent market size
• One of the Internet models that is highly profitable and scalable with no need to create content or
carry physical goods
• One of the top 3 players with a sign of strong growth momentum
• Trustworthy founder with good business sense and a detail oriented and cost conscious style

Role and Value-add of the Team:

• Sourced and closed the deal as angel investor. Chaired the Board since 2000
• Helped the company go through intense growing pains, from 3 to 800 employees and to build a
leading market position within 5 years
• Played a leading role in all major decisions: strategy, hiring, sales and marketing, products,
expansion, etc.
• Changed CEOs 2 times, brought in the “Huawei” team and built the “wolf’ culture
• Grew the revenue by more than 80% with the Huawei team and new sales system
• Brought in Monster.com as strategic investor, led negotiations and closed the deal
• Monitored post investment integration and learned from Monster very quickly

Financial Performance:

(US$ million) 1999 2000 2001 2002 2003 2004 2005E 2006E 2007E

Sales 0.14 1.6 2.2 3.3 4.4 7.2 12.6 21.4 36.3
Sales Growth % 1021% 40% 50% 33% 63% 74% 80% 80%
EBITDA 0.01 (1.7) (1.4) (0.1) 0.8 0.2 (3.3) 1.6 7.9
Net Profit 0.01 (1.7) (1.5) (0.2) 0.6 0.0 (3.7) 1.1 7.3

(Source: 1999-2000 from management accounts. 2001-2003 from Deloitte & Touche reports.
2004-2007 from Management accounts and budget)

A-11
 SCHEDULE B

CERTAIN SECURITIES LAW LEGENDS

NOTICE TO RESIDENTS OF FLORIDA

A purchaser (other than an institutional investor described in section 517.061(7), Fla. Stat.) who accepts an offer to purchase securities
exempted from registration by section 517.061(11), Fla. Stat., may void such purchase within a period of three (3) days after (a) he first
tenders consideration to the issuer, its agent or an escrow agent unless sales are made to fewer than five (5) purchasers in Florida (not
counting those institutional investors described in section 517.061(7)).

NOTICE TO RESIDENTS OF ARGENTINA

The Interests will not be publicly offered in Argentina. Therefore, this Memorandum has not been, and will not be, registered with the
Comisión Nacional de Valores. This offer does not constitute a public offering of securities within the scope of the Argentine Securities
Law N° 17.811. This Memorandum and other offering materials relating to the offer of the Interests are being supplied only to those
investors who have expressly requested it. They are strictly confidential and may not be distributed to any person or entity other than the
recipients hereof.

NOTICE TO RESIDENTS OF AUSTRALIA

The offer of the Interests made by way of this Memorandum is made in circumstances under which no disclosure is required under
Chapter 6D or Chapter 7 (as the case may be) of the Corporations Act. Nothing in this Memorandum purports to be an offer to a person
to whom disclosure would be required under Chapter 6D or Chapter 7 of the Corporations Act. In addition, the Fund is not a registered
scheme, as defined in the Corporations Act and this Memorandum will not be lodged with the Australian Securities and Investments
Commission.

NOTICE TO RESIDENTS OF AUSTRIA

The Interests are offered or sold on a private placement basis. The form and the content of this Memorandum do not comply with the
Austrian law for public offering of interests in foreign funds. Any public offering of the Interests to individuals and/or legal entities in
Austria is not permitted.

NOTICE TO RESIDENTS OF BAHRAIN

All applications for investment should be received, and any allotments should be made, in each case from outside Bahrain. This
Memorandum has been prepared for private information purposes of intended investors only who will be high net worth individuals and
institutions. It may not be used for and shall not be deemed a public offering of the Interests. The Bahrain Monetary Agency has not
approved any offering of the Interests. Accordingly, the Interests may not be offered or sold in Bahrain or to residents thereof except as
permitted by Bahrain law.

NOTICE TO RESIDENTS OF BELGIUM

The Fund has not been and will not be registered with the Belgian Banking, Finance and Insurance Commission (Commissie voor het
Bank Financie Assurantiewezen - en Financiewezen / Commission bancaire financière et des assurances) as a foreign collective
investment institution under Article 137 of the Belgian Law of December 4, 1990, on financial transactions and financial markets. The
offering in Belgium has not been and will not be notified to the Belgian Banking and Finance Commission. This Memorandum has not
been and will not be approved by the Belgian Banking and Finance Commission. The Interests shall, whether directly or indirectly, be
offered, sold, transferred or delivered in Belgium (i) only to those investors referred to in Article 3, 2° of the Belgian Royal Decree of July
7, 1999, on the public character of financial transactions, acting for their own account, or (ii) subject to the restriction of a minimum
investment of €250,000 per investor.

