Satori Fund Ii L.P.: Copy No. Furnished To

Document ID: b29947af-c046-47d7-832d-ffc1a1c6ca08
Copy No. Furnished to:
SATORI FUND II L.P.

A Delaware Limited Partnership
CONFIDENTIAL MEMORANDUM
January 2021
General Partner:
AlphaOne Satori Management, LLC
44 W. Gay Street, Suite 300
West Chester, PA 19380
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CONFIDENTIAL MEMORANDUM
Satori Fund II L.P.

c/o AlphaOne Satori Management, LLC
44 W. Gay Street, Suite 300
West Chester, PA 19380
Satori Fund II L.P. (the “Partnership”) is a Delaware limited partnership formed in April
2020 to operate as a private investment partnership for the benefit of U.S. taxable investors and
makes use of the exemption afforded by Section 3(c)(1) of the Investment Company Act of 1940
as amended (the “1940 Act”).
The Partnership will generally operate side-by-side with the existing Satori Fund I L.P.
and Satori Master Fund Ltd., that were designed for Qualified Purchasers and makes use of the
allowances afforded by Section 3(c)(7) of the 1940 Act.
The Partnership’s investment objective is to achieve long-term capital appreciation. The

Partnership pursues this objective by primarily investing (both long and short) in the securities
(including debt, derivatives and equity) of companies across a broad range of industries primarily
in the United States but also internationally. The subsectors that are likely to have a greater
focus within the Partnership include commodities, consumer, emerging/green technology,
energy, financial, industrial, media, REIT, retailing, services, technology, telecom and
transportation. The Partnership may invest in currencies to lower currency specific risk,
diversify the portfolio and generate capital gains. Investments may also be made in debt related
instruments that are related to future expectations for economic growth and inflation. The
Partnership may also invest in other opportunistic investments not contemplated herein. There
can be no assurance that the investment program of the Partnership will be achieved.
AlphaOne Satori Management, LLC (the “General Partner”), a Delaware limited liability
company formed in December 2008, the managing member of which is STP Investment
Partners, LLC, serves as the general partner of the Partnership. The General Partner has ultimate
responsibility for the management, operations and the investment decisions made on behalf of
the Partnership.
STP Investment Partners, LLC (the “Investment Manager”), a Pennsylvania limited

liability company formed in September 2019 and owned by Murray Investments, LLC, serves as
the investment manager to the Partnership and is responsible for the day-to-day investment
activities of the Partnership, subject to the overall supervision of the General Partner. The
Investment Manager is a SEC filed Exempt Reporting Adviser. The Investment Manager also
serves as the investment manager to various other investment vehicles, including Satori Fund I
L.P. and Satori Master Fund Ltd.
This Confidential Memorandum relates to offerings of limited partner interests in the

Partnership (the “Interests”) to certain investors, each of whom, if accepted, will become a
limited partner of the Partnership (each, a “Limited Partner” and, collectively with the General
Partner, the “Partners”).
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Each prospective Limited Partner is invited to meet with representatives of the General
Partner and Investment Manager to discuss with, ask questions of, and receive answers
concerning the terms and conditions of this offering of Interests, and to obtain any additional
information, to the extent they possess such information or can acquire it without unreasonable
effort or expense, necessary to verify the information contained herein.
THE GENERAL PARTNER OF THIS PARTNERSHIP IS EXEMPT FROM

REGISTRATION WITH THE COMMODITY FUTURES TRADING COMMISSION AS
A COMMODITY POOL OPERATOR PURSUANT TO RULE 4.13(a)(3) BECAUSE IT
LIMITS THE PARTNERSHIP’S USE OF COMMODITY FUTURES CONTRACTS TO
CERTAIN PRESCRIBED LEVELS AT ALL TIMES. SINCE THE GENERAL
PARTNER IS NOT REGISTERED AS A COMMODITY POOL OPERATOR, IT IS NOT
SUBJECT TO THE RULES REQUIRING THE DELIVERY OF A DISCLOSURE
DOCUMENT OR A CERTIFIED ANNUAL REPORT TO PROSPECTIVE INVESTORS
AND INVESTORS, RESPECTIVELY.
THE INVESTMENT MANAGER IS ALSO EXEMPT FROM REGISTRATION

WITH THE CFTC AS A COMMODITY TRADING ADVISER PURSUANT TO
COMMODITY TRADING ACT RULE 4M(1).
INTERESTS ARE SUITABLE ONLY FOR SOPHISTICATED INVESTORS FOR

WHOM AN INVESTMENT IN THE PARTNERSHIP DOES NOT CONSTITUTE A
COMPLETE INVESTMENT PROGRAM AND THAT FULLY UNDERSTAND AND ARE
WILLING TO ASSUME THE RISKS INVOLVED IN THE PARTNERSHIP’S SPECIALIZED
INVESTMENT PROGRAM. THE INVESTMENT PRACTICES OF THE PARTNERSHIP BY
THEIR NATURE, MAY BE CONSIDERED TO INVOLVE A SUBSTANTIAL DEGREE OF
RISK. (See “Investment Program” and “Certain Risk Factors.”)
PROSPECTIVE LIMITED PARTNERS SHOULD CAREFULLY READ THIS

CONFIDENTIAL MEMORANDUM. HOWEVER, THE CONTENTS OF THIS
CONFIDENTIAL MEMORANDUM SHOULD NOT BE CONSIDERED TO BE LEGAL OR
TAX ADVICE, AND EACH PROSPECTIVE LIMITED PARTNER SHOULD CONSULT
WITH ITS OWN COUNSEL AND ADVISERS AS TO ALL MATTERS CONCERNING AN
INVESTMENT IN THE INTERESTS. THERE WILL BE NO PUBLIC OFFERING OF THE
INTERESTS.
NO OFFER TO SELL (OR SOLICITATION OF AN OFFER TO BUY) IS BEING

MADE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD
BE UNLAWFUL.
THIS CONFIDENTIAL MEMORANDUM HAS BEEN PREPARED SOLELY FOR

THE INFORMATION OF THE PERSON TO WHOM IT HAS BEEN DELIVERED BY OR
ON BEHALF OF THE PARTNERSHIP AND SHOULD NOT BE REPRODUCED OR USED
FOR ANY OTHER PURPOSE. NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, EACH INVESTOR (AND EACH EMPLOYEE, REPRESENTATIVE OR
OTHER AGENT OF SUCH INVESTOR) MAY DISCLOSE TO ANY AND ALL PERSONS,
WITHOUT LIMITATION OF ANY KIND, THE TAX TREATMENT AND TAX
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STRUCTURE OF (I) THE PARTNERSHIP AND (II) ANY OF ITS TRANSACTIONS, AND
ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX ANALYSES)
THAT ARE PROVIDED TO SUCH INVESTOR RELATING TO SUCH TAX TREATMENT
AND TAX STRUCTURE. THIS CONFIDENTIAL MEMORANDUM IS ACCURATE AS OF
ITS DATE, AND NO REPRESENTATION OR WARRANTY IS MADE AS TO ITS
CONTINUED ACCURACY AFTER SUCH DATE.
THE PARTNERSHIP WILL NOT BE REGISTERED AS AN INVESTMENT

COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
“1940 ACT”). THE PARTNERSHIP RELIES ON AN EXCLUSION FROM REGISTRATION
PROVIDED IN SECTION 3(c)(1) OF THE 1940 ACT; AS A RESULT, THE PARTNERSHIP
MAY HAVE UP TO 100 COUNTED BENEFICIAL OWNERS, EACH OF WHICH WILL BE
AN INVESTOR IN THE PARTNERSHIP ALSO MUST BE AN “ACCREDITED INVESTOR”
AS THAT TERM IS DEFINED IN REGULATION D PROMULGATED UNDER THE
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND A “QUALIFIED CLIENT”
AS DEFINED IN AS DEFINED IN RULE 205-3 UNDER THE 1940 ACT. THE
SUBSCRIPTION DOCUMENTS FOR THE PARTNERSHIP CONTAIN QUESTIONS
RELATING TO THESE QUALIFICATIONS.
NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM WILL

BE EMPLOYED IN THE OFFERING OF THE INTERESTS EXCEPT FOR THIS
CONFIDENTIAL MEMORANDUM AND STATEMENTS CONTAINED HEREIN AND
SUCH OTHER MARKETING MATERIALS AS MAY BE APPROVED BY THE GENERAL
PARTNER. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY
REPRESENTATION, OR GIVE ANY INFORMATION, WITH RESPECT TO THE
INTERESTS, EXCEPT THE INFORMATION CONTAINED HEREIN AND IN SUCH
MARKETING MATERIALS.
IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY UPON

THEIR OWN EXAMINATION OF THE PARTNERSHIP AND THE TERMS OF THE
OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE INTERESTS
HAVE NEITHER BEEN FILED WITH, NOR APPROVED OR DISAPPROVED BY, THE
SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER GOVERNMENTAL
AGENCY OR REGULATORY AUTHORITY OR ANY NATIONAL SECURITIES
EXCHANGE. NO SUCH AGENCY, AUTHORITY OR EXCHANGE HAS PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS CONFIDENTIAL MEMORANDUM OR THE
MERITS OF AN INVESTMENT IN THE INTERESTS OFFERED HEREBY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THESE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY

AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM,
AND IN COMPLIANCE WITH THE TERMS OF THE AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF THE PARTNERSHIP. INVESTORS SHOULD
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BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF

THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. IT IS NOT
CONTEMPLATED THAT ANY SUCH REGISTRATION WILL BE EFFECTED, OR THAT
RELEVANT EXEMPTION PROVIDED BY REGULATIONS PROMULGATED UNDER
THE SECURITIES ACT WILL EVER BE AVAILABLE.
FOR FLORIDA RESIDENTS:

IF THE SECURITIES REFERRED TO HEREIN ARE SOLD TO, AND ACQUIRED BY, FIVE
(5) OR MORE FLORIDA RESIDENTS IN A TRANSACTION DEEMED EXEMPT UNDER
SECTION 517.061 OF THE FLORIDA SECURITIES ACT, EACH FLORIDA INVESTOR
MAY HAVE THE RIGHT TO WITHDRAW THE INVESTMENT WITHIN THREE (3) DAYS
AFTER THE FIRST TENDER OF CONSIDERATION MADE BY SUCH INVESTOR, OR
WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THIS PRIVILEGE IS
COMMUNICATED TO SUCH INVESTOR, WHICHEVER OCCURS LATER. AS SUCH,
PLEASE CONSIDER THIS PRIVILEGE EXTENDED AS OF THE DATE OF FIRST
TENDER OF CONSIDERATION.
* * * *
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TABLE OF CONTENTS
Page
SUMMARY OF TERMS .............................................................................................................. 1

THE PARTNERSHIP .................................................................................................................. 14
INVESTMENT PROGRAM ....................................................................................................... 14
THE GENERAL PARTNER ....................................................................................................... 16
THE INVESTMENT MANAGER .............................................................................................. 16
USE OF PROCEEDS .................................................................................................................. 17
MANAGEMENT FEE; EXPENSES........................................................................................... 17
ALLOCATION OF GAINS AND LOSSES; INCENTIVE ALLOCATION ............................. 19
NEW ISSUE ALLOCATIONS ................................................................................................... 20
WITHDRAWALS ....................................................................................................................... 20
CERTAIN RISK FACTORS ....................................................................................................... 22
OTHER ACTIVITIES OF THE GENERAL PARTNER AND THE INVESTMENT
MANAGER ................................................................................................................................. 35
BROKERAGE COMMISSIONS; TURNOVER ........................................................................ 37
ADMINISTRATOR .................................................................................................................... 38
FISCAL YEAR ............................................................................................................................ 39
LIMITED PARTNERSHIP AGREEMENT ............................................................................... 39
TAX ASPECTS ........................................................................................................................... 39
ERISA CONSIDERATIONS ...................................................................................................... 60
LIMITATIONS ON TRANSFERABILITY; SUITABILITY REQUIREMENTS ..................... 66
ANTI-MONEY LAUNDERING REGULATIONS .................................................................... 67
REPORTS TO PARTNERS ........................................................................................................ 67
AUDITORS ................................................................................................................................. 67
COUNSEL ................................................................................................................................... 68
ADDITIONAL INFORMATION ................................................................................................ 68
SUBSCRIPTION FOR INTERESTS .......................................................................................... 68
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SUMMARY OF TERMS
The following is a summary of the principal terms of Satori Fund II L.P. (the
“Partnership”). The following summary is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Confidential Memorandum and by the terms and
conditions of the Amended and Restated Limited Partnership Agreement of the Partnership (the
“Partnership Agreement”), which should be read carefully by any prospective investor before
investing.
THE PARTNERSHIP: Satori Fund II L.P. is a Delaware limited partnership formed in

April 2020 to operate as a private investment partnership for the
benefit of U.S. taxable investors. The Partnership generally
(depending on the availability of funds and investor interest)
makes its investments side-by-side with Satori Fund I L.P. and
Satori Master Fund Ltd. – entities that were designed for
Qualified Purchasers and make use of the exemption afforded by
Section 3(c)(7) of the 1940 Act.
INVESTMENT The Partnership’s investment objective is to achieve long-term

PROGRAM: capital appreciation. The Partnership pursues this objective by
primarily investing (both long and short) in the securities
(including debt, derivatives and equity) of companies across a
broad range of industries primarily in the United States but also
internationally. The subsectors that are likely to have a greater
focus within the Partnership include commodities, consumer,
emerging/green technology, energy, financial, industrial, media,
REIT, retailing, services, technology, telecom and transportation.
The Partnership may invest in currencies to lower currency
specific risk, diversify the portfolio and generate capital gains.
Investments may also be made in debt related instruments that are
related to future expectations for economic growth and inflation.
The Partnership may also invest in other opportunistic
investments not contemplated herein.
Investment decisions are based primarily on identifying catalysts

that the Investment Manager (as defined below) expects will
change an issuer’s earnings expectations relative to current
consensus and therefore drive movement in the stock price.
Given the increasingly cyclical nature of the U.S. and global
economies as they mature, the Investment Manager believes both
“bottom up” research as well as market timing especially in the
late stages or the early stages of a cycle have merit. Emphasis is
placed on developments, both positive and negative, that the
Investment Manager believes will generate attractive
opportunities on both the long and short side.
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The Partnership’s portfolio includes, without limitation, positions

primarily in securities, which will include equity and debt
securities (including debt securities convertible into equity
securities), warrants, options on stocks and indices, forward and
futures contracts, swaps, treasuries and exchange traded sector
and index funds (“ETFs”). The Partnership does not invest in
non-publicly traded securities (e.g., venture capital investments
and private placements). Cash balances that are not committed
are normally invested in high quality short-term debt instruments
of public or private issuers, in money market mutual funds or in a
non-interest bearing account.
There can be no assurance that the investment objective of

the Partnership will be achieved, and certain investment
practices to be employed by the Partnership can, in some
circumstances, substantially increase any adverse impact on
the Partnership’s portfolio. (See “Investment Program” and
“Certain Risk Factors.”)
LEVERAGE Leverage is utilized in the investment program of the Partnership,

either directly, when deemed appropriate by the Investment
Manager. While leverage presents opportunities for increasing
the total return on investments, it has the effect of potentially
increasing losses as well. Accordingly, any event which
adversely affects the value of an investment could be magnified
to the extent that leverage is utilized. The cumulative effect of
the use of leverage with respect to any investments in a market
that moves adversely to such investments could result in a
substantial loss, which would be greater than if the investments
were not leveraged. (See “Certain Risk Factors.”)
GENERAL PARTNER: AlphaOne Satori Management, LLC (the “General Partner”), a

Delaware limited liability company formed in December 2008,
serves as the general partner of the Partnership. The General
Partner has ultimate responsibility for the management,
operations and the investment decisions made on behalf of the
Partnership.
STP Investment Partners, LLC (“STP IP”) is the sole member of

the General Partner. STP Investment Partners was formed in
2019 with the intent of being a leading provider of specialty
investment products that address the capital preservation and
growth needs of high net worth individuals and families and
taxable and non-taxable institutions. (See “The General Partner”
and “The Investment Manager.”)
INVESTMENT STP Investment Partners, LLC (the “Investment Manager”), a
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MANAGER: Pennsylvania limited liability company formed in September

2019 and owned by Murray Investments, LLC, serves as the
investment manager to the Partnership and is responsible for the
day-to-day investment activities of the Partnership, subject to the
overall supervision of the General Partner. The Investment
Manager is a SEC filed Exempt Reporting Adviser. The
Investment Manager also serves as the investment manager to
various other investment vehicles, including Satori Fund I L.P.
and Satori Master Fund Ltd.
The portfolio manager for the Partnership is Mr. Daniel Niles.