This Memorandum has been issued to the intended recipient for personal use only and exclusively for the purposes of the offering.
Therefore, it may not be used for any other purpose or passed on to any other person in Belgium.

NOTICE TO RESIDENTS OF CANADA PROVINCES OF BRITISH COLUMBIA, ONTARIO AND QUEBEC

This Memorandum constitutes an offering of the Interests only in those jurisdictions and to those persons where and to whom they may
be lawfully offered for sale, and therein only by persons permitted to sell such securities. The Fund has not filed a prospectus with any
securities commission or similar authority in Canada in respect of the Interests and accordingly, the Interests are not qualified for sale in
Canada and may not be offered or sold directly or indirectly in Canada except pursuant to an exemption from the prospectus and
registration requirements of Canadian securities laws. The offering of Interests in Canada is being made solely by this Memorandum and
no person has been authorized to give any information or to make any representation other than those contained in this Memorandum.
No securities commission or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the
Interests, and any representation to the contrary is an offense.

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This Memorandum is not, and under no circumstances is to be construed as, an advertisement or a public offering of the Interests in
Canada. The information contained in this Memorandum is furnished on a confidential basis to prospective investors solely to enable
prospective investors to evaluate the Interests. By accepting delivery of this Memorandum, prospective investors agree that that they will
not transmit, reproduce or otherwise make this Memorandum, or any information contained in it, available to any other person (other than
those persons, if any, retained by a prospective purchaser to advise such prospective purchaser with respect to the Interests) without the
prior written consent of the Fund.

All dollar amounts in this Memorandum are expressed in U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar and the
Canadian dollar will affect the Canadian dollar equivalent of the offering price of the Interests and the financial information contained
herein. In addition, the financial information contained herein has not been prepared in accordance with Canadian generally accepted
accounting principles.

Purchasers’ Representations, Acknowledgements and Covenants

Confirmations of the acceptance of offers to purchase Interests will be sent to purchasers in Canada who have not withdrawn their offers
to purchase prior to the issuance of such confirmations. Each purchaser of Interests in Canada who receives a purchase confirmation,
by the purchaser’s receipt thereof, represents to the Fund, the General Partner and any dealer, if any, from whom such purchase
confirmation is received that (a) such purchaser is a person or company to which Interests may be sold without the benefit of a
prospectus qualified under applicable provincial securities laws; (b) to the knowledge of such purchaser, the sale of Interests was not
accompanied by any advertisement in printed media of general and regular paid circulation, radio or television; (c) such purchaser has
reviewed the terms referred to below under the heading “Resale Restrictions”; (d) where required by applicable Canadian securities law,
such purchaser is purchasing as principal and not as agent; and (e) if such purchaser is resident in the Province of Ontario, such
purchaser is an “accredited investor” as such term is defined in section 1.1 of Ontario Securities Commission Rule 45-501 – Exempt
Distributions. In addition, each purchaser in Canada acknowledges that its name and other specified information, including information
pertaining to the Interests acquired by such purchaser, may be disclosed to Canadian securities regulatory authorities and become
available to the public in accordance with the requirements of applicable Canadian securities laws and consents to the disclosure of this
information.

Resale Restrictions

The distribution of Interests in Canada is being made on a private placement basis. Accordingly, any resale of the Interests must be
made in accordance with an exemption from the registration and prospectus requirements of applicable securities laws, which vary
depending on the province. A resale of Interests made pursuant to Multilateral Instrument 45-102 – Resale of Securities of the Canadian
Securities Administrators may require as a pre-condition, among other things, that any certificate representing the Interests, or an
ownership statement issued under a direct registration or other electronic book-entry system acceptable to the applicable regulator, bear
a legend respecting the restrictions on the transfer of the Interests. The Fund, the General Partner or the Manager are not in any manner
responsible for ensuring compliance by purchasers with any resale restrictions. Purchasers of Interests are advised to seek legal advice
prior to any resale of Interests.