(See “The Investment Manager.”)
INITIAL AND The minimum initial capital contribution by an investor (each, a

ADDITIONAL “Limited Partner” and together with the General Partner, the
CAPITAL “Partners”) is $250,000. Thereafter, the minimum additional
CONTRIBUTIONS; contribution is $100,000. The General Partner, in its sole
ADMISSION OF NEW discretion, may accept capital contributions of lesser amounts, but
PARTNERS: in no case will initial capital contributions be accepted for less
than $50,000. Partners may be admitted to the Partnership as of
the first Business Day of any month or at such other times as the
General Partner will determine in its sole discretion. A “Business
Day” means any day on which banks are open for business in
New York City.
The Partnership may, without providing prior notice to, or

receiving consent from, existing Limited Partners, issue
additional classes of Interests that are subject to different terms
including, without limitation, the Management Fee and Incentive
Allocation (as each such term is defined below), withdrawal
rights and minimum and additional subscription amounts, as
determined from time to time by the General Partner.
CAPITAL ACCOUNTS: The Partnership will determine a Limited Partner’s economic

interest in the Partnership by establishing a capital account for
each Limited Partner (each an “Account” or “Capital Account”).
The Partnership generally will credit a Limited Partner’s Capital
Account with: (i) such Limited Partner’s capital contribution that
established the Account, (ii) such Account’s pro rata share of the
Partnership’s economic profits, both realized and unrealized, and
(iii) any additional capital contributions made by such Limited
Partner, and debit such Account with (i) any distributions to or
withdrawals by such Limited Partner from such Account, (ii)
such Account’s pro rata share of the Partnership’s economic
losses, both realized and unrealized, (iii) such Account’s pro rata
share of the Partnership’s expenses, (iv) the Management Fees
charged against such Account and paid to the Investment
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Manager (discussed below), and (v) the Incentive Allocations

charged against such Account and allocated to the General
Partner (discussed below).
SALES CHARGES: Limited Partners may be required to pay a placement fee at the
time of purchase directly to a placement agent. Such fees will not
constitute assets of the Partnership. The Investment Manager
may also pay a placement fee to a placement agent based upon a
percentage of the Management Fee. If an investor is introduced
to the Partnership through a placement agent, the arrangement, if
any, with such placement agent will be disclosed to, and
acknowledged by, the subscriber.
FISCAL YEAR: The Partnership’s fiscal year is the 12-month period ending on
December 31. However, it is possible, although not anticipated,
that the Partnership’s taxable year end may change. In general,
the required taxable year of the Partnership will be based on the
tax years of the Partners.
MANAGEMENT FEE; The Partnership pays a monthly management fee (the

EXPENSES: “Management Fee”) to the Investment Manager equal to,
0.1666% (2.0% on an annualized basis) of the net asset value of
each such Partner’s Capital Account, determined as of the
beginning of each calendar month (prior to determination of the
Incentive Allocation (if applicable for such calendar month). The
Management Fee is calculated and paid in arrears.
In the sole discretion of the Investment Manager, the

Management Fee may be waived, reduced or calculated
differently with respect to certain Partners, including affiliates
and employees of the General Partner and the Investment
Manager. The General Partner’s Capital Account will not be
charged Management Fees.
In consideration for the Management Fee, the Investment

Manager provides office space and utilities; news, quotation and
computer equipment; software; and secretarial, clerical and other
personnel to the Partnership. The Investment Manager bears the
costs of providing such goods and services, and all of its own
overhead costs and expenses, except to the extent that any such
goods, services, costs and expenses related to research and
brokerage are provided through soft dollars generated by the
Partnership as permitted hereunder or borne by the Partnership as
described below
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The Partnership bears its own expenses, including, without

limitation, fees to the administrator to the Partnership, investment
related expenses such as brokerage commissions, research
expenses, interest on margin accounts and other indebtedness,
borrowing charges on securities sold short, custodial fees, bank
service fees, withholding and transfer fees, entity-level taxes,
clearing and settlement charges, professional fees (including,
without limitation, expenses of consultants and experts) relating
to investments, and other expenses related to the purchase, sale or
transmittal of investments, legal, accounting, audit and tax
preparation expenses, expenses related to the offering and sale of
Interests, and other similar expenses related to the Partnership
and extraordinary expenses. Such expenses (other than the
Management Fee) will be shared on a pro rata basis by all of the
Partners. To the extent that expenses to be borne by the
Partnership are paid by the General Partner (in excess of its
ratable share) or by the Investment Manager, the Partnership will
reimburse the General Partner or the Investment Manager, as the
case may be, for such expenses.
EXPENSE CAP: Other than trading and Extraordinary Expenses, the Investment
Manager has agreed to offset its Management Fee (in any given
calendar year) to the extent that expenses of the Partnership in
such calendar year exceed 0.5% of the average net asset value of
all Limited Partners’ Capital Accounts during such calendar year.
For these purposes, “Extraordinary Expenses” means any expense

incurred by the Partnership which is not a routine internal
operating expense of the Partnership (such as would be expected
in the course of the Partnership’s formation, ordinary
administration, annual audit, or routine legal needs).
Extraordinary Expenses includes (but is not limited to): any costs
associated with audits, proceedings before any governmental
bodies, litigation or threatened litigation, indemnification
obligations, and any other non-routine expense - - in each case
that alone or in the aggregate (along with related or connected
expenses) is expected by the Investment Manager to exceed
$10,000 in any calendar year.
ALLOCATION OF At the end of each accounting period of the Partnership, any net
GAINS AND LOSSES; capital appreciation or net capital depreciation is allocated to the
INCENTIVE Partners in proportion to their respective opening Capital Account
ALLOCATION: balances for such period.
Generally, at the end of each fiscal year of the Partnership, 20%

of any net realized and unrealized capital appreciation allocated
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to each Partner’s Capital Account for such fiscal year

(appropriately adjusted for withdrawals and after reducing net
capital appreciation for the Management Fee debited to each
Partner’s Capital Account) will be reallocated to the Capital
Account of the General Partner (the “Incentive Allocation”);
provided, however, that the net capital appreciation upon which
the calculation of the Incentive Allocation is based will be
reduced to the extent of any unrecovered balance remaining in the
Loss Recovery Account (as defined below) maintained on the
books and records of the Partnership for such Partner.
If a Partner makes a complete or partial withdrawal prior to year-

end, an Incentive Allocation will be determined and made at such
time with respect to such withdrawal.
The General Partner, in its sole discretion, may reduce, waive or

calculate differently the Incentive Allocation with respect to
certain Partners, including affiliates of the General Partner and
the Investment Manager.
The Partnership maintains a separate memorandum loss recovery

account for each Partner (a “Loss Recovery Account”), the
opening balance of which will be zero. For each fiscal year, the
Loss Recovery Account of a Partner will be debited with the
aggregate net capital depreciation, if any, allocated to such
Partner’s Capital Account for such fiscal year and credited, but
not beyond zero, with the aggregate net capital appreciation, if
any, allocated to such Partner’s Capital Account for such fiscal
year. In determining net capital depreciation and net capital
appreciation for these purposes, a Partner’s share of the
Management Fee will be taken into account. The General Partner
will not be allocated any Incentive Allocation with respect to a
Partner’s Capital Account until such Partner has recovered any
negative balance in its Loss Recovery Account. The unrecovered
balance in a Partner’s Loss Recovery Account will be
proportionately reduced for withdrawals of capital by such
Partner. Additional capital contributions will not affect a
Partner’s Loss Recovery Account.
NEW ISSUE Appreciation and depreciation from “new issues,” as such term is
ALLOCATIONS: defined under the Consolidated Rulebook (“Conduct Rules”) of
the Financial Industry Regulatory Authority (“FINRA”), as
amended, supplemented and interpreted from time to time, may
be allocated only to the Capital Accounts of Limited Partners that
are not deemed (or have not elected to be treated as) “restricted
persons” or “covered persons” under FINRA rules 5130 and
5131. As a matter of fairness, a use of funds charge may be
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debited from the Capital Accounts of Partners having an

unrestricted interest in a particular security in an amount equal to
the interest that would have accrued on the amount used to
purchase new issue securities and credited to the Capital
Accounts of all Partners. (See “Allocation of Gains and Losses;
Incentive Allocation.”)
From time to time, the Investment Manager may purchase

securities in initial equity public offerings, which are classified as
“new issues” under the Conduct Rules. If the Partnership
receives a “new issue allocation” through its investment in the
Partnership, limited partners who are prohibited from
participating in new issues pursuant to the Conduct Rules may
not participate in the beneficial results of such investments unless
they are permitted to do so under the Conduct Rules as such rules
may be amended or replaced from time to time. Elaborate
restrictions and rules and documentation requirements apply
under the Conduct Rules to investment funds that allocate or that
wish to receive an allocation of gains on “new issue” transactions.
If necessary, the Partnership will make special allocations to
prevent or limit such investors from participating in such
securities so as to comply with the Conduct Rules.
THE STP Investment Services, LLC. (the “Administrator”) has been

ADMINISTRATOR: retained by the Partnership to perform administrative and
accounting services. The Administrator receives fees based upon
the nature and extent of the services provided. The Administrator
may delegate some of its duties to companies affiliated with the
Administrator. (See “The Administrator.”)
WITHDRAWALS: A Limited Partner may withdraw, upon thirty (30) days’ prior
written notice, all or a portion of its Capital Account as of the last
Business Day of each fiscal quarter. The General Partner may
permit a Limited Partner to withdraw all or a portion of its
Capital Account at such other times in its sole discretion,
provided that, prior to permitting any such withdrawal, the
General Partner will consult with counsel to the Partnership to
ensure that such withdrawal will not cause the Partnership to be
treated as a “publicly traded partnership” taxable as a corporation.
Each date as of which a Limited Partner is permitted to withdraw
capital from its Capital Account is referred to herein as a
“Withdrawal Date.”
A partial withdrawal will not be permitted in an amount less than

$100,000, subject to the sole discretion of the General Partner to
permit a withdrawal for a lesser amount. In addition, if, as a
result of a partial withdrawal, the Capital Account balance of a
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Limited Partner would be less than $100,000, then such Limited

Partner may be treated, in the sole discretion of the General
Partner, as having given notice of complete withdrawal.
The General Partner may, in its sole discretion, waive or modify

any notice requirement of any Limited Partner, including
affiliates of the General Partner and the Investment Manager;
provided, however, that prior to waiving such notice requirement,
the General Partner will consult with counsel to the Partnership to
ensure that such action will not cause the Partnership to be treated
as a “publicly traded partnership” taxable as a corporation.
Distribution of withdrawal proceeds will generally be made

within thirty (30) calendar days after the applicable Withdrawal
Date. If a Limited Partner elects to withdraw more than 95% of
the value of its Capital Account, 95% of such value (computed on
the basis of unaudited data) will be distributed within thirty (30)
calendar days following the Withdrawal Date, without interest.
The Partnership will endeavor to pay the balance with interest at
the money market rate in effect at the depository with which the
Partnership maintains its liquid cash accounts and subject to audit
adjustment, promptly following completion of the audit of the
Partnership’s books and records for the year in which such
withdrawal occurs. Withdrawals will be deemed to be effective
immediately following the applicable Withdrawal Date.
Any Limited Partner may withdraw from the Partnership if Mr.

Niles dies, is adjudicated incompetent or is disabled (i.e., unable,
by reason of disease, illness or injury, to perform his functions as
the portfolio manager to the Partnership) for forty-five (45)
consecutive days, or otherwise ceases to act as a portfolio
manager to the Partnership (any such event, a “Key Man Event”).
Such special withdrawal right is exercisable by delivery of a
withdrawal notice to the Partnership by the thirtieth (30th) day
(the “Key Man Notice Date”) after the Limited Partners are
notified of any Key Man Event, and such withdrawal will be
effective at the end of the first full month after the Key Man
Notice Date. Distributions of withdrawal proceeds will be made
on the terms described above for regular withdrawals.
The Partnership may borrow to fund withdrawals and the cost of

any such borrowings will be borne by the Partnership as a whole,
and not by the particular Capital Account from which
withdrawals occur.
The General Partner may establish reserves and holdbacks for

estimated accrued expenses, liabilities and contingencies (even if
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such reserves or holdbacks are not otherwise required by U.S.

generally accepted accounting principles) which could reduce the
amount of a distribution upon withdrawal. The General Partner
will seek to make distributions in cash, but distributions in respect
of a withdrawal may be made in cash or in kind in an equitable
manner and consistent with the General Partner’s fiduciary duties.
The General Partner may, in its sole discretion, require a Limited

Partner to withdraw all or a portion of its Capital Account upon at
least five (5) days’ prior written notice for any reason or no
reason.
The General Partner may suspend withdrawal rights, in whole or

in part, when, among other things, there exists in the opinion of
the General Partner a state of affairs where disposal of the
Partnership’s assets, or the determination of the value of a
Limited Partner’s Capital Account, would not be reasonably
practicable or would be seriously prejudicial to the non-
withdrawing Limited Partners.
In addition, the General Partner may suspend the payment of

withdrawal proceeds of a Limited Partner if the General Partner
reasonably deems it necessary to do so to comply with anti-
money laundering laws and regulations applicable to the
Partnership, the General Partner, the Investment Manager or any
of the Partnership’s other service providers. (See “Anti-Money
Laundering Regulations.”)
TERM: The Partnership will continue until the earlier of (i) the
termination, bankruptcy, insolvency, dissolution or removal (in
the manner described herein) of the General Partner, or (ii) such
time as the General Partner, in its sole discretion, chooses to
dissolve the Partnership; provided, however, that the General
Partner may not dissolve the Partnership pursuant to (ii) above
upon an affirmative vote of Limited Partners whose Partnership
Percentages (as defined herein) aggregate more than 50% of the
Partnership Percentages of all Limited Partners (excluding any
Limited Partners affiliated with the General Partner) to continue
the Partnership. Upon a determination by the General Partner to
dissolve the Partnership, withdrawals, or distributions in respect
thereof, may not be made.
RISK FACTORS: The investment program of the Partnership is speculative and

entails substantial risks. There can be no assurance that the
investment objective of the Partnership will be achieved and that
investors will not incur losses. (See “Certain Risk Factors.”)
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BROKERAGE Portfolio transactions for the Partnership are allocated to brokers

COMMISSIONS; on the basis of best execution and in consideration of such
TURNOVER: brokers’ ability to effect such transactions, their facilities,
reliability and financial responsibility, and in consideration of
such brokers’ provision or payment of the costs of research and
brokerage products or services which are of benefit to the
Investment Manager, the Partnership and other accounts managed
by the Investment Manager and its affiliates. Accordingly, the
commissions and other transaction fees charged to the Partnership
by brokers in the foregoing circumstances may be higher than
those charged by other brokers who may not offer such products
or services. “Soft dollars” will be used only for research and
brokerage products or services within the meaning of Section
28(e) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).
The Partnership’s investment program emphasizes active

management of the Partnership’s portfolio. As a result, the
Investment Manager expects to have substantial portfolio
turnover. (See “Brokerage Commissions; Turnover.”)
OTHER ACTIVITIES Certain conflicts of interest may arise from the fact that the
OF THE GENERAL General Partner, the Investment Manager and their affiliates
PARTNER AND THE provide investment management services to the Partnership, and
INVESTMENT carry on investment activities for other clients, including other
MANAGER; investment funds, client accounts and proprietary accounts in
CONFLICTS OF which the Partnership has no interest.
INTEREST:
The portfolio strategies employed by the General Partner, the

Investment Manager and their affiliates for other accounts could
conflict with the transactions and strategies employed by the
Investment Manager in managing the Partnership and may affect
the prices and availability of the securities and instruments in
which the Partnership invests. Participation in specific
investment opportunities may be appropriate, at times, for both
the Partnership and other accounts managed by the Investment
Manager. Based on such factors as the relative amounts of
capital available for new investments, investment time horizon,
relative exposure to short-term market trends and the investment
programs and current portfolio positions, such opportunities will
be allocated among the Partnership and such other accounts.
From time to time, the investment management activities of the