Enforcement of Legal Rights

All of the Fund’s, General Partner’s and Manager’s directors and officers may be located outside Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada upon the Fund, its General Partner, the Manager or their
directors or officers. All or a substantial portion of the assets of the Fund, the General Partner, the Manager and such persons may be
located outside Canada and, as a result, it may not be possible to satisfy a judgment against the Fund, the General Partner, the Manager
or such persons in Canada or to enforce a judgment obtained in Canadian courts against the Fund, the General Partner, the Manager or
such persons outside Canada.

Contractual and/or Statutory Rights of Action

Securities legislation in certain of the Canadian jurisdictions requires purchasers to be provided with a remedy for rescission or damages,
or both, in addition to and not in derogation from any other right they may have at law, where an offering memorandum and any
amendment to it contains a misrepresentation. These remedies must be exercised by the purchaser within the time limits prescribed by
the applicable securities legislation. Purchasers should refer to the applicable provisions of the securities legislation for the complete text
of these rights or consult with a legal adviser.

The applicable contractual and/or statutory rights are summarized below. The summary is subject to the express provisions of the
applicable provincial securities laws and the regulations and rules thereunder and reference is made thereto for the complete text of such
provisions.

ONTARIO

Purchasers in Ontario to whom this Memorandum is delivered and who purchase Interests in reliance on the prospectus exemption
provided by section 2.3 of Ontario Securities Commission Rule 45-501 are hereby granted the following rights:

In the event that this Memorandum or any amendment thereto delivered to a purchaser of Interests in Ontario contains an untrue
statement of a material fact or omits to state a material fact that is required to be stated or that is necessary to make any statement
therein not misleading in the light of the circumstances in which it was made (herein called a “misrepresentation”) and it was a

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misrepresentation at the time of purchase, the purchaser will be deemed to have relied upon the misrepresentation and will, subject as
hereinafter provided, have a right of action against the Fund for damages, or, while still the owner of the Interests purchased by that
purchaser, for rescission, in which case, if the purchaser elects to exercise the right of rescission, the purchaser will have no right of
action for damages against the Fund, provided that:

a. The right of action for rescission will be exercisable by a purchaser only if the purchaser gives notice to the Fund not later
than 180 days after the date of the transaction that gave rise to the cause of action;

b. The right of action for damages or any other action other than the right of action for rescission will be exercisable by a
purchaser only if the purchaser gives notice to the Fund not later than the earlier of (i) 180 days after the purchaser had
knowledge of the facts giving rise to the cause of action or (ii) three years after the date of the transaction that gave rise to
the cause of action;

c. The Fund will not be liable if it proves that the purchaser purchased the Interests with knowledge of the misrepresentation;

d. In the case of an action for damages, the Fund will not be liable for all or any portion of the damages that it proves does
not represent the depreciation in value of the Interests as a result of the misrepresentation relied upon; and

e. In no case will the amount recoverable in any action exceed the price at which the Interests were sold to purchaser.

The statutory rights discussed above are in addition to and without derogation from any other right the purchaser may have at law.

QUÉBEC

In Québec, every person who has subscribed for securities pursuant to this Memorandum may, in the event that this Memorandum
contains a misrepresentation, apply to have the contract rescinded or the price revised, without prejudice to his or her claim for damages,
provided that no action may be commenced to enforce such right unless the right is exercised:

a. In the case of rescission or revision of the price, within one year from the date of the transaction; and

b. In the case of damages, within one year of the date on which the person acquired knowledge of the facts giving rise to the
action, except upon proof that the plaintiff acquired such knowledge more than one year after the date of the transaction
as a result of the negligence of the plaintiff.

In an action for rescission or revision of the price or damages against the issuer, the defendant may defeat the application only if it is
proved that the plaintiff knew, at the time of the transaction, of the alleged misrepresentation.

BRITISH COLUMBIA

In the event that this Memorandum or any amendment thereto delivered to a purchaser of Interests in British Columbia contains an
untrue statement of a material fact or omits to state a material fact that is required to be stated or is necessary in order to prevent any
statement that is being made from not being false or misleading in the circumstances in which it was made (herein called a
“misrepresentation”) and it was a misrepresentation at the time of purchase, the purchaser will be deemed to have relied upon the
misrepresentation and will, subject as hereinafter provided, have a right of action against the Fund for damages, or, while still the owner
of the Interests purchased by that purchaser, for rescission, in which case, if the purchaser elects to exercise the right of rescission, the
purchaser will have no right of action for damages against the Fund, provided that:

a. The right of action for rescission or damages is enforceable by a purchaser on notice by the purchaser to the Fund on or
before the 90th day after the date on which payment is made for Interests or on which the initial payment was made for
the Interests, if payments subsequent to the initial payment are made under a contractual commitment entered into
before, or concurrently with, the initial payment;

b. A purchaser will not be entitled to commence an action to enforce a right: (i) in the case of an action for rescission, more
than 180 days after the date of the transaction that gave rise to the cause of action; or (ii) in the case of an action for
damages, more than the earlier of 180 days after the date the purchaser first had knowledge of the facts that gave rise to
the cause of action or three years from the date of the transaction that gave rise to the cause of action;

c. The Fund will not be liable if it proves that the purchaser purchased the Interests with knowledge of the
misrepresentation;

d. In the case of an action for damages, the Fund will not be liable for all or any portion of the damages that it proves does
not represent the depreciation in value of the Interests as a result of the misrepresentation relied upon; and

e. In no case will the amount recoverable in any action exceed the price at which the Interests were sold to the purchaser.

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The contractual rights discussed above are in addition to and without derogation from any other rights or remedies available at law to the
purchaser.

Certain Canadian Income Tax Considerations

Prospective purchasers of Interests should consult their own tax advisers with respect to any taxes eligible in connection with the
acquisition, holding or disposition of Interests. It is recommended that tax advisers be employed in Canada, as there are a number of
substantive Canadian tax compliance requirements for Canadian investors.

NOTICE TO RESIDENTS OF THE CAYMAN ISLANDS

Interests may be beneficially owned by persons resident, domiciled, established, incorporated or registered pursuant to the laws of the
Cayman Islands. The Fund, however, will not undertake business with the public in the Cayman Islands other than so far as may be
necessary for the carrying on of the business of the Fund exterior to the Islands. “Public” for these purposes does not include any
exempted or ordinary non-resident company registered under the Companies Law or a foreign company registered pursuant to part IX of
the Companies Law or any such company acting as general partner of a partnership registered pursuant to section 9(1) of the Exempted
Limited Partnership Law or any director or officer of the same acting in such capacity or the trustee of any trust registered or capable of
registration pursuant to section 70 of the Trusts Laws.

NOTICE TO RESIDENTS OF DENMARK

This Memorandum has not been and will not be filed with the Danish Securities Council and the marketing and offering of Interests will be
made to persons in Denmark pursuant to one or more exemptions set forth in Executive Order No. 166 of March 13, 2003 on
Prospectuses at the First Public Offer of Certain Securities.

NOTICE TO RESIDENTS OF FINLAND

This Memorandum has been prepared for private information purposes and has not been distributed to more than 100 Finnish residents.
It may not be used for, and shall not be deemed to be, a public offering of the Interests. It may not be used for, and shall not be deemed
to be, the marketing, issuance or offering of securities to the public in Finland and, therefore, the Finnish Securities Market Act (495/89,
as amended) is not applicable. The Finnish Financial Supervision Authority (Rahoitustarkastus) has not authorized any offering for the
subscription of the Interests; accordingly, the Interests may not be offered or sold in Finland or to Finnish residents except as permitted
by Finnish law. This Memorandum is strictly for private use by its holder and may not be passed on to third parties or otherwise
distributed publicly.

This Memorandum shall not, in addition to everything else stated and excluded herein, be considered to constitute an offer under the
Finnish Act on Contracts (13.6.1929/228, as amended). Additionally, no subscription for or purchase of Interests as presented in this
Memorandum shall be governed by the Finnish Act on Trade of Goods (27.3.1987/355, as amended).

NOTICE TO RESIDENTS OF FRANCE

The Fund has not been authorized and this Memorandum has not been approved by the Autorité des Marchés Financiers or any other
French authority. No marketing of the Interests has been made on French territory, and this Memorandum and any other offering
materials relating to the Fund are being provided only at the request of prospective investors. This Memorandum and any other offering
materials are strictly confidential and may not be distributed to any person or entity other than the recipients hereof.

NOTICE TO RESIDENTS OF GERMANY

This Memorandum has not been submitted to, nor has it been approved by, the Bundesanstalt für Finanzdienstleistungsaufsicht, the
German financial services supervisory authority. The Interests may not be distributed by way of a public offering in Germany, and this
Memorandum and any other document relating to the Interests, as well as any information contained therein, may not be supplied to the
public in Germany or used in connection with any public offer for the subscription of Interests in Germany. This Memorandum and any
other offering materials relating to the offer of the Interests are strictly confidential and may not be distributed to any person or entity other
than the designated recipients hereof.