General Partner, the Investment Manager or their affiliates may
expose them to material, non-public or otherwise confidential
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information regarding a particular company.
In such cases, the General Partner and the Investment Manager

may become restricted with respect to such company and may not
be able to invest in securities of such company or sell securities
of such company that it owns. This could have an adverse impact
on the value of the Partnership’s portfolio. (See “Other Activities
of the General Partner and the Investment Manager.”)
PRIME BROKER: BTIG acts as the prime broker (the “Prime Broker”) for the
Partnership, and clear (generally on the basis of payment against
delivery) the Partnership’s securities transactions, which may be
effected through other brokerage firms. (See “Brokerage
Commissions; Turnover.”)
REGULATORY The Partnership is not registered as an investment company in

MATTERS: reliance upon Section 3(c)(1) of the 1940 Act, and, accordingly,
the provisions of the 1940 Act (which may provide certain
regulatory safeguards to investors) will not be applicable.
The Investment Manager is registered as an investment adviser

under the Investment Advisers Act of 1940, as amended.
Additionally, the General Partner has claimed an exemption
under Commodity Futures Trading Commission (“CFTC”) Rule
4.13(a)(3) from registration with the CFTC as a commodity pool
operator and, accordingly, is not subject to certain regulatory
requirements with respect to the Partnership that would otherwise
be applicable absent such an exemption. The Investment
Manager is similarly exempt from registration with the CFTC as
a commodity trading advisor.
SUITABILITY; Investors in the Partnership must be “accredited investors” as

LIMITATIONS ON defined in Rule 501 under the Securities Act and a “qualified
TRANSFERABILITY: client” as defined in as defined in Rule 205-3 under the 1940 Act
and must meet other suitability requirements. The General
Partner may decline to admit an investor even if it meets such
suitability requirements. Interests may not be purchased by
nonresident aliens, foreign corporations, foreign partnerships,
foreign trusts or foreign estates, all as defined in the Internal
Revenue Code of 1986, as amended. Such persons, however,
may be eligible to invest in Satori I LP or the Satori Fund, LTD.
Without the consent of the General Partner, a Partner may pledge,

transfer or assign its Interest only by operation of law pursuant to
the death, bankruptcy or dissolution of such Partner, or pursuant
to a corporate reorganization or merger.
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(See “Certain Risk Factors” and “Limitations on Transferability;

Suitability Requirements.”)
TAXATION: A prospective investor is responsible for, and should consider

carefully, all of the potential tax consequences of an investment
in the Partnership and should consult with its tax advisor before
subscribing for an Interest.
The Partnership intends to be classified as a partnership for

Federal income tax purposes and not as a “publicly traded
partnership” taxable as a corporation. Accordingly, the
Partnership should not be subject to Federal income tax, and each
Limited Partner will be required to report on its own annual tax
return such Limited Partner’s distributive share of the
Partnership’s taxable income or loss, including the Partnership’s
pro rata share of the Partnership’s taxable income or loss. A
significant portion of the Partnership’s income allocated to
investors may be taxable as ordinary income and short-term
capital gains as a result of the investments made, and investment
techniques used, by the Partnership.
ERISA
As discussed in greater detail below, the Partnership may restrict
investments in the Partnership by “benefit plan investors,” as that
term is defined by the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), to less than 25% of the value of
any class of the Partnership’s interests in order to avoid treatment
of the Partnership’s assets as “plan assets” for purposes of ERISA
and the parallel prohibited transaction excise tax provisions of
Section 4975 of the Internal Revenue Code of 1986, as amended
(the “Code”). If, however, assets of the Partnership are treated as
“plan assets”, then the Investment Manager (and any other person
having or exercising discretionary authority over the Partnership
or its assets) will be a “fiduciary” as defined by ERISA and the
Code and will be subject to the fiduciary responsibility standards
and prohibited transaction restrictions of ERISA or the parallel
prohibited transaction excise tax provisions of Section 4975 of
the Code.
REPORTS TO Limited Partners receive audited financial reports annually and

PARTNERS: unaudited performance reports at least quarterly. Limited
Partners may request additional information and reporting, and
other Limited Partners may not receive some or all items
provided in response to such requests. Such information could
affect a Limited Partner’s decision to request a withdrawal of its
Interest.
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AUDITORS: The Partnership has retained BBD, LLP 1835 Market Street, 3rd
Floor, Philadelphia, PA., as its auditor.
LEGAL COUNSEL: Faegre Drinker Biddle & Reath LLP (“Faegre Drinker”) has
assisted the General Partner in the preparation of this
Memorandum and has advised and may continue to advise the
General Partner and the Investment Manager regarding their
duties and responsibilities to the Partnership (and its Limited
Partners). Faegre Drinker has not represented the Partnership (or
its Limited Partners) in organizing the Partnership or negotiating
its business terms or in connection with the offering of Interests.
The statements made in this Memorandum are those of the
Partnership, the General Partner and the Investment Manager and
not of Faegre Drinker. The Partnership does not anticipate that it
will engage separate counsel in connection with the organization
or general operation of the Partnership.
SUBSCRIPTION FOR Persons interested in subscribing for Interests will be furnished

INTERESTS: with, and will be required to complete, execute and return to the
Administrator, subscription documents and certain other
documents.
ANTI-MONEY As part of the Partnership’s responsibility for the prevention of

LAUNDERING money laundering, the Administrator may require a detailed
REGULATIONS: verification of a Limited Partner’s identity, any beneficial owner
underlying the account and the source of the payment.
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THE PARTNERSHIP
Satori Fund II L.P. ((the “Partnership”) is a Delaware limited partnership formed in April,
2020 to operate as a private investment partnership for the benefit of U.S. taxable investors.
INVESTMENT PROGRAM
Investment Objective
The Partnership’s investment objective is to achieve long-term capital appreciation. The

Partnership pursues this objective by primarily investing (both long and short) in the securities
(including debt, derivatives and equity) of companies from a broad range of industries. This
includes companies listed in the United States as well as those which trade on internationally
recognized exchanges or over-the-counter markets overseas. Investment decisions are based
primarily on identifying catalysts that the Investment Manager expects will change an issuer’s
earnings expectations relative to current consensus and therefore drive movement in the stock
price. This is determined by examining macroeconomic and company specific trends. Given the
increasingly cyclical nature of the U.S. and global economies as they mature, the Investment
Manager believes both “bottom up” research as well as market timing especially in the late
stages or the early stages of a cycle have merit. Emphasis is placed on developments, both
positive and negative, that the Investment Manager believes will generate attractive opportunities
on both the long and short side.
Investment Process
The Investment Manager employs a “bottom up” fundamentally driven research approach
to identify catalysts (e.g., favorable product mix shift, increasing price competition, falling
demand) that it expects will change an issuer’s earnings expectations relative to current
consensus and therefore drive movement in the stock price. The operating leverage for many
companies is large; therefore, understanding margin trends can be critical. Changing
expectations for earnings growth are also likely to affect the multiple paid for those earnings.
This “bottom up” research approach is also combined with a market timing-based approach
because of the increasingly cyclical nature of the maturing global markets.
The Investment Manager believes that a solid understanding of the macroeconomic

climate combined with solid analysis of micro-economic trends affecting demand for a particular
company yields the best investment themes both on the long and short side. The Investment
Manager believes that generally 50% of a stock’s performance is market driven, 25% is sector
driven and 25% is company specific. Therefore, market timing in a highly cyclical investment
universe can enhance returns dramatically.
Research Driven Investment Themes
The Investment Manager relies primarily on internal research to identify catalysts that it
expects will change an issuer’s earnings expectations relative to current consensus and therefore
drive movement in the stock price. Industry contacts developed by Mr. Niles in his over twenty-
seven (27) years on Wall Street are expected to be valuable in this regard. In addition, the
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Investment Manager uses a variety of other resources such as industry conferences, trade
symposia, brokerage reports and quantitative screens to identify those companies that may
benefit from a change in earnings expectations. However, this is done in the context of a macro
view around global economic growth and its affect on corporate profits and consumer wealth
which impacts spending. Within this framework, the Investment Manager seeks to identify those
subsectors that are likely to benefit the most from these macro trends and, within each subsector,
those companies that will correspondingly benefit the most.
Sector Focus
The Partnership primarily invests (both long and short) in securities (including debt,
derivatives and equity) of companies across a broad range of industries both domestically and
internationally. The subsectors that are likely to have a greater focus within the Partnership
include commodities, consumer, emerging/green technology, energy, financial, industrial, media,
REIT, retailing, services, technology, telecom and transportation. The Partnership may invest in
currencies to lower currency specific risk, diversify the portfolio and generate capital gains.
Investments may also be made in debt related instruments that are related to future expectations
for economic growth and inflation. The Partnership may also invest in other opportunistic
investments not contemplated herein.
Financial Instruments
The Partnership’s portfolio may include, without limitation, positions in securities,

including both equity and debt securities (including debt securities convertible into equity
securities), warrants, options on stocks and indices, forward and futures contracts, swaps,
treasuries and exchange-traded sector and index funds (“ETFs”). The Partnership does not invest
in non-publicly traded securities (e.g., venture capital investments and private placements). Cash
balances that are not committed are normally invested in high quality short-term debt
instruments of public or private issuers in money market mutual funds or in a non-interest
bearing account.
Diversification
The goal of the Partnership is to reduce correlation risk while maintaining a high return
by investing in fewer names where the Investment Manager feels it has an investing edge. In
general, the Partnership’s goal is to make investments where absolute returns can be generated
from both long and short positions. As a result, the Partnership does not anticipate executing
many pair trades or relative valuation trades where leverage is employed. Individual position
sizes are generally expected to be below 10%, and in most cases below 5%. The maximum
starting position size is 25% of net assets, with growth to 35% of net assets being permitted. The
Partnership does not envision this occurring more than several times a year, and only under the
most compelling of circumstances where market risk is reduced and company specific risk is
high.
The Investment Manager intends to invest in approximately 20 to 60 companies at any

given time. The average market capitalization of companies in which the Partnership may be
invested is expected to be in excess of $1 billion with over 75% of the gross exposure to
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companies with market capitalization of over $500 million. If market conditions, the lack of
compelling investment opportunities or risk control measures warrant it, the Partnership may be
less than fully invested during certain periods.
Leverage
Leverage is utilized in the investment program of the Partnership when deemed

appropriate by the Investment Manager. The Partnership may borrow money from banks or
brokerage firms, or purchase securities on margin, as well as finance positions and lend funds
through repurchase (“repo”) and reverse repurchase agreements. Prospective Limited Partners
(as defined below) should be aware of the risks and expenses in connection with the use of
leverage.
The Partnership may engage in investment strategies not described herein that the
Investment Manager considers appropriate. The investment program described above is
speculative and entails substantial risks. There can be no assurance that the investment
objective of the Partnership will be achieved. (See “Certain Risk Factors.”)
THE GENERAL PARTNER
AlphaOne Satori Management, LLC (the “General Partner”), a Delaware limited liability
company formed in December 2008, serves as the general partner of the Partnership. The
General Partner has ultimate responsibility for the management, operations and the investment
decisions made on behalf of the Partnership.
STP Investment Partners LLC (“STP Investment Partners”) is the sole member of the
General Partner. STP Investment Partners was formed with the intent of being a leading
provider of specialty investment products that address the capital preservation and growth needs
of high net worth individuals and families and taxable and non-taxable institutions.
THE INVESTMENT MANAGER
STP Investment Partners, LLC (the “Investment Manager”), a Pennsylvania limited

liability company formed in September 2019 and owned by Murray Investments, LLC, serves as
the investment manager to the Partnership and is responsible for the day-to-day investment
activities of the Partnership, subject to the overall supervision of the General Partner. The
Investment Manager is a SEC filed Exempt Reporting Adviser. The Investment Manager also
serves as the investment manager to the Master Fund, the Offshore Fund and other investment
vehicles.
Biographical information relating to key personnel of STP Investment Partners is set

forth below:
Daniel T. Niles
Mr. Niles has more than twenty-seven (27) years of investment industry experience. Mr.
Niles formed the Satori Fund in 2004, and in 2009, co-founded AlphaOne Capital Partners. In
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November, 2019, STP Investment Partners acquired AlphaOne Capital Partners, and Mr. Niles
continues to manage the Satori Fund as a Senior Portfolio Manager for STP Investment Partners.
From 2004 to 2008, Mr. Niles was a Managing Director of Neuberger Berman, Inc., a
subsidiary of Lehman Brothers, and Chief Executive Officer of Neuberger Berman Technology
Management, LLC, the former general partner of the Partnership. Mr. Niles first joined Lehman
Brothers in May 2000 and was the head of computer hardware and semiconductor research.
Prior to joining Lehman Brothers, Mr. Niles was at Robertson Stephens where he held
similar responsibilities and was in Robertson’s mergers & acquisitions group from 1994 to 2000.
Before starting his Wall Street career, Mr. Niles was an engineer with Digital Equipment
Corporation.
Mr. Niles holds a Bachelor’s degree in Systems Engineering from Boston University and
a Master’s degree in Electrical Engineering from Stanford University.
Donald O’Hara
Mr. O’Hara serves as the Compliance Officer at STP Investment Partners, who acquired
AlphaOne Capital Partners in November 2019. He has more than 20 years of investment
industry experience supporting the operations and accounting of hedge funds, fund of hedge
funds, institutional separate accounts, SMA Wrap products, and mutual funds. He also has
developed a firm wide culture of compliance and handles all regulatory compliance duties for
both the firm and STP’s respective registered products.
Prior to joining AlphaOne, Mr. O’Hara was the Controller for Reliance International
Research, the Investment Advisor to the Reliance Management family of alternative investment
vehicles. While at Reliance International Research he helped develop an international,
institutional operating structure which supported the accounting, performance reporting, and
investor servicing for various hedge fund strategies.
Before joining Reliance International Research, Mr. O’Hara was Senior Performance
Analyst for CMS Companies, where he managed performance reporting and operations for
various Private Equity and Hedge Fund of Fund products. Preceding CMS Companies, Mr.
O’Hara assisted in establishing the operations structure for Gartmore Global Investments. He
has also spent many years in back office operations and accounting at Brinker Capital and SEI
Investments.
Mr. O’Hara has earned an MBA in Finance from Villanova University and a Bachelor of
Science degree in Economics from Pennsylvania State University.
USE OF PROCEEDS
The Partnership will use the proceeds of this offering for the purpose of pursuing the
investment strategy described herein and paying certain expenses of the Partnership.
MANAGEMENT FEE; EXPENSES
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The Partnership pays a monthly management fee (the “Management Fee”) to the
Investment Manager equal to 0.1666% (2.0% on an annualized basis) of the net asset value of
each such Partner’s Capital Account, determined as of the beginning of each calendar month
(prior to determination of the Incentive Allocation (if applicable for such calendar month). The
Management Fee is calculated and paid in arrears.
A pro rata portion of the Management Fee shall be paid out of any capital contributions
made by new or existing Partners on any date that does not fall on the first day or first business
day of a calendar month, based on the actual number of days remaining in such calendar month.
In case of a withdrawal of a Partner’s Capital Account (or portion thereof) other than as of the
last day or last business day of a calendar month, a pro rata portion of the Management Fee in
respect of such Capital Account (or portion thereof), based on the number of days remaining in
such calendar month be deducted and paid as the Management Fee. In the sole discretion of the
Investment Manager, the Management Fee may be waived, reduced or calculated differently with
respect to certain Partners, including affiliates of the General Partner and the Investment
Manager. The General Partner’s Capital Account will not be charged any Management Fee.
In consideration for the Management Fee, the Investment Manager provides office space
and utilities; news, quotation and computer equipment; software; and secretarial, clerical and
other personnel to the Partnership. The Investment Manager bears the costs of providing such
goods and services, and all of its own overhead costs and expenses, except to the extent that any
such goods, services, costs and expenses related to research and brokerage are provided through
soft dollars generated by the Partnership as permitted hereunder or borne by the Partnership as
described below.
The Partnership bears its own expenses, including, without limitation, fees to the
administrator to the Partnership investment related expenses such as brokerage commissions,
research expenses, interest on margin accounts and other indebtedness, borrowing charges on
securities sold short, custodial fees, bank service fees, withholding and transfer fees, entity-level
taxes, clearing and settlement charges, professional fees (including, without limitation, expenses
of consultants and experts) relating to investments, and other expenses related to the purchase,
sale or transmittal of investments, legal, accounting, audit and tax preparation expenses,
expenses related to the offering and sale of Interests, and other similar expenses related to the
Partnership and extraordinary expenses. Such expenses (other than the Management Fee) will
be shared on a pro rata basis by all of the Partners. To the extent that expenses to be borne by
the Partnership are paid by the General Partner (in excess of its ratable share) or by the
Investment Manager, the Partnership will reimburse the General Partner or the Investment
Manager, as the case may be, for such expenses.
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ALLOCATION OF GAINS AND LOSSES; INCENTIVE ALLOCATION
At the end of each accounting period 1 of the Partnership, any net capital appreciation 2 or
net capital depreciation 3 is allocated to the Partners (as defined below) in proportion to their
respective opening Capital Account balances for such period.
Generally, at the end of each fiscal year of the Partnership, 20% of any net realized and
unrealized capital appreciation allocated to each Partner’s Capital Account for such fiscal year
(appropriately adjusted for withdrawals and after reducing net capital appreciation for the
Management Fee debited to each Partner’s Capital Account) will be reallocated to the Capital
Account of the General Partner (the “Incentive Allocation”); provided, however, that the net
capital appreciation upon which the calculation of the Incentive Allocation is based will be
reduced to the extent of any unrecovered balance remaining in the Loss Recovery Account
maintained on the books and records of the Partnership for such Partner. If a Partner makes a
complete or partial withdrawal prior to year-end, an Incentive Allocation will be determined and
made at such time with respect to such withdrawal. The General Partner, in its sole discretion,
may reduce, waive or calculate differently the Incentive Allocation with respect to certain
Partners, including affiliates of the General Partner and the Investment Manager.
The Partnership maintains a separate memorandum loss recovery account for each
Partner (a “Loss Recovery Account”), the opening balance of which will be zero. For each fiscal
year, the Loss Recovery Account of a Partner will be debited with the aggregate net capital
depreciation, if any, allocated to such Partner’s Capital Account for such fiscal year and credited,
but not beyond zero, with the aggregate net capital appreciation, if any, allocated to such
Partner’s Capital Account for such fiscal year. In determining net capital depreciation and net
capital appreciation for these purposes, a Partner’s share of the Management Fee will be taken
into account. The General Partner will not be allocated any Incentive Allocation with respect to
a Partner’s Capital Account until such Partner has recovered any negative balance in its Loss
Recovery Account. The unrecovered balance in a Partner’s Loss Recovery Account will be
proportionately reduced for withdrawals of capital by such Partner. Additional capital
contributions will not affect a Partner’s Loss Recovery Account.
1
An “accounting period” refers to the following periods: Each accounting period commences immediately after the
close of the next preceding accounting period. Each accounting period hereunder will close at the close of business
on the first to occur of (i) the last day of each month, (ii) the date immediately prior to the effective date of the
admission of a new Partner, (iii) the date immediately prior to the effective date of an additional capital contribution
made by a Limited Partner, (iv) the date on which a Partner withdraws all or a portion of its Capital Account or (v)
the date when the Partnership dissolves. Appropriate adjustments to the calculation of net capital appreciation and
net capital depreciation are made for interim period events.
2
“Net capital appreciation” refers to the increase in the value of the Partnership’s net assets, including unrealized
gains and losses, from the beginning of each accounting period (after giving effect to withdrawals relating to the
immediately preceding Withdrawal Date and to the deduction of the Management Fee) to the end of such accounting
period, and with respect to any fiscal year of the Partnership or other period used to determine the Incentive
Allocation, refers to aggregate net capital appreciation for such period less aggregate net capital depreciation for
such period.
3
“Net capital depreciation” refers to the decrease in the value of the Partnership’s net assets, including unrealized
gains and losses, from the beginning of each accounting period (after giving effect to withdrawals relating to the
immediately preceding Withdrawal Date and to the deduction of the Management Fee) to the end of such accounting
period.
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NEW ISSUE ALLOCATIONS
From time to time, the Investment Manager may purchase securities in initial equity
public offerings, which are classified as “new issues” under the Conduct Rules. If the
Partnership receives a “new issue allocation”, limited partners who are prohibited from
participating in new issues pursuant to the Conduct Rules may not participate in the beneficial
results of such investments unless they are permitted to do so under the Conduct Rules as such
rules may be amended or replaced from time to time. Elaborate restrictions and rules and
documentation requirements apply under the Conduct Rules to investment funds that allocate or
that wish to receive an allocation of gains on “new issue” transactions. If necessary, the
Partnership will make special allocations to prevent or limit such investors from participating in
such securities so as to comply with the Conduct Rules.
Appreciation and depreciation from “new issues,” as such term is defined under the
Consolidated Rulebook (“Conduct Rules”) of the Financial Industry Regulatory Authority
(“FINRA”), as amended, supplemented and interpreted from time to time, may be allocated only
to the Capital Accounts of Limited Partners that are not deemed (or have not elected to be treated
as) “restricted persons” or “covered persons” under FINRA rules 5130 and 5131. As a matter of
fairness, a use of funds charge may be debited from the Capital Accounts of Partners having an
unrestricted interest in a particular security in an amount equal to the interest that would have
accrued on the amount used to purchase new issue securities and credited to the Capital
Accounts of all Partners. (See “Allocation of Gains and Losses; Incentive Allocation.”)
From time to time, the Investment Manager may purchase securities in initial equity
public offerings, which are classified as “new issues” under the Conduct Rules. If the
Partnership receives a “new issue allocation”, limited partners who are prohibited from
participating in new issues pursuant to the Conduct Rules may not participate in the beneficial
results of such investments unless they are permitted to do so under the Conduct Rules as such
rules may be amended or replaced from time to time. Elaborate restrictions and rules and
documentation requirements apply under the Conduct Rules to investment funds that allocate or
that wish to receive an allocation of gains on “new issue” transactions. If necessary, the
Partnership will make special allocations to prevent or limit such investors from participating in
such securities so as to comply with the Conduct Rules.
The General Partner reserves the right to vary its policy with respect to the allocation of
new issues as it deems appropriate for the Partnership as a whole, in light of, among other things,
existing interpretations of, and amendments to, the Conduct Rules and practical considerations,
including administrative burdens and principles of fairness and equity.
WITHDRAWALS
A Limited Partner may withdraw, upon thirty (30) days’ prior written notice, all or a
portion of its Capital Account as of the last Business Day of each fiscal quarter. The General
Partner may permit a Limited Partner to withdraw all or a portion of its Capital Account at such
other times in its sole discretion, provided that, prior to permitting any such withdrawal, the
General Partner will consult with counsel to the Partnership to ensure that such withdrawal will
not cause the Partnership to be treated as a “publicly traded partnership” taxable as a corporation.
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Each date as of which a Limited Partner is permitted to withdraw capital from its Capital
Account is referred to herein as a “Withdrawal Date.”
A partial withdrawal will not be permitted in an amount less than $100,000, subject to the
sole discretion of the General Partner to permit a withdrawal for a lesser amount. In addition, if,
as a result of a partial withdrawal, the Capital Account balance of a Limited Partner would be
less than $100,000, then such Limited Partner may be treated, in the sole discretion of the
General Partner, as having given notice of complete withdrawal.
The General Partner may, in its sole discretion, waive or modify any notice requirement
of any Limited Partner, including affiliates of the General Partner and the Investment Manager;
provided, however, that prior to waiving such notice requirement, the General Partner will
consult with counsel to the Partnership to ensure that such action will not cause the Partnership
to be treated as a “publicly traded partnership” taxable as a corporation.
Distribution of withdrawal proceeds will generally be made within thirty (30) calendar
days after the applicable Withdrawal Date. If a Limited Partner elects to withdraw more than
95% of the value of its Capital Account, 95% of such value (computed on the basis of unaudited
data) will be distributed within thirty (30) calendar days following the Withdrawal Date, without
interest. The Partnership will endeavor to pay the balance with interest at the money market rate
in effect at the depository with which the Partnership maintains its liquid cash accounts and
subject to audit adjustment, promptly following completion of the audit of the Partnership’s
books and records for the year in which such withdrawal occurs. Withdrawals will be deemed to
be effective immediately following the applicable Withdrawal Date.
Any Limited Partner may withdraw from the Partnership if Mr. Niles dies, is adjudicated
incompetent or is disabled (i.e., unable, by reason of disease, illness or injury, to perform his
functions as the portfolio manager to the Partnership) for forty-five (45) consecutive days, or
otherwise ceases to act as a portfolio manager to the Partnership (any such event, a “Key Man
Event”). Such special withdrawal right is exercisable by delivery of a withdrawal notice to the
Partnership by the thirtieth (30th) day (the “Key Man Notice Date”) after the Limited Partners are
notified of any Key Man Event, and such withdrawal will be effective at the end of the first full
month after the Key Man Notice Date. Distributions of withdrawal proceeds will be made on the
terms described above for regular withdrawals.
The Partnership may borrow to fund withdrawals and the cost of any such borrowings
will be borne by the Partnership as a whole, and not by the particular Capital Account from
which withdrawals occur.
The General Partner may establish reserves and holdbacks for estimated accrued
expenses, liabilities and contingencies (even if such reserves or holdbacks are not otherwise
required by U.S. generally accepted accounting principles) which could reduce the amount of a
distribution upon withdrawal. The General Partner will seek to make distributions in cash, but
distributions in respect of a withdrawal may be made in cash or in kind in an equitable manner
and consistent with the General Partner’s fiduciary duties.
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The General Partner may, in its sole discretion, require a Limited Partner to withdraw all
or a portion of its Capital Account upon at least five (5) days’ prior written notice for any reason
or no reason.
The General Partner may suspend withdrawal rights, in whole or in part, when, among
other things, there exists in the opinion of the General Partner a state of affairs where disposal of
the Partnership’s assets, or the determination of the value of a Limited Partner’s Capital Account,
would not be reasonably practicable or would be seriously prejudicial to the non-withdrawing
Limited Partners.
In addition, the General Partner may suspend the payment of withdrawal proceeds of a
Limited Partner if the General Partner reasonably deems it necessary to do so to comply with
anti-money laundering laws and regulations applicable to the Partnership, the General Partner,
the Investment Manager or any of the Partnership’s other service providers. (See “Anti-Money
Laundering Regulations.”)
CERTAIN RISK FACTORS
Prospective Limited Partners should consider the following factors in determining

whether an investment in the Partnership is a suitable investment:
Potential for Additional U.S. Regulatory Oversight of Partnership. Varying degrees

of additional regulatory oversight and legal restrictions may ultimately be imposed upon the
Partnership in the United States and its operations which could vary widely in their scope and in
their likely effect on the Partnership. It is impossible to predict with any degree of certainty
which, if any, proposals will ultimately be adopted and the extent of any additional scrutiny or
restrictions and the potential adverse consequences of such regulatory scrutiny on the
Partnership.
Economic and Market Risk. Changes in economic conditions, including, for example,
inflation rates, industry conditions, competition, technological developments, domestic and
global political and diplomatic events and trends, tax laws and innumerable other factors – none
of which will be within the control of the Investment Manager – can affect substantially and
adversely the business and prospects of the Partnership. A major recession or adverse
developments in the securities market might have an impact on some or all of the Partnership’s
investments. The Investment Manager of the Partnership may rely upon its own projections
concerning the Partnership’s future performance in making investment decisions. Such
projections are inherently subject to uncertainty and to certain factors beyond the control of the
Partnership and the Investment Manager. The economic environment for all companies may
remain challenging.
Change in Investment Objective. The Partnership’s investment program should be

evaluated on the basis that there can be no assurance that the Investment Manager’s assessment
of short- or long-term prospects of investments will prove accurate or that the Partnership will
achieve its investment objective. The Partnership currently pursues its investment objective by
investing across a broad range of industries. (See “Investment Program.”).
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State and Federal Securities Laws. This Offering has not been registered under the
Securities Act, in reliance on the exceptive provisions of Section 4(a)(2) of the Securities Act
and Regulation D thereunder. Similar reliance has been placed on apparently available
exemptions from securities registration and qualification requirements under applicable state
securities laws. No assurance can be given that the Offering currently qualifies or will continue
to qualify under one or more of such exemptive provisions due to, among other things, the
manner of distribution, the existence of similar offerings in the past or in the future, or the
retroactive change of any securities law or regulation. If, and to the extent that, claims or suits
for rescission are brought and successfully concluded for failure to register this Offering or other
offerings or for acts or omissions constituting offenses under the Securities Act, the Exchange
Act or applicable state securities laws, the Partnership could be materially and adversely
affected, jeopardizing the ability of the Partnership to operate successfully. Furthermore, the
human and capital resources of the Partnership, General Partner and Investment Manager could
be adversely affected by the need to defend actions under these laws, even if the Partnership is
ultimately successful in its defense.
The General Partner intends to rely on Section 3(c)(1) of the 1940 Act so that the
Partnership should not be deemed to be an “investment company” and, accordingly, should not
be required to register as such under the 1940 Act. Accordingly, if, at any time, the General
Partner determines that the participation by a Limited Partner in the Partnership may cause the
Partnership not to be excluded from the definition of “investment company” under the 1940 Act,
the General Partner may cause a mandatory withdrawal, effective as of any date determined by
the General Partner, of such portion or all of the Capital Account of that Limited Partner as the
General Partner may determine is necessary or advisable. There can be no assurance that the
Partnership will not be deemed an “investment company” for purposes of the 1940 Act and
required to register as such thereunder, in which event the Partnership and the General Partner
could be subject to legal actions by regulatory authorities and others and could be forced to
terminate business. The costs of defending any such action could constitute a material part of the
Partnership’s assets and termination could have materially adverse effects on the Partnership.
Neither the Partnership nor the General Partner are or intend to be registered as a broker
or dealer under the Exchange Act, the Delaware Securities Law or any other securities law. If
the SEC or the securities law administrator of any state were to assert that such registration is
required, the Partnership would bear the resulting increased expenses and its activities could be
restricted, which could materially and adversely affect the Partnership’s business.
Pursuant to CFTC Rule 4.13(a)(3), the General Partner is not required to register as a
commodity pool operator (“CPO”) under the Commodity Exchange Act. The General Partner is
exempt from the requirements applicable to a registered CPO with respect to the Partnership and
will operate the Partnership as if the General Partner is exempt from registration as a CPO.
Securities and investment businesses generally are comprehensively and intensively

regulated under state and federal laws and regulations. Any investigation, litigation or other
proceeding undertaken by state or federal regulatory agencies or private parties could necessitate
the expenditure of material amounts of Partnership assets for legal and other costs and could
have other materially adverse consequences for the Partnership. In addition, because this
Offering has not been registered under the Securities Act and the Partnership is not registered
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under the 1940 Act, the Limited Partners are not afforded certain regulatory protections offered
to investors in offerings and entities that are registered under such laws.
Pandemic Risks. Disease outbreaks that affect local economies or the global economy
may materially and adversely impact the Partnership. For example, uncertainties regarding the
novel Coronavirus (COVID-19) outbreak have resulted in serious economic disruptions across
the globe. These types of outbreaks can be expected to cause severe decreases in core business
activities. These disruptions lead to instability in the market place, including stock market losses
and overall volatility, as has occurred in connection with COVID-19. In the face of such
instability, governments may take extreme and unpredictable measures to combat the spread of
disease and mitigate the resulting market disruptions and losses. The Investment Manager has in
place business continuity plans reasonably designed to ensure that it maintains normal business
operations, and that investment portfolios and client assets are protected. However, in the event
of a pandemic or an outbreak, there can be no assurance that the Investment Manager or the
Investment Manager’s and Partnership’s service providers will be able to maintain normal
business operations for an extended period of time or will not lose the services of key personnel
on a temporary or long-term basis due to illness or other reasons. The full impacts of a pandemic
or disease outbreaks are unknown, resulting in a high degree of uncertainty for potentially
extended periods of time.
Dependence on the General Partner and the Investment Manager. The success of
the Partnership is significantly dependent upon the ability of the General Partner and the
Investment Manager, and in particular, Mr. Niles, to continue to develop and effectively pursue
the Partnership’s investment objective.
Limited Liquidity; Information Rights. An investment in the Partnership provides