NOTICE TO RESIDENTS OF GREECE

The Fund has not been approved by the Greek Capital Market Commission for distribution in Greece. This Memorandum and the
information contained herein do not and shall not be deemed to constitute an invitation to the public in Greece to purchase Interests in
the Fund. Interests in the Fund may not be distributed, offered or in any way sold in Greece except as permitted by Greek Law. The
Fund does not have a guaranteed performance and past returns do not guarantee future ones.

NOTICE TO RESIDENTS OF GUERNSEY

Interests are not offered to the public in the Bailiwick of Guernsey. Persons resident in Guernsey may only apply for Interests in the Fund
pursuant to private placement arrangements. This Memorandum has not been filed with the Guernsey Financial Services Commission

B-4
pursuant to the Control of Borrowing (Bailiwick of Guernsey) Ordinances 1959 to 1989 and no authorizations in respect of the Protection
of Investors (Bailiwick of Guernsey) Law 1987 have been issued by the Guernsey Financial Services Commission in respect of it.

NOTICE TO RESIDENTS OF HONG KONG

PRIVATE AND CONFIDENTIAL: This Memorandum relates to a private placement and does not constitute an offer or solicitation to the
public in Hong Kong to subscribe to the Interests. No steps have been taken to register this Memorandum in Hong Kong. The offer of
Interests is personal to the person to whom this Memorandum has been delivered and subscription will only be accepted from such
person. This Memorandum may not be used, copied, reproduced or distributed in whole or in part by the recipient to any other person.

NOTICE TO RESIDENTS OF INDONESIA

This Memorandum is not a public offering within the meaning of the Indonesian Capital Market Law, Law no. 8 of 1995. The distribution
of this Memorandum and the offer, sale and delivery of the Interests may be restricted by the Indonesian Capital Market Law. Persons
into whose possession this Memorandum comes are required to inform themselves about, and to observe, any such restrictions. This
Memorandum may not be used for the purposes of an offer or an invitation in any circumstances in which such offer or invitation is not
authorized.

NOTICE TO RESIDENTS OF ITALY

The Fund is not a UCITS fund. It has not been nor will it be registered with the Italian authorities. The Interests are offered upon the
express request of the investor, who has directly contacted the Fund or its sponsor outside of Italy at the investor’s own initiative. No
active marketing of the Fund has been carried out in Italy and this Memorandum has been sent to the investor at the investor’s request.
The investor acknowledges the above and hereby agrees not to transfer or otherwise resell any Interests. This Memorandum and other
offering materials relating to the offer of Interests are strictly confidential and may not be distributed to any person or entity other than the
recipients hereof.

NOTICE TO RESIDENTS OF JAPAN

No registration pursuant to article 4, paragraph 1 of the Securities and Exchange Law (the “Law”) of Japan has been made or will be
made with respect to the solicitation of the application for the acquisition of the Interests on the ground that article 2, paragraph 3, item 2-
(ii) thereof is applied to such solicitation.

No transfer of the Interests may be made in Japan except for the transfer by each investor of his/her/its Interests to only one person, and
such transfer restriction is set forth in the limited partnership agreement for the Fund. The offering of the Interests may be made to
qualified institutional investors (“QIIs”) as defined in article 2, paragraph 3, item 1 of the Law and article 4 of the cabinet order regarding
definitions under article 2 of the Law and no transfer of such Interests may be made to persons other than QIIs, and such transfer
restriction is set forth in the limited partnership agreement for the Fund.

This Memorandum is confidential and is intended solely for the use of its recipient. Any duplication or redistribution of this Memorandum
is prohibited. The recipient of this Memorandum, by accepting delivery thereof, agrees to return it and all related documents to the Fund
or its placement agent if the recipient elects not to purchase any of the Interests offered hereby or if requested earlier by the Fund or its
placement agent. Neither the return of the principal amount invested nor the distribution of profit from the investment is guaranteed. An
investment in the Interests involves certain risks of loss caused by fluctuation of interest rates, currency and other market factors, or the
credit risk of the counterparties or relevant parties thereof. Prospective investors should read the terms of the investment carefully, in
particular, those relating to limitations on the period in which rights relating to such investment can be exercised.