limited liquidity since the Interests are not freely transferable and a Limited Partner generally
may only withdraw from a Capital Account at such limited times as provided herein. In addition,
the General Partner may suspend withdrawal rights where, in the opinion of the General Partner,
the disposal of the Partnership’s assets, or the determination of the value of a Limited Partner’s
Capital Account, would not be reasonably practicable or would be seriously prejudicial to the
non-withdrawing Limited Partners. An investment in the Partnership is suitable only for
sophisticated investors who do not need liquidity with respect to this investment. Also, Limited
Partners may request additional information and reporting and, as a result, may be able to act on
such additional information (i.e., request withdrawals) that other Limited Partners do not request
or receive.
In-Kind Distributions. The Partnership expects to distribute cash to a Limited Partner

upon a withdrawal from the Limited Partner’s Capital Account. However, there can be no
assurance that the Partnership will have sufficient cash to satisfy withdrawal requests, or that the
Partnership will be able to liquidate investments at the time of such withdrawal requests at
favorable prices. Under the foregoing circumstances, and under other circumstances deemed
appropriate by the General Partner, the General Partner may make distributions in respect of a
withdrawal in kind in an equitable manner and consistent with the General Partner’s fiduciary
duties.
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Investment and Trading Risks. An investment in the Partnership involves risks,

including the risk that the entire amount invested may be lost. The Partnership invests in and
actively trades securities and other financial instruments using investment techniques with risk
characteristics, including risks arising from the volatility of the equity markets, the risks of
borrowings and short sales, the potential illiquidity of securities and other financial instruments
and the risk of loss from counterparty defaults. No guarantee or representation is made that the
Partnership’s investment objective will be achieved. The Partnership may utilize such
investment techniques as option transactions, margin transactions, short sales, leverage and
derivatives trading, which practices involve volatility and can increase the adverse impact to
which the Partnership may be subject. In addition, securities which the Investment Manager
believes are fundamentally undervalued or incorrectly valued may not ultimately be valued in the
capital markets at prices and/or within the time frame the Investment Manager anticipates. As a
result, the Partnership may lose all or substantially all of its investment in any particular instance.
Performance Based Allocation. The General Partner receives an Incentive Allocation

with respect to each Limited Partner based on the net capital appreciation allocated to such
Limited Partner. Such compensation arrangement may create an incentive for the Investment
Manager, an affiliate of the General Partner, to make investments that are riskier or more
speculative than would be the case if such arrangements were not in place. Since the Incentive
Allocation is calculated on a basis that includes unrealized appreciation of the Partnership’s net
assets, the allocation may be greater than if it were based solely on realized gains.
Investments in Undervalued Securities. In seeking to achieve the objective of the

Partnership, the Investment Manager may invest in undervalued securities. The identification of
investment opportunities in undervalued securities is a difficult task and there is no assurance
that such opportunities will be successfully recognized or acquired. While investments in
undervalued securities offer the opportunity for above-average capital appreciation, these
investments involve a high degree of financial risk and can result in substantial losses. Returns
generated from the Partnership’s investments may not adequately compensate for the business
and financial risks assumed.
The Partnership may make certain speculative investments in securities that the
Investment Manager believes to be undervalued; however, there are no assurances that the
securities purchased will in fact be undervalued. In addition, the Partnership may be required to
hold such securities for a substantial period of time before realizing their anticipated value.
During this period, a portion of the Partnership’s capital would be committed to the securities
purchased, thus possibly preventing the Partnership from investing in other opportunities. In
addition, the Partnership may finance such purchases with borrowed funds and thus will have to
pay interest on such funds during such waiting period.
Certain of the investment strategies employed by the Partnership are based on historical
relationships between prices. There can be no assurance that such historical relationships will
continue, and no representation is made by the Investment Manager as to what results the
Partnership will achieve or are likely to achieve based on such trends and relationships.
Small- and Medium-Capitalization Companies. The Partnership may invest a portion

of its assets in the securities of companies with small- to medium-sized market capitalizations.
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While the Investment Manager believes such securities often provide significant potential for
appreciation, the securities of certain companies, particularly smaller-capitalization companies,
involve higher risks in some respects than do investments in securities of larger companies. For
example, prices of small-capitalization and even medium-capitalization securities are often more
volatile than prices of large-capitalization securities and the risk of bankruptcy or insolvency of
many smaller companies (with the attendant losses to investors) is higher than for larger “blue-
chip” companies. In addition, due to thin trading in the securities of some small-capitalization
companies, an investment in those companies may be less liquid than an investment in medium-
or large-capitalization companies.
Growth Stage Companies. While investments in growth stage companies offer the
opportunity for significant capital gains, such investments involve a high degree of business and
financial risk which can result in substantial losses. The stock market has experienced volatility
which has particularly affected the securities of growth stage companies. As a result, the
Partnership’s performance may experience substantial volatility.
Investing in Technology Companies. Investing in securities and other instruments of

technology companies involves substantial risks. These risks include: the fact that certain
companies in the portfolio of the Partnership may have limited operating histories; rapidly
changing technologies and products which may quickly become obsolete; cyclical patterns in
information technology spending which may result in inventory write-offs, cancellation of orders
and operating losses; scarcity of management, engineering and marketing personnel with
appropriate technological training; the possibility of lawsuits related to technological patents;
changing investor sentiment and preferences with regard to technology sector investments
(which are generally perceived as risky) which can affect the price of underlying securities; and
volatility in the U.S. stock markets affecting the prices of technology company securities, which
may cause the performance of the Partnership to experience substantial volatility.
Risks of Investing in REIT Securities. The Partnership may invest in securities issued
by entities which qualify as “real estate investment trusts” (“REITs”) under the Internal Revenue
Code of 1986, as amended. As a result, some of the Partnership’s investments will be subject to
the risks incident to investments in REITs, including: (i) potential environmental liabilities, the
risk of uninsured losses, the perceptions of prospective tenants of the safety, convenience and
attractiveness of the properties, the ability of the owner to provide adequate management,
maintenance and insurance, the expenses of periodically renovating, repairing and reletting
spaces, and increasing operating costs (including mortgage payments, real estate taxes,
insurance, maintenance costs and utilities) which may not be passed through to tenants; (ii) risks
of owning properties through joint ventures or partnerships which may render a REIT unable to
exercise sole decision-making authority and subject the REIT to the risk that a joint venturer or
partner will act in a manner contrary to its best interests; (iii) general real estate investment
considerations, such as the effect of local economic and other conditions on property cash flows
and values, the need to relet space upon the expiration of current leases, dependence on major
tenants and the possibility of tenant defaults, the ability of a property to generate revenue
sufficient to meet debt service payments and other operating expenses, periodic excessive real
estate development, and the illiquidity of real estate investments, all of which may affect the
REIT’s ability to make expected distributions to its stockholders; (iv) possible increases in
interest rates, which may lead prospective purchasers of real estate equity securities, as well as
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other classes of equities, to demand higher annual yields, and which would adversely affect the
market price of such securities; (v) borrowing risks; (vi) relative illiquidity of real estate
investments which will tend to limit the ability of a REIT to vary its holdings promptly in
response to changes in local economic or other conditions; and (vii) risks associated with the
management by REITs of properties owned by third parties, including the risk that management
contracts (which are typically cancelable without notice) will be terminated by the entity
controlling the property or in connection with the sale of such property, that contracts may not be
renewed upon expiration or may not be renewed on terms consistent with current terms, and that
the rental revenues upon which management fees are based will decline as a result of general real
estate market conditions or specific market factors.
Investments in REITs are also subject to special risks, including, without limitation: (i)
restrictions on ownership (which may prohibit ownership of more than 9.9% of a REIT’s shares
by one investor), which are designed to ensure that the REIT does not violate certain share
accumulation restrictions imposed by federal tax laws on REITs; and which may also deter
possible acquisitions of, or changes in control of, a REIT; (ii) many REITs have small-to-
medium-sized market capitalizations which may be more volatile than prices of large-
capitalization securities and an investment in such securities may be less liquid; and (iii) tax
risks, including risk of changes in the tax laws that may cause a REIT to fail to qualify as a REIT
or cause REITs, generally, to be subject to corporate taxation, and limitations on a REIT’s ability
to sell properties at a time when it is otherwise economically advantageous to do so, thereby
adversely affecting returns to its stockholders.
Leverage; Margin. Leverage is utilized in the investment program of the Partnership,

either directly, when deemed appropriate by the Investment Manager. While leverage presents
opportunities for increasing the total return on investments, it has the effect of potentially
increasing losses as well. Accordingly, any event which adversely affects the value of an
investment could be magnified to the extent that leverage is utilized. The cumulative effect of
the use of leverage with respect to any investments in a market that moves adversely to such
investments could result in a substantial loss, which would be greater than if the investments
were not leveraged.
In general, the Partnership’s use of short-term margin borrowings results in certain

additional risks. For example, should the securities pledged to brokers to secure the portfolio’s
margin accounts decline in value, the portfolio could be subject to a “margin call,” pursuant to
which the portfolio must either deposit additional funds with the broker, or suffer mandatory
liquidation of the pledged securities to compensate for the decline in value. In the event of a
sudden precipitous drop in the value of the portfolio’s assets, the portfolio might not be able to
liquidate assets quickly enough to pay off its margin debt.
When the Partnership purchases an option in the United States, there is no margin
requirement because the option premium is paid for in full. The premiums for certain options
traded on non-U.S. exchanges may be paid for on margin. Whether any margin deposit will be
required for over-the-counter (“OTC”) options and other OTC instruments, such as currency
forwards, will depend on the credit determinations and specific agreements of the parties to the
transaction, which are individually negotiated.
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Call Options. There are risks associated with the sale and purchase of call options. The
seller (writer) of a call option which is covered (e.g., the writer holds the underlying security)
assumes the risk of a decline in the market price of the underlying security below the purchase
price of the underlying security offset by the gain by the premium received if the option expires
out of the money, and gives up the opportunity for gain on the underlying security above the
exercise price of the option. The seller of an uncovered call option assumes the risk of a
theoretically unlimited increase in the market price of the underlying security above the exercise
price of the option. The buyer of a call option assumes the risk of losing the premium if the
option expires out of the money.
Put Options. There are risks associated with the sale and purchase of put options. The
seller (writer) of a put option which is covered (e.g., the writer has a short position in the
underlying security) assumes the risk of an increase in the market price of the underlying
security above the sale price of the short position of the underlying security offset by the
premium if the option expires out of the money, and thus the gain in the premium, and the option
seller gives up the opportunity for gain on the underlying security below the exercise price of the
option. The seller of an uncovered put option assumes the risk of a decline in the market price of
the underlying security to zero. The buyer of a put option assumes the risk of losing the
premium if the option expires out of the money.
Hedging Transactions. The Investment Manager is not required to attempt to hedge

portfolio positions in the Partnership and, for various reasons, may determine not to do so.
Furthermore, the Investment Manager may not anticipate a particular risk so as to hedge against
it. The Partnership may utilize financial instruments, both for investment purposes and for risk
management purposes, in order to: (i) protect against possible changes in the market value of the
Partnership’s investment portfolio resulting from fluctuations in the securities markets and
changes in interest rates, (ii) protect the unrealized gains in the value of the investments in the
Partnership’s portfolio, (iii) facilitate the sale of any such investments, (iv) enhance or preserve
returns, spreads or gains on any investment in the Partnership’s portfolio, (v) hedge the interest
rate or currency exchange rate on any of the Partnership’s liabilities or assets, (vi) protect against
any increase in the price of any securities the Partnership anticipates purchasing at a later date or
(vii) for any other reason that the Investment Manager deems appropriate.
The success of the hedging strategy of the Partnership is subject to the Investment
Manager’s ability to correctly assess the degree of correlation between the performance of the
instruments used in the hedging strategy and the performance of the investments in the portfolios
being hedged. Since the characteristics of many securities change as markets change or time
passes, the success of the Partnership’s hedging strategy is also subject to the Investment
Manager’s ability to continually recalculate, readjust and execute hedges in an efficient and
timely manner. While the Partnership may enter into hedging transactions to seek to reduce risk,
such transactions may result in a poorer overall performance for the Partnership than if it had not
engaged in any such hedging transactions. For a variety of reasons, the Investment Manager
may not seek to establish a perfect correlation between such hedging instruments and the
portfolio holdings being hedged. Such imperfect correlation may prevent the Partnership from
achieving the intended hedge or expose the Partnership to risk of loss. The successful utilization
of hedging and risk management transactions requires skills complementary to those needed in
the selection of the Partnership’s portfolio holdings.
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Short Selling. Short selling involves selling securities which are not owned and
borrowing them for delivery to the purchaser, with an obligation to replace the borrowed
securities at a later date. Short selling allows the investor to profit from declines in market prices
to the extent such decline exceeds the transaction costs and the costs of borrowing the securities.
The extent to which the Partnership engages in short sales will depend upon the Investment
Manager’s investment strategy and opportunities. A short sale creates the risk of a theoretically
unlimited loss, in that the price of the underlying security could theoretically increase without
limit, thus increasing the cost to the Partnership of buying those securities to cover the short
position. There can be no assurance that the Partnership will be able to maintain the ability to
borrow securities sold short. In such cases, the Partnership can be “bought in” (i.e., forced to
repurchase securities in the open market to return to the lender). There also can be no assurance
that the securities necessary to cover a short position will be available for purchase at or near
prices quoted in the market. Purchasing securities to close out the short position can itself cause
the price of the securities to rise further, thereby exacerbating the loss.
Forward Trading. The Partnership may invest in forward contracts and options thereon,
which, unlike futures contracts, are not traded on exchanges, and are not standardized; rather,
banks and dealers act as principals in these markets, negotiating each transaction on an
individual basis. Forward and “cash” trading is substantially unregulated; there is no limitation
on daily price movements and speculative position limits are not applicable. For example, there
are no requirements with respect to record-keeping, financial responsibility or segregation of
customer funds or positions. In contrast to exchange-traded futures contracts, interbank traded
instruments rely on the dealer or counterparty being contracted with to fulfill its contract. As a
result, trading in interbank non-U.S. exchange contracts may be subject to more risks than
futures or options trading on regulated exchanges including, but not limited to, the risk of default
due to the failure of a counterparty with which the Partnership has forward contracts. Although
the Investment Manager seeks to trade with responsible counterparties, failure by a counterparty
to fulfill its contractual obligation could expose the Partnership to unanticipated losses. The
principals who deal in the forward markets are not required to continue to make markets in the
currencies or commodities they trade and these markets can experience periods of illiquidity,
sometimes of significant duration. There have been periods during which certain participants in
these markets have refused to quote prices for certain currencies or commodities or have quoted
prices with an unusually wide spread between the price at which they were prepared to buy and
that at which they were prepared to sell. Disruptions can occur in any market traded by the
Partnership due to unusually high or low trading volume, political intervention or other factors.
The imposition of credit controls by government authorities might also limit such forward (and
futures) trading to less than that which the Investment Manager would otherwise recommend, to
the possible detriment of the Partnership. Neither the CFTC nor banking authorities regulate
forward currency trading through banks. In respect of such trading, the Partnership would be
subject to the risk of counterparty failure or the inability or refusal by a counterparty to perform
with respect to such contracts. Market illiquidity or disruption could result in major losses to the
Partnership.
Futures Contracts. The Partnership may trade in futures contracts (and options on
futures). Futures positions may be illiquid because, for example, most U.S. commodity
exchanges limit fluctuations in certain futures contract prices during a single day by regulations
referred to as “daily price fluctuation limits” or “daily limits.” Under such daily limits, during a
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single trading day no trades may be executed at prices beyond the daily limits. Once the price of
a contract for a particular future has increased or decreased by an amount equal to the daily limit,
positions in the future can neither be taken nor liquidated unless traders are willing to effect
trades at or within the limit. Futures contract prices on various commodities or financial
instruments occasionally have moved the daily limit for several consecutive days with little or no
trading. Similar occurrences could prevent the Partnership from promptly liquidating
unfavorable positions and subject the Partnership to substantial losses. In addition, the
Partnership may not be able to execute futures contract trades at favorable prices if trading
volume in such contracts is low. It is also possible that an exchange or a regulator (such as the
Securities and Exchange Commission (the “SEC”) or the CFTC) may suspend trading in a
particular contract, order immediate liquidation and settlement of a particular contract or order
that trading in a particular contract be conducted for liquidation only. In addition, the CFTC and
various exchanges impose speculative position limits on the number of positions that may be
held in particular commodities. Trading in commodity futures contracts and options are highly
specialized activities that may entail greater than ordinary investment or trading risks.
Furthermore, low margin or premiums normally required in such trading may provide a large
amount of leverage, and a relatively small change in the price of a security or contract can
produce a disproportionately larger profit or loss.
Highly Volatile Markets. The prices of derivative instruments, including option prices,
can be highly volatile. Price movements of derivative contracts in which the Partnership’s assets
may be invested are influenced by, among other things, interest rates, changing supply and
demand relationships, trade, fiscal, monetary and exchange control programs and policies of
governments, and national and international political and economic events and policies. In
addition, governments from time to time intervene, directly and by regulation, in certain markets,
particularly those in currencies, financial instruments, futures and options. Such intervention
often is intended directly to influence prices and may, together with other factors, cause all of
such markets to move rapidly in the same direction because of, among other things, interest rate
fluctuations. The portfolio also is subject to the risk of the failure of any exchanges on which its
positions trade or of their clearinghouses.
Counterparty Risk. Some of the markets in which the Partnership may effect
transactions are “over-the-counter” or “interdealer” markets. The participants in such markets
are typically not subject to the same credit evaluation and regulatory oversight as are members of
“exchange-based” markets. In addition, many of the protections afforded to participants on some
organized exchanges, such as the performance guarantee of an exchange clearinghouse, might
not be available in connection with such “over-the-counter” transactions. This exposes the
Partnership to the risk that a counterparty will not settle a transaction in accordance with its
terms and conditions because of a dispute over the terms of the contract (whether or not bona
fide) or because of a credit or liquidity problem, thus causing the Partnership to suffer a loss.
Such “counterparty risk” is accentuated for contracts with longer maturities where events may
intervene to prevent settlement, or where the Partnership has concentrated its transactions with a
single or small group of counterparties. The Investment Manager is not restricted from dealing
with any particular counterparty or from concentrating any or all of the Partnership’s transactions
with one counterparty. Moreover, the Investment Manager has no formal credit function which
evaluates the creditworthiness of the Partnership’s counterparties. The ability of the Partnership
to transact business with any one or number of counterparties, the lack of any meaningful and
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independent evaluation of such counterparties’ financial capabilities and the absence of a

regulated market to facilitate settlement may increase the potential for losses by the Partnership.
Swap Agreements. The Partnership may enter into swap agreements. Swap agreements
are individually negotiated and can be structured to include exposure to a variety of different
types of investments or market factors. Depending on their structure, swap agreements may
increase or decrease the Partnership’s exposure to long-term or short-term interest rates (in the
United States or abroad), non-U.S. currency values, corporate borrowing rates, or other factors
such as security prices, baskets of equity securities or inflation rates. Swap agreements can take
many different forms and are known by a variety of names. The Partnership is not limited to any
particular form of swap agreement if consistent with the Partnership’s investment objective and
policies.
Swap agreements tend to shift the Partnership’s investment exposure from one type of
investment to another. For example, if the Partnership agrees to exchange payments in dollars
for payments in non-U.S. currency, the swap agreement would tend to decrease the Partnership’s
exposure to U.S. interest rates and increase its exposure to non-U.S. currency and interest rates.
Depending on how they are used, swap agreements may increase or decrease the overall
volatility of the Partnership’s portfolio. The most significant factor in the performance of swap
agreements is the change in the specific interest rate, currency, individual equity values or other
factors that determine the amounts of payments due to and from the Partnership. If a swap
agreement calls for payments by the Partnership, the Partnership must be prepared to make such
payments when due. This is only true in default and not part of mark-to-market. In addition, if a
counterparty’s creditworthiness declines, the value of swap agreements with such counterparty
can be expected to decline, potentially resulting in losses by the Partnership.
Other Derivative Instruments. The Partnership may take advantage of opportunities

with respect to certain other derivative instruments that are not presently contemplated for use or
that are currently not available, but that may be developed, to the extent such opportunities are
both consistent with the investment objective of the Partnership and legally permissible. Special
risks may apply to instruments that are invested in by the Partnership in the future that cannot be
determined at this time or until such instruments are developed or invested in by the Partnership.
Certain swaps, options and other derivative instruments may be subject to various types of risks,
including market risk, liquidity risk, the risk of nonperformance by the counterparty, including
risks relating to the financial soundness and creditworthiness of the counterparty, legal risk and
operations risk.
Fixed Income Securities and Loans. The Partnership may invest in bonds or other
fixed income securities of U.S. and non-U.S. issuers, including, without limitation, bank debt,
bonds, notes, debentures and commercial paper, as well as derivatives thereon. Fixed income
securities pay fixed, variable or floating rates of interest. The value of fixed income securities in
which the Partnership invests will change in response to fluctuations in interest rates. In
addition, the value of certain fixed income securities and bank loans can fluctuate in response to
perceptions of creditworthiness, foreign exchange rates, political stability or soundness of
economic policies. Fixed income securities and bank loans are subject to the risk of the issuer’s
inability to meet principal and interest payments on its obligations (i.e., credit risk) and are
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subject to price volatility due to such factors as interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity (i.e., market risk).
Convertible Securities. Convertible securities are bonds, debentures, notes, preferred

stocks or other securities that may be converted into or exchanged for a specified amount of
common stock of the same or different issuer within a particular period of time at a specified
price or formula. A convertible security entitles the holder to receive interest that is generally
paid or accrued on debt or a dividend that is paid or accrued on preferred stock until the
convertible security matures or is redeemed, converted or exchanged. Convertible securities
have unique investment characteristics in that they generally (i) have higher yields than common
stocks, but lower yields than comparable non-convertible securities, (ii) are less subject to
fluctuation in value than the underlying common stock due to their fixed income characteristics
and (iii) provide the potential for capital appreciation if the market price of the underlying
common stock increases.
The value of a convertible security is a function of its “investment value” (determined by

its yield in comparison with the yields of other securities of comparable maturity and quality that
do not have a conversion privilege) and its “conversion value” (the security’s worth, at market
value, if converted into the underlying common stock). The investment value of a convertible
security is influenced by changes in interest rates, with investment value declining as interest
rates increase and increasing as interest rates decline. The credit standing of the issuer and other
factors may also have an effect on the convertible security’s investment value. The conversion
value of a convertible security is determined by the market price of the underlying common
stock. If the conversion value is low relative to the investment value, the price of the convertible
security is governed principally by its investment value. To the extent the market price of the
underlying common stock approaches or exceeds the conversion price, the price of the
convertible security will be increasingly influenced by its conversion value. A convertible
security generally will sell at a premium over its conversion value by the extent to which
investors place value on the right to acquire the underlying common stock while holding a fixed
income security. Generally, the amount of the premium decreases as the convertible security
approaches maturity.
A convertible security may be subject to redemption at the option of the issuer at a price
established in the convertible security’s governing instrument. If a convertible security held by
the Partnership is called for redemption, the Partnership will be required to permit the issuer to
redeem the security, convert it into the underlying common stock or sell it to a third party. Any
of these actions could have an adverse effect on the Partnership’s ability to achieve its
investment objective.
Diversification. Since the Partnership’s portfolio is generally concentrated in securities

of 20-60 companies, the investment risk is greater than if the portfolio were invested in a larger
number of securities.
Non-U.S. Investments. The Partnership may invest a portion of its assets in securities of
non-U.S. corporations that are traded in non-U.S. markets. Investing in the securities of
companies in non-U.S. countries involves certain considerations not usually associated with
investing in securities of U.S. companies or U.S. markets, including political and economic
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considerations, such as greater risks of expropriation and nationalization, confiscatory taxation,

the potential difficulty of repatriating funds, general social, political and economic instability and
adverse diplomatic developments; the possibility of imposition of withholding or other taxes on
dividends, interest, capital gain or other income; the small size of the securities markets in such
countries 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; and certain government policies that may restrict the portfolio’s investment
opportunities. In addition, accounting and financial reporting standards that prevail in such
countries generally are not equivalent to U.S. standards and, consequently, less information is
available to investors in companies located in such countries than is available to investors in
companies located in the U.S. There is also less regulation, generally, of the securities markets
in such countries than there is of the U.S. securities markets.
Portfolio Turnover. The Partnership’s investment program may involve frequent

trading, which may result in higher investment costs and charges to the Partnership and a
substantially greater percentage of the Partnership’s income consisting of ordinary income or
short-term capital gain than long-term capital gain for Federal income tax purposes.
Business and Regulatory Risks of Hedge Funds. Legal, tax and regulatory changes
could occur during the term of the Partnership that may adversely affect the Partnership. The
regulatory environment for hedge funds is evolving and changes in the regulation of hedge funds
may adversely affect the value of investments held by the Partnership and the ability of the
Partnership to obtain the leverage it might otherwise obtain or to pursue its trading strategies. In
addition, the securities and futures markets are subject to comprehensive statutes, regulations and
margin requirements. The SEC, other regulators and self-regulatory organizations and
exchanges are authorized to take extraordinary actions in the event of market emergencies. The
regulation of derivatives transactions and funds that engage in such transactions is an evolving
area of law and is subject to modification by government and judicial action. The effect of any
future regulatory change on the Partnership could be substantial and adverse.
Requests for Information. The Partnership may be compelled to provide information,

subject to a request for information made by a regulatory or governmental authority or agency.
Disclosure of confidential information under such laws shall not be regarded as a breach of any
duty of confidentiality and, in certain circumstances, the Partnership, director or agent, may be
prohibited from disclosing that the request has been made.
Cybersecurity Risk. The operations of the General Partner, Investment Manager and
Partnership are dependent on technology information and communication systems. A failure of
any such system or a security breach or cyber-attack could significantly disrupt the General
Partner or Investment Manager’s operations and those of the Partnership or the Partnership. The
service providers of the General Partner, Investment Manager, Partnership and the Partnership
are subject to the same cyber-security threats as the General Partner, Investment Manager,
Partnership and the Mater Fund. If a service provider fails to adopt, implement or adhere to
adequate cyber-security measures, or in the event of a breach of its networks, information
relating to the Partnership, the Partnership’s operations and personal information relating to
Limited Partners may be lost, damaged or corrupted or improperly accessed, used or disclosed.
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Any system failure, security breach or cyber-attack on the General Partner, Investment
Manager, Partnership, or any of their service providers, could cause the General Partner,
Investment Manager and/or Partnership to suffer, among other things, financial loss, disruption
to its business, including its trading capabilities and the ability of the Partnership to transmit
payments, including to Limited Partners, increased operating costs, liability to third parties,
regulatory intervention and reputational damage and could have a material adverse effect on the
Partnership and Limited Partners' investments in the Partnership or the Partnership's investments.
Tax Risks. The following are just a few tax aspects prospective investors should
consider in evaluating the purchase of Interests. See “TAX ASPECTS” for a discussion of
various tax aspects of this offering.
Taxation as a Partnership. It is anticipated that the Partnership will be characterized as a

partnership and not as an association or a publicly traded partnership (“PTP”) taxable as a
corporation for U.S. Federal income tax purposes. Accordingly, the Partnership should not be
subject to U.S. Federal income tax. Rather, each Limited Partner will be required to report on its
own annual tax return its distributive share of the Partnership’s taxable income or loss for the
taxable year of the Partnership ending within or with such taxable year of such Limited Partner,
regardless of whether the Partnership distributes its taxable income. If the Partnership were
treated as a PTP taxable as an association, it would be subject to U.S. corporate income tax at
rates of up to twenty-one percent (21%), and possibly to U.S. state and local corporate taxes.
Taxable Income May Exceed Cash Distributions. The Federal income tax liability of a
taxable investor resulting from the disposition by the Partnership of investments, the disposition
of an Interest or the ongoing operations of the Partnership, including the Partnership’s share of
the income, gain, loss or deductions, may substantially exceed the cash, if any, received by the
investor as a result of such disposition or operations.
Income from Investment Activities. A significant portion of the Partnership’s income

allocated to investors may be taxable as ordinary income and short-term capital gains as a result
of the investments made, and investment techniques used, by the Partnership.
Medicare Tax. An additional 3.8% Medicare tax is imposed on certain net investment
income (including all or a portion of any net gains from the sale of a Partnership Interest and an
allocable share of the Partnership’s interest, dividends and net gains) of U.S. individuals, estates
and trusts to the extent that such person’s “modified adjusted gross income” (in the case of an
individual) or “adjusted gross income” (in the case of an estate or trust) exceeds a threshold
amount.
Risk of Audit of the Partnership; Penalties and Interest. Pursuant to the U.S. Bipartisan
Budget Act of 2015, as amended, or any similar state or local tax rules (“BBA”), the Internal
Revenue Service (“IRS”) is generally permitted to determine adjustments to items of income,
gain, deduction, loss or credit of the Partnership, and assess and collect taxes attributable thereto
(including any applicable penalties and interest), at the Partnership level. Although certain
elections or other procedures may be available to mitigate the impact of such determination,
assessment or collection, there can be no assurances that the Partnership will avoid, or be able to
avoid, any entity-level determination, assessment or collection. In addition, any such elections or
procedures may have differing results on the tax liability of Limited Partners depending on the
tax status of each Limited Partner, and the Partnership may not be able to take into account the
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particular facts or circumstances of a Limited Partner. A Limited Partner may be required to bear
a share of the economic burden of taxes so assessed or collected without regard to whether such
person was a Limited Partner, or without regard to his relative ownership interest, during the
taxable year of the Partnership to which such taxes relate. Each partnership required to file, or
that files, a U.S. income tax return, must designate a representative under the BBA (such
representative for the Partnership, the “Partnership Representative”) with the sole authority to act
on behalf of, and to bind, the partnership, its partners and any other person whose tax liability is
determined by taking into account adjustments under the BBA. Limitations on the authority of
the Partnership Representative in the Partnership Agreement or in any other agreement will not
be binding during examinations upon audit or any other proceedings. In addition, Limited
Partners will not be able to participate in any such examinations or proceedings without
permission of the IRS. Limited Partners should note that the BBA regime is complex and that the
impact on any current or future allocations made or cash available for distributions or
withdrawals by the Partnership is uncertain. The Partnership may also be exposed to the risk that
these rules apply to any entity treated as a partnership for U.S. federal income tax purposes in
which the Partnership directly or indirectly invests. The legal and accounting costs incurred in
connection with any audit of the Partnership will be borne by the Partnership. The cost of any
audit of any Limited Partner will be borne solely by the Limited Partner. Prospective Limited
Partners should consult their own tax advisors in this regard
Schedule K-1. A Schedule K-1 for Limited Partners of the Partnership may not be
available by April 15. As a result, Limited Partners may be required to obtain extensions of
the filing date of their income tax returns at the Federal, state and local levels.
BECAUSE THE TAX ASPECTS OF THE OFFERING ARE COMPLICATED AND

CERTAIN OF THE TAX CONSEQUENCES MAY DIFFER MARKEDLY FOR DIFFERENT
INVESTORS, PROSPECTIVE SUBSCRIBERS SHOULD CONSULT THEIR OWN TAX
ADVISORS IN EVALUATING THE TAX ASPECTS OF AN INVESTMENT IN THE
PARTNERSHIP.
The foregoing list of risk factors does not purport to be a complete enumeration or
explanation of the risks involved in an investment in the Partnership. Prospective investors
should read this entire Confidential Memorandum and consult with their own legal, tax
and financial advisors before deciding to invest in the Partnership.
OTHER ACTIVITIES OF THE GENERAL PARTNER AND THE INVESTMENT