NOTICE TO RESIDENTS OF KUWAIT

This offer is aimed at institutions and sophisticated, high net worth individuals only, this Memorandum is being sent at the written request
of the investor, no public offering of the Interests is being made in Kuwait, and no mass-media means of contact are being used and the
Interests will be sold outside of Kuwait.

NOTICE TO RESIDENTS OF LUXEMBOURG

The Interests may not be publicly offered or sold in the Grand-Duchy of Luxembourg, except for Interests for which the requirements of
Luxembourg law concerning public offerings of securities have been met. The Interests are offered to a limited number of investors or to
sophisticated investors, in all cases under circumstances designed to preclude a distribution that would be other than a private
placement. This Memorandum may not be reproduced or used for any purpose, or furnished to any person other than those to whom
copies have been sent.

NOTICE TO RESIDENTS OF MEXICO

The Interests have not been and will not be registered with the Securities Section of the National Registry of Securities (Registro
Nacional de Valores) maintained by the National Banking and Securities Commission of Mexico (Comisión Nacional Bancaria y de
Valores). This offer does not constitute a public offer or exchange under the Mexican Securities Act (Ley del Mercado de Valores).

B-5
NOTICE TO RESIDENTS OF MONACO

This Memorandum is personal to the recipient and has been prepared solely for use in connection with a private placement of the
Interests. Distribution of this Memorandum to any person other than the recipient and those persons, if any, retained to advise such
recipient with respect to the offer and sale of the Interests is unauthorized, and any disclosure of any of its contents is prohibited. Each
recipient, by accepting delivery of this Memorandum, agrees to the foregoing and agrees to make no copies of this Memorandum.

This Memorandum does not constitute an offer to sell, or any solicitation of an offer to buy, any Interests by any person in any jurisdiction
in which it is unlawful for such person to make such an offering or solicitation. Neither the delivery of this Memorandum nor any sale
made hereunder of the Interests shall under any circumstances imply that the information herein is correct as of any date subsequent to
the date hereof. If the recipient does not purchase the Interests, or this offering is terminated, the recipient agrees to return this
Memorandum and all documents delivered herewith to the Fund.

NOTICE TO RESIDENTS OF THE NETHERLANDS

The Interests may not be solicited, acquired or offered in or from the Netherlands and this Memorandum may not be circulated in the
Netherlands to any individual or legal entity as part of their initial distribution or at any time thereafter, other than to individuals or legal
entities who deal or invest in securities or other investment assets in the course of their occupation or business, including banks,
securities broker dealers, and other institutional investors who invest in securities or other investment assets (hereinafter referred to as
“professional investors”). In the event of a solicitation, acquisition or offering of Interests made to or by professional investors which is,
therefore, exempt from the general prohibition as contained in the Act on the Supervision of Investment Institutions (“Wet toezicht
beleggingsinstellingen”), no subsequent offering may be made of such Interests in a secondary offering by such professional investors to
individuals or entities other than professional investors.

NOTICE TO RESIDENTS OF NEW ZEALAND

No offeree of the Interests shall directly or indirectly offer, sell or deliver any Interests, or distribute this Memorandum or any
advertisement in relation to any offer of the Interests, in New Zealand other than to persons whose principal business is the investment of
money or who, in the course of and for the purposes of their business, habitually invest money or who in all the circumstances can
properly be regarded as having been selected otherwise than as members of the public or in other circumstances where there is no
contravention of the Securities Act 1978 of New Zealand.

NOTICE TO RESIDENTS OF NORWAY

The Fund falls outside the scope of the Investment Partnership Act of 1981 and, therefore, is not subject to supervision from the Financial
Supervisory Authority of Norway (Kredittilsynet). The Interests are not subject to the Securities Trading Act of 1997.

The contents of this Memorandum have not been approved or registered with the Oslo Børs (the Oslo Stock Exchange) or the Norwegian
company registry.

Each investor should carefully consider individual tax questions before investing in the Fund. This Memorandum should not in any way
be copied or otherwise distributed by the recipient.

No offering of the Interests is being made in Norway. This Memorandum is being sent at the express request of the recipient.

Each investor should carefully consider individual tax questions before investing in the Fund. This Memorandum should not in any way
be copied or otherwise distributed by the recipient.

NOTICE TO RESIDENTS OF OMAN

This Memorandum is being sent at the request of the investor in Oman and should not be distributed to any person in Oman other than
its intended recipient without the prior consent of the Capital Market Authority.

NOTICE TO RESIDENTS OF SAUDI ARABIA

The offer of Interests is aimed at professional and sophisticated offerees only, this Memorandum is being sent at the request of the
investor, no public offering of the Interests is being made in Saudi Arabia, no mass-media means of contact are being used and the
transaction will be concluded outside Saudi Arabia.

NOTICE TO RESIDENTS OF SINGAPORE

This Memorandum is confidential. It is for the exclusive use of the person to whom it is addressed. Any offer or invitation in respect of
Interests can be accepted only by such person and is not transferable. This Memorandum may not be distributed or given to any person
other than the person to whom it is addressed and should be returned if such person decides not to purchase any Interests. This
Memorandum should not be reproduced, in whole or in part.

B-6
This Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Memorandum
and any other document or material in connection with the offer or sale of, or invitation for subscription for or purchase of, Interests may
not be circulated or distributed, nor may any Interests be offered or sold, or be made the subject of an invitation for subscription or
purchase, whether directly or indirectly, to persons in Singapore other than under circumstances in which such offer, sale or invitation
does not constitute an offer or sale of, or an invitation for the subscription for or purchase of, the Interests to the public in Singapore.

NOTICE TO RESIDENTS OF SPAIN

The placement of the Interests has not been and will not be authorized as a private or public offering by the Spanish Securities
Commission (Comisión Nacional del Mercado de Valores). No marketing or publicity activities will be carried out in Spain and, therefore,
no action, whether direct or indirect, which could be considered as a marketing or promotional activity (including the provision of any
documentation and/or advertising materials to any third party) may be taken. The recipient hereof will be liable for any such action and
neither the Fund nor its agents will assume any liability in this respect. The Fund is not subject to the laws of Spain and hence the legal,
tax and economic concepts used may be different from Spanish concepts. For this reason, prospective investors should obtain
appropriate advice before making any investment in the Fund.

NOTICE TO RESIDENTS OF SWEDEN

This Memorandum has not been nor will it be registered with or approved by Finansinspektionen (the Swedish Financial Supervisory
Authority). Accordingly, this Memorandum may not be made available, nor may the Interests offered hereunder be marketed or offered
for sale, in Sweden, other than under circumstances which are deemed not to be an offer to the public in Sweden under the Swedish
Financial Instruments Trading Act (1991:980) nor to constitute fund operations in Sweden under the Swedish Investment Funds Act
(2004:46).

NOTICE TO RESIDENTS OF SWITZERLAND

The Fund has not been authorized by the Swiss Federal Banking Commission as a foreign investment fund under Article 45 of the Swiss
Investment Partnership Act of March 18, 1994. Accordingly, the Interests offered hereby may not be offered to the public in or from
Switzerland. The Interests and this Memorandum may, however, be distributed in Switzerland to a maximum number of 20 private
investors during a business year and to institutional investors with professional treasury management (“investisseurs institutionnels dont
la trésorerie est gérée à titre professionnel”) in circumstances such that there is no public offer. This Memorandum and any other
material relating to the Interests are strictly confidential and may not be distributed to any person or entity other than its recipients.

NOTICE TO RESIDENTS OF TAIWAN

There exist restrictions on the offering, distribution, transfer or resale of the Interests within Taiwan, Republic of China. The Interests
cannot be offered, distributed or resold to the public within the Republic of China without prior approval from the regulatory authorities in
the Republic of China.

NOTICE TO RESIDENTS OF UNITED ARAB EMIRATES

The Interests will be sold outside the United Arab Emirates. Neither the Central Bank of the United Arab Emirates nor any other
regulatory agency in the United Arab Emirates has registered the Interests or approved the offering materials of the Fund.

NOTICE TO RESIDENTS OF UNITED KINGDOM

The Interests are not to be offered to persons in the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public
Offers of Securities Regulations 1995. This Memorandum is directed only at persons who (i) are outside the United Kingdom, (ii) fall
within Article 19(5) (“investment professionals”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001, (iii) fall
within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2001 or (iv) are persons to whom this Memorandum may otherwise lawfully be issued or passed on (all
of the persons in (i) to (iv) being referred to together as “relevant persons”). This communication must not be acted on or relied on by
persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to
relevant persons and will be engaged in only with relevant persons. Recipients of this Memorandum are not permitted to transmit it to
any other person.

B-7