MANAGER
The General Partner, and STP Investment Partners, LLC, the parent company of the
General Partner and the Investment Manager and their affiliates (collectively, for the purposes of
this section, “STPIP”) and their partners, officers and employees, including those who may be
involved in the investment activities and business operations of the Partnership will be engaged
in businesses related and unrelated to the Partnership.
STPIP was formed with the intent of being a leading provider of specialty investment
products that address the capital presentation and growth needs of high net worth and
institutional investors. As such, STPIP may be actively engaged in transactions in the same
securities and instruments in which the assets of the Partnership are invested. Subject to
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applicable law and internal policies designed to comply with such laws, STPIP may purchase or
sell the securities of, or otherwise invest in or finance, issuers in which the Partnership has an
interest. STPIP may also have proprietary interests in, and may manage or advise, other
accounts or investment funds (collectively, “Other Accounts”) that have investment objectives
similar or dissimilar to those of the Partnership and which engage in transactions in the same
types of securities and instruments in which the Partnership is transacting. STPIP is not under
any obligation to share any investment opportunity, idea or strategy with the Partnership. As a
result, STPIP may compete with the Partnership for appropriate investment opportunities.
The proprietary activities or portfolio strategies of STPIP, or the activities or strategies

used for Other Accounts managed by STPIP, could conflict with the transactions and strategies
employed on behalf of the Partnership and affect the prices and availability of the securities and
instruments in which the Partnership may invest. Such transactions may be executed
independently of the Partnership’s transactions, and thus at prices or rates that may be more or
less favorable. Issuers of securities held by the Partnership may have publicly or privately traded
securities in which STPIP is an investor. STPIP’s trading activities are carried out generally
without reference to positions held by the Partnership and may have an effect on the value of the
positions so held, or may result in STPIP having an interest in the issuer adverse to that of the
Partnership (e.g., STPIP may have a short position in a security held long by the Partnership).
The results of the Partnership may differ significantly from the results achieved by STPIP
for its proprietary accounts or Other Accounts managed by them and from the results achieved
by the General Partner or the Investment Manager for other advised accounts (including
investment companies and collective investment vehicles). When the Investment Manager seeks
to purchase or sell the same assets for the Partnership and other clients, including accounts in
which STPIP may have an interest, the assets actually purchased or sold may be allocated among
such accounts on a basis determined in the good faith sole discretion of the Investment Manager
to be equitable, including the relative amounts of capital available for new investments,
investment time horizons, relative exposure to short-term market trends, investment programs
and current portfolio positions. In some cases, such decisions may adversely affect the size or
the price of the assets purchased or sold for the Partnership.
From time to time, the Partnership’s activities may be restricted because of regulatory
requirements applicable to STPIP. Notwithstanding the preceding sentence, STPIP has instituted
internal policies designed to limit the applicability of certain of such requirements.
The Partnership is structured to give taxable U.S. investors in the Partnership and non-
U.S. investors and tax-exempt U.S. investors in the Offshore Fund an opportunity to participate
in the same investment program, although it will generally not structure its investments so as to
maximize the tax benefits available for one fund or the other. However, the portfolios of the
Partnership and the Offshore Fund may differ to the extent that investments are made directly by
one that are not made by the other. This could occur as a result of various reasons, including,
without limitation, because of different cash flows or tax and regulatory considerations
applicable to the Partnership and the Offshore Fund.
Future activities of STPIP may give rise to additional conflicts of interest. Placement
agents or distributors that may solicit investors on behalf of the Partnership will be subject to a
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conflict of interest because they will be compensated in connection with their solicitation
activities. Limited Partners may be required to pay a placement fee at the time of purchase
directly to a placement agent or distributor. Such fees will not constitute assets of the
Partnership. The Investment Manager may also pay a placement fee to a placement agent or
distributor based upon a percentage of the Management Fee. If an investor is introduced to the
Partnership through a placement agent, the arrangement, if any, with such placement agent will
be disclosed to, and acknowledged by, the subscriber.
BROKERAGE COMMISSIONS; TURNOVER
Portfolio transactions for the Partnership are allocated to brokers on the basis of best
execution and in consideration of such brokers’ ability to effect such transactions, their facilities,
reliability and financial responsibility, and in consideration of such brokers’ provision or
payment of the costs of research and brokerage products or services which are of benefit to the
Investment Manager, the Partnership and Other Accounts managed by the Investment Manager
and its affiliates. Accordingly, the commissions and other transaction fees charged to the
Partnership by brokers in the foregoing circumstances may be higher than those charged by other
brokers who may not offer such products or services.
Research products and services may include research reports on particular industries and
companies, economic surveys and analyses, recommendations as to specific securities, and other
products and services providing lawful and appropriate assistance to the Investment Manager in
the performance of its investment decision-making responsibilities.
The use of commissions or “soft dollars” (or dealer markup or markdowns arising in
connection with riskless principal transactions) to pay for research products or services will fall
within the safe harbor created by Section 28(e) of the Exchange Act. Under Section 28(e),
research products or services obtained with soft dollars generated by the Partnership may be used
to service accounts other than the Partnership (i.e., Other Accounts). Where a product or service
obtained with soft dollars provides both research and non-research (e.g., a “mixed use” item), the
Investment Manager will make a reasonable allocation of the cost which may be paid for with
soft dollars.
The Partnership’s securities transactions can be expected to generate brokerage

commissions and other compensation, all of which the Partnership, not the Investment Manager,
will be obligated to pay. The Investment Manager has sole discretion in deciding what brokers
and dealers the Partnership will use and the Investment Manager negotiates the rates of
compensation the Partnership will pay. In addition to using brokers as “agents” and paying
commissions, the Partnership may buy or sell securities directly from or to dealers acting as
principals at prices that include markups or markdowns, and may buy securities from
underwriters or dealers in public offerings at prices that include compensation to the
underwriters and dealers.
From time to time, the Partnership may execute over-the-counter trades on an agency
basis rather than on a principal basis. In these situations, the broker used by the Partnership may
acquire or dispose of a security through a market-maker (a practice known as “interpositioning”).
The transaction may thus be subject to both a commission and a markup or markdown. The
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Investment Manager believes that the use of a broker in such instances is consistent with its duty
of obtaining best execution. The use of a broker can provide anonymity in connection with a
transaction. In addition, a broker may, in certain cases have, greater expertise or greater
capability in connection with both accessing the market and executing a transaction.
Brokers sometimes suggest a level of business they would like to receive in return for the
various products and services they provide. Actual brokerage business received by any broker
may be less than the suggested allocation, but can (and often does) exceed the suggested level,
because total brokerage is allocated on the basis of all of the considerations described above. A
broker is not excluded from receiving business because it has not been identified as providing
research and brokerage products or services. Investment information received from the
Partnership’s brokers may be used by the Investment Manager in servicing Other Accounts, and
not all such information need be used by the Investment Manager in connection with the
Partnership. Nonetheless, the Investment Manager believes that such investment information
provides the Partnership with benefits by supplementing the research otherwise available to the
Partnership.
The Partnership’s investment program emphasizes active management of the

Partnership’s portfolio. Consequently, the Partnership’s portfolio turnover and brokerage
commission expenses may exceed those of other investment entities of comparable size.
The Partnership has entered into a prime brokerage agreement with BTIG (the “Prime
Broker”). Pursuant to the terms of such agreement, the services provided by the Prime Brokers
may include the provision to the Partnership of, among other services, margin financing,
clearing, settlement, stock borrowing and foreign exchange facilities and the entry into,
settlement or making or receiving delivery or payment in relation to transactions entered into by
the Partnership.
ADMINISTRATOR
The Partnership has entered into an Administration Agreement (the “Administration

Agreement”) with STP Investment Services, LLC. (the “Administrator”) to perform certain
financial, accounting, corporate, administrative and other services on behalf of the Partnership.
The fee payable to the Administrator is based on its standard schedule of fees charged by the
Administrator for similar services.
The Administration Agreement is for an initial term of three years and automatically
renews for successive one-year terms thereafter; provided that the Administration Agreement is
subject to termination by the Administrator or by the Partnership as of the last day of the initial
term or any renewal term upon 90 days written notice. The Administration Agreement provides
that the Partnership will indemnify and hold harmless the Administrator against any actions,
proceedings and claims and against any costs, demands and expenses in connection therewith
which may be brought against, suffered or incurred by the Administrator in the performance of
its obligations and duties, except that the Administrator will not be indemnified against any
liability to which it would be subject by reason of the gross negligence, bad faith, fraud or willful
or reckless disregard of the Administrator.
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FISCAL YEAR
The Partnership’s fiscal year is the 12-month period ending on December 31.
LIMITED PARTNERSHIP AGREEMENT
The rights and obligations of the Limited Partners are governed by the Limited
Partnership Agreement. PROSPECTIVE INVESTORS ARE ENCOURAGED TO READ
THE LIMITED PARTNERSHIP AGREEMENT IN ITS ENTIRETY and consult with their
own legal counsel concerning their rights and obligations before subscribing for Interests. A
copy of the Limited Partnership Agreement of the Partnership will be made available to any
person intending to subscribe for Interests. No summary of the Limited Partnership Agreement
appears in this Confidential Memorandum.
TAX ASPECTS
The following is a summary of certain of the Federal income tax consequences that might
affect, or result from, an investment in the Partnership and the Partnership’s investment in the
Partnership. It is based upon the Internal Revenue Code of 1986, as amended (the “Code”), rules
and regulations (the “Treasury Regulations” or “Regulations”) promulgated thereunder,
published rulings and court decisions, all as in effect on the date of this Memorandum. This
summary does not discuss all of the tax consequences that may be relevant to a particular
investor. Except as specifically indicated, the following general discussion (i) assumes that each
investing Limited Partner is an individual who is a U.S. citizen or resident that is not tax-exempt
and that each investing Limited Partner holds its Interest as a capital asset and is the initial holder
of such Interest and (ii) does not deal with the consequences of the ownership of an Interest in
the Partnership by special classes of holders such as banks, thrifts, insurance companies, dealers,
traders in securities that elect to mark their securities portfolios to market and other investors that
do not own their Interests as capital assets.
This summary assumes that any distributions from the Partnership will be made in cash
only. No advance rulings have been or will be sought from the IRS regarding any matter
discussed in this Memorandum, and the Partnership or Partnership might not seek written
opinions of counsel as to any specific matter. Accordingly, investors are urged to consult their
tax advisers to determine the Federal, state, local and foreign income and other tax consequences
to them of acquiring, holding and disposing Interests.
Any discussion of Federal tax issues in this Memorandum is not intended or written
to be used as tax advice. Potential investors and Partners are hereby notified that: (A) any
discussion of Federal tax issues in this Memorandum is not intended or written to be used,
and it cannot be used by any potential investor or Partner, for the purpose of avoiding
penalties that may be imposed on any such person or entity under the Internal Revenue
Code; (B) such discussion is written to support the promotion or marketing of the
transactions or matters addressed herein; and (C) potential investors and Partners should
seek advice based on their particular circumstances from an independent tax advisor (i.e., a
tax advisor other than the General Partner, its affiliates or persons providing professional
services or advice to the Partnership).
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As discussed below, certain “reportable transactions” require that participants and certain
other persons file disclosure statements with the IRS, and impose significant penalties for the
failure to do so. (See “Tax Shelter Reporting” below). An investor (and each employee,
representative, or other agent of the investor) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of an investment in the Partnership
and all materials of any kind (including opinions or other tax analyses) that are provided to the
investor relating to such tax treatment and tax structure. Any such disclosure of the tax
treatment, tax structure and other tax-related materials shall not be made for the purpose of
offering to sell the Interests offered hereby or soliciting an offer to purchase any such Interests.
For purposes of this paragraph, the terms “tax treatment,” “tax structure,” and “tax analyses”
have the meaning given to such terms under Treasury Regulation Section 1.6011-4(c).
It is not expected that an investment in the Partnership will generate substantial

deductions that will be available to offset taxable income of the typical investor from other
sources. No representation is made in this section of the Memorandum or elsewhere in the
Memorandum as to the tax consequences of the operation of the Partnership.
Tax Treatment of Partnership Operations
Partnership Status. The Partnership and the Partnership intend to be classified as

partnerships for U.S. Federal income tax purposes and not as associations taxable as
corporations. As partnerships, the Partnership itself will not be subject to U.S. Federal income
tax. Whether the Partnership will be treated as a partnership under the various state and local
laws that may apply to Limited Partners depends on the specific laws of each such jurisdiction.
Publicly Traded Partnership Status. Even if the Partnership is otherwise properly

classified as a partnership, they may nonetheless be taxed as a corporation if it is classified as a
“publicly traded partnership” (“PTP”) under Code Section 7704. A partnership is a PTP if
interests in the partnership are either (i) traded on an established securities market or (ii) readily
tradable on a secondary market or the substantial equivalent thereof under the regulations.
Although Interests in the Partnership will not be tradable on an established securities market,
because such Interests may be redeemed under certain circumstances, they could be considered
to be readily tradable on a secondary market or its economic equivalent.
The Treasury Regulations set forth several “safe harbors” pursuant to which secondary
market treatment does not apply. One such safe harbor provides that a partnership will not be
treated as readily tradable on a secondary market or the substantial equivalent thereof if (a) all
interests in the partnership were issued in a transaction (or transactions) not registered under the
Securities Act, and (b) the partnership does not have more than 100 partners. For purposes of
determining the number of partners in a partnership, an anti-avoidance rule may apply in the case
of a partner that is a partnership, grantor trust, or S corporation.
Further, under the Code, a publicly traded partnership is not treated as a corporation for
tax purposes if 90% or more of its gross income consists of “qualifying income.” For this
purpose, qualifying income includes, among other items, interest, dividends and gain from the
sale or disposition of a capital asset held to produce such income. The Partnership expects that at
least 90% of its gross income will be “qualifying income.”
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The Treasury Regulations specifically provide that the fact that a partnership does not
qualify for the safe harbors is disregarded for purposes of determining whether interests in a
partnership are readily tradable on a secondary market (or the substantial equivalent thereof).
Rather, in this event the partnership’s status is examined under a general facts and circumstances
test. The General Partner intends to operate the Partnership in such a manner to avoid
classification as a publicly traded partnership under the Code and Treasury Regulations.
If it were determined that the Partnership should be treated as an association or a publicly

traded partnership taxable as a corporation for Federal tax purposes (as a result of a successful
challenge by the IRS to the Partnership’s position that it is classified as a partnership, changes in
the Code, the Treasury Regulations or judicial interpretations thereof, a material adverse change
in facts, or otherwise), the taxable income of the Partnership would be subject to corporate
income tax when recognized by the Partnership; distributions of such income other than in
connection with certain withdrawals of Interests, would be treated as dividend income when
received by the Partners to the extent of the current or accumulated earnings and profits of the
Partnership; and Partners would not be entitled to report profits or losses realized by the
Partnership.
The Partnership operates as a partnership for Federal tax purposes and not as an entity
taxable as a corporation. If the Partnership were determined to be taxable as a corporation,
however, it would be subject to regular U.S. federal corporate income tax, plus a 30% branch
profits tax, on its income (if any) effectively connected with a U.S. trade or business, and any
distributions to the Partnership would be taxable as dividends to the extent of the earnings and
profits of the Partnership. In addition, the Partnership could be classified as either a “controlled
foreign corporation,” or more likely, as a “passive foreign investment company” (“PFIC”),
which could result in adverse tax consequences to the Partners, including in the case of a PFIC
the imposition of an interest charge on certain amounts treated as having been deferred by the
Partners. Unless otherwise indicated, references in the following discussion to the tax
consequences of Partnership investments, activities, income, gain and loss, include the direct
investments, activities, income, gain and loss of the Partnership, and those indirectly attributable
to the Partnership as a result of it being a member of the Partnership, and further assumes that the
Partnership will be treated as partnerships and not as publicly traded partnerships for federal
income tax purposes.
Partners, Not Partnership, Subject to Tax. The Partnership if recognized as a

partnership for tax purposes, will not itself be liable for any U.S. Federal income tax. Rather,
each Partner in the Partnership will be required to take into account in computing his Federal
income tax liability his allocable share of the Partnership’s income, gains, deductions, losses, and
items of tax preference for any taxable year of the Partnership ending within or with the taxable
year of such Partner, without regard to whether he has received or will receive any distribution
from the Partnership. The characterization of an item of profit or loss usually will be determined
at the Partnership (rather than at the Partner) level.
Because the Partnership does not contemplate making cash distributions to Partners, the
amount of income that may be realized by a Partner likely will exceed the cash distributed to
him.
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Allocations of Profits and Losses. Under Section 704(b) of the Code, a Partner’s
allocable share of partnership items of income, gain, loss, deduction or credit will be governed
by the Limited Partnership Agreement if such allocations have “substantial economic effect” or
are determined to be in accordance with such Partner’s “interest” in the Partnership. The
Partnership believes that the allocations set forth in the Limited Partnership Agreement should be
respected for U.S. Federal income tax purposes. However, if the allocations that are made
pursuant to the Limited 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 Partnership, taking into
account all of the facts and circumstances. In some instances, this could result in a Partner
recognizing an amount of income, gain, loss or deduction at a different time than pursuant to the
terms of the Agreement.
In addition, there are other rules that may limit and/or affect the amount, character or
timing of certain items of Partnership income, gain, loss, deduction or credit, and the allocations
of such items to the Partners. These include (but are not limited to) rules relating to
contributions of appreciated property, contributions of property with “built-in losses,” and
mandatory partnership basis adjustments incident to transfers of property between partners and a
partnership and certain transfers of partnership interests.
Limitation on Deduction of Expenses. Some of the expenses incurred by the

Partnership will be syndication expenses, which are not deductible by the Partnership or any
Partner. Expenses incident to the creation of a partnership above a certain threshold
(organization expenses) must be capitalized and, at the election of the partnership, may be
deducted ratably over a period of not less than 180 months (a limited portion may be currently
deducted). Amortization of such organizational expenses is a divergence from GAAP, but may,
in the General Partner’s determination, be more equitable than requiring the initial Limited
Partners to bear all of such organizational expenses as would otherwise be required under
GAAP. Also, miscellaneous itemized deductions of a non-corporate Limited Partner, which
include investment expenses, are not currently deductible. As of 2026, miscellaneous itemized
deductions will be deductible only to the extent they exceed 2% of the taxpayer’s adjusted gross
income and, for individuals, will be subject to the overall limitation on itemized deductions
applicable to individuals with income above certain thresholds, and would not be deductible at
all for purposes of the alternative minimum tax. These limitations do not apply to Partners that
are corporations.
It should also be noted that the IRS could attempt to recharacterize the Incentive
Allocation allocated to the General Partner as a Partnership expense rather than as an allocation
of Partnership profits. If the IRS were to prevail, the effect would be to increase each Limited
Partner’s share of Partnership income by its distributive share of the Incentive Allocation
(without any increase in the amount it is entitled to withdraw from the Partnership) and subject
its distributive share of these additional expenses to the limitations on the deduction of expenses
described above. In addition, any portion of the Incentive Allocation that the Partnership pays to
placement agents that introduce qualified investors to the Partnership will generally not be
characterized as an allocation of Partnership profits, but rather will be treated as a Partnership
expense (which may be specially allocated to each Limited Partner introduced by such placement
agents).
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Whether or not general and administrative expenses of the Partnership, such as the
Management Fee, may be subject to the above limitations, they may (except to the extent they
may be allocated to a passive activity subject to the rules of Code Section 469) constitute
“investment expenses” which will reduce a Limited Partner’s “net investment income” for
purposes of the limitation on the deductibility of investment interest under Code Section 163(d).
Limitation on Deduction of Interest. The Code imposes limitations on the deductibility

of certain types of interest by non-corporate taxpayers. Generally, investment interest is
deductible only to the extent of net investment income. These rules would apply to interest
expense incurred by a Partner to purchase or carry his Interests, and to a Partner’s share of
interest expense incurred by the Partnership, except to the extent that the Partnership is deemed
to be engaged in a trade or business. Also, interest earned on the Partnership’s temporary
investment of working capital reserves and any other portfolio income realized by the
Partnership would be treated as investment income. However, long-term capital gain and
qualified dividend income (dividends that are taxable as net capital gain) are excluded from the
definition of net investment income, unless the taxpayer makes a special election to treat those
amounts as ordinary income rather than as long-term capital gain. The investment interest
limitation would also apply to a noncorporate Partner’s share of the interest and short sale
expenses attributable to the Partnership’s operations. In such case, a noncorporate Partner would
be denied a deduction for all or part of that portion of its distributive share of the Partnership’s
ordinary losses attributable to interest and short sale expenses unless it had sufficient investment
income from all sources including the Partnership. The Partnership will report separately to each
Partner their distributive share of the investment interest expense of the Partnership, if any, and
each Partner must determine separately the extent to which such expense is deductible on the
Partner’s own tax return. Interest that is not deductible in the year incurred because of the
investment interest limitation may be carried forward and deducted in a future year in which the
taxpayer derives sufficient net investment income.
Notwithstanding the foregoing, to the extent the amount of any interest expense of the
Partnership is treated as properly allocable to the conduct of a trade or business, the ability of the
Partnership and, correspondingly, the Limited Partners, to deduct any such business interest
would generally be limited to 30% of its “adjusted taxable income,” which generally is the
Partnership’s taxable income for the current year determined without taking into account any
non-business income, business interest income or net operating loss and, until 2023, any
depreciation and amortization deductions. To the extent such limitation applies, the portion of
any business interest expense that is not allowed as a deduction in the current taxable year is
generally carried forward and treated as business interest expense in the succeeding taxable year,
in which case certain limitations at the level of the Limited Partner may apply. The limitation on
deductibility of business interest does not apply, however, to the extent the Partnership’s interest
expense does not exceed any business interest income of the Partnership. There is some
uncertainty as to how the business interest limitations should be applied in a partnership context.
Potential investors are advised to consult with their own tax advisers with respect to the
application of the investment interest and business interest limitations in their particular
circumstances.
Passive Activity Income and Loss. The Code generally disallows the deduction by an
individual, estate, trust, or personal service corporation or, with modifications, certain closely
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held corporations of passive activity losses against non-passive activity income. Passive activity
losses can offset passive activity income (which does not include portfolio income such as
dividends, interest, annuities and royalties), and can be used upon the disposition of the
investor’s entire interest in the passive activity.
If the Partnership were to acquire interests in entities that are treated as partnerships for
U.S. Federal tax purposes, it is possible that the resulting income or loss realized by the
Partnership would be treated as passive income or loss to the Partners and the Partnership would
be deemed to be engaged in a trade or business for purposes of the investment interest limitation.
In this event, the Code’s limitations on the deduction of passive activity losses would apply and
the investment interest limitation would not apply.
At the present time, the Partnership does not expect to receive passive income or loss as a
result of its investments. Specifically, provided that the Partnership invests in stock or debt of
entities that are corporations (not partnerships) under current temporary and proposed passive
loss regulations, the income or loss to the Partnership would be considered to arise from non-
passive activities. As a result, income from the Partnership would not be passive activity
income. A Partner’s share of any losses generated by the Partnership (such as from investment
interest, investment expenses and capital loss) would generally be deductible against other
income of the Partner (although the deductibility of those amounts may be otherwise limited by
the Code as, for example, under the at-risk limitation discussed below or if such loss were a
capital loss, which is limited to the amount of capital gains plus $3,000).
Tax Basis of a Partner. A Partner’s tax basis in Interests will be equal to the amount of
his capital contribution to the Partnership. Such basis will be increased by his allocable share of
items of Partnership taxable income and gain, and will be reduced, but not below zero, by his
allocable share of items of Partnership tax deduction and loss and cash distributions to him by
the Partnership. The basis of a Partner in his Interest would also be increased by his share of any
Partnership non-recourse liabilities (but only to the extent that no Partner bears any risk of loss)
and decreased to the extent the Partner’s share of such liabilities decreases; provided, however,
that a Partner’s ability to deduct Partnership losses is subject to certain limitations under the
Code.
The tax basis of a Partner’s Interests is important because it is used in measuring gain or
loss upon cash distributions in excess of basis and partial or complete dispositions of Interests.
The tax basis is also important because a Partner may not deduct his share of Partnership losses
(if any) to the extent that they exceed his tax basis. Excess losses may be deducted in future
years to the extent the Partner’s basis is increased.
In the event of a non-liquidating distribution by the Partnership, subject to any Equalizing

Allocations described below, gain will be recognized by a Partner only to the extent that the
amount of any money and the fair market value as of the date of distribution of marketable
securities (within the meaning of Section 731(c) of the Code) distributed to him exceeds the
adjusted tax basis of his Interests immediately before the distribution. Further, no gain or loss
will be recognized by a Partner upon a non-liquidating distribution of assets in kind other than
marketable securities (within the meaning of Section 731(c) of the Code). In general, each
Partner will have a tax basis in assets (other than marketable securities) distributed to him in kind
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in a non-liquidating transaction, which is equal to the adjusted basis of such assets to the
Partnership immediately before such distribution. However, each Partner’s tax basis in such
assets will generally not exceed the adjusted basis of such Partner’s interest in the Partnership as
reduced by any money distributed in the same transaction. The fair market value of any
marketable securities, within the meaning of Section 731(c)(2) of the Code, will not be treated as
money for the purposes of reduction of basis described in the previous sentence because the
partnership will be classified as an investment partnership within the meaning of Section
731(c)(3)(C) of the Code. The partnership will be classified as an investment partnership within
the meaning of Section 731(c)(3)(C) of the Code because the partnership will never be
considered to be engaged in a trade or business (outside of the business of trading or dealing in
securities) and substantially all of its assets will be money, stock in a corporation, notes, bonds,
or other forms of debt, and certain other specified assets.
At-risk Limitations. The “at-risk” rules of Section 465 of the Code apply to individuals,
trusts and estates, and to certain closely held C corporations. The “at-risk” rules prohibit the
deduction of net losses from investments in any taxable year to the extent that such losses exceed
the amount the taxpayer is “at-risk” with respect to the activity at the end of that taxable year.
Prospective investors contemplating an investment in the Partnership should consult their tax
advisors with respect to the effect of the “at-risk” provisions on an investment by them in the
Partnership.
The amount a Partner has “at-risk” for an activity generally includes (1) the amount of
money and the adjusted basis of property contributed by the Partner to the activity and (2) the
amount borrowed for use in the activity for which the Partner is personally liable (subject to
certain related party and other rules that may limit the at-risk amount). Taxpayers are not
considered at-risk as to amounts protected against loss by guarantees or similar arrangements or
as to debt for which they are not personally liable, including a Partner’s allocable share of debt
secured by partnership property for which no one is personally liable (nonrecourse debt). Any
losses not deductible due to the application of the “at-risk” rules would be deferred until the
Partner’s amount at-risk is increased.
A Partner’s initial at-risk amount is decreased by losses allocated and distributions made
to a Limited Partner and increased by taxable income allocated to the Partner. A decrease in the
Partnership’s liabilities for which a Partner is personally liable will also decrease the Partner’s
amount at-risk. Any loss disallowed under the at-risk limitation may be carried over to a later
year in which a Partner is at-risk. Any gain allocated to a Partner should also increase the
Partner’s amount at-risk, and, consequently, any losses carried forward to the point of disposition
could be utilized against such gain. If a Partner’s “at-risk” amount in the Partnership is
decreased below zero in any year (e.g., due to the Partner’s receipt of a cash distribution or a
decrease in his or her share of liabilities included in his or her “at-risk” basis), the Partner must
include in income the negative amount (but only to the extent of previously allowed losses).
Contribution of Securities. The General Partner reserves the right, in its sole discretion,
to permit prospective investors to contribute securities in-kind as a capital contribution. To the
extent that the General Partner permits an investor to make an in-kind securities contribution, the
following discussion of tax consequences shall apply.
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Generally, a transfer of appreciated or depreciated property to the Partnership does not

cause the transferor to recognize taxable gain or loss unless it is a disguised sale. This general
rule does not apply, however, and consequently gain will be recognized, if the transfer is to an
“investment company” and results in “diversification” of the transferor’s interests. The General
Partner expects that the Partnership will qualify as an investment company for Federal tax
purposes at all times. Accordingly, whether a transfer of securities in kind by a Limited Partner
to the Partnership causes that Limited Partner to recognize taxable gain depends on whether the
transfer results in diversification of the transferor’s interests. Treasury Regulations provide that
a transfer will not result in diversification if each transferor contributes a diversified portfolio of
securities. A diversified portfolio of securities for this purpose generally means that not more
than 25% of the value is invested in the stock or securities of one issuer and not more than 50%
is invested in the stock or securities of five or fewer issuers.
If a transfer of appreciated or depreciated securities to the Partnership does not cause the
transferor to recognize taxable gain at the time of transfer as discussed in the preceding
paragraph, the Partnership will be required pursuant to Code section 704(c) on the eventual
disposition of those contributed securities to allocate taxable gain or loss first to the contributing
Limited Partner to take into account the variation between the basis to the Partnership of such
securities and their fair market value at the time of contribution. In addition, if the Partnership
distributes such a contributed security to a Limited Partner other than the contributing Limited
Partner at any time within seven years of such contribution, the contributing Limited Partner will
generally be required to recognize gain or loss at that time based on the unrealized gains or
losses in the security at the time of its contribution to the Partnership. If the Partnership makes a
distribution of property to that contributing Limited Partner at any time within seven years of
such contribution of securities, the contributing Limited Partner may be required to recognize
gain at that time to reflect the unrealized appreciation in the contributed securities at the time of
transfer.
In addition to the above rules, if any property contributed to a partnership by a partner

has a “built-in loss,” (i) such built-in loss shall be taken into account only in determining the
amount of items allocated to the contributing partner, and (ii) except as provided in the Treasury
Regulations, in determining the amount of items allocated to other partners the basis of the
contributed property in the hands of the partnership shall be treated as being equal to its fair
market value at the time of contribution.” A “built-in loss” is generally defined as the excess of
the adjusted basis of the property over its fair market value at the time of contribution.
Liquidation of the Partnership. Upon a liquidation, subject to Equalizing Allocations

described below, gain will be recognized by a Partner only to the extent that any money and the
fair market value on the date of distribution of marketable securities (within the meaning of
Section 731(c) of the Code) distributed exceeds the adjusted tax basis of his Interests
immediately before the distribution or there is a disproportionate distribution in kind to the
Limited Partner of unrealized receivables (such as “market” discount on certain debt securities
and short-term obligations). In general, loss will be recognized by a Partner upon a liquidating
distribution only if he receives no property other than money and then only to the extent that the
adjusted tax basis of his Interests exceeds the sum of any money distributed.
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Any distribution of Partnership assets in kind (other than marketable securities treated as
cash under Section 731 of the Code) as part of the liquidation of the Partnership will not result in
gain or loss to a Partner, and each Partner will have a tax basis in such assets in an amount equal
to the adjusted tax basis of his Interests reduced by any money and marketable securities treated
as cash under Section 731 of the Code distributed in the same transaction.
Sale or Other Disposition of Partnership Property. Upon the sale of the Partnership’s
property, taxable gain will be recognized to the extent that the amount received from such sale
exceeds the adjusted tax basis of the property. Except to the extent that such taxable gain
represents gain from so-called “hot assets” such as unrealized receivables as defined in Section
751 of the Code or substantially appreciated inventory, the gain should qualify as capital gain to
the Partnership (assuming that the Partnership is not a “dealer” with respect to the property).
Each Partner must report his or her distributive share of such gain on his or her tax return.
Transfer of Interests. Subject to any Equalizing Allocations described below, the sale
by a Partner of Interests will generally result in his recognizing capital gain or loss, except to the
extent that the proceeds of such sale represent the Partner’s share of so-called “hot assets” (i.e.,
unrealized receivables and substantially appreciated inventory). The term “unrealized
receivables” includes, among other things, market discount bonds and short-term obligations to
the extent of the amount that would be treated as ordinary income if the property were sold by
the Partnership. The amount of gain recognized on the sale by a Partner of his Interests generally
will be the excess of the sales price received over his adjusted tax basis in such Interests.
Generally, a transfer of an Interest in the Partnership by gift or upon death will not result in
taxable income or loss.
Equalizing Allocations. The Limited Partnership Agreement permits the General

Partner, in its sole discretion, to specially allocate taxable income or loss to a withdrawing
Limited Partner in order to equalize, to the extent possible, the value of the withdrawing Limited
Partner’s Capital Account with the income tax basis of his interest in the Partnership (without
regard to liabilities) (“Equalizing Allocations”). Absent such a special allocation (or a Code
Section 754 election), unrealized gains (or losses) that have economically accrued to the benefit
(or detriment) of the withdrawing Limited Partner might be taxed to the remaining Limited
Partners in the Partnership. If the General Partner elects to implement these special allocations,
they would generally result in withdrawing Limited Partners being allocated taxable income and
loss to the extent of their share of unrealized as well as realized gain or loss. The Limited
Partnership Agreement provides that net realized capital gains may be allocated to a completely
withdrawing Limited Partner to the extent his liquidating distribution exceeds his tax basis
account. These allocations may result in the withdrawing Partner recognizing taxable income,
which may include ordinary income and short-term capital gain, in his last taxable year in the
Partnership, thereby reducing the amount of long-term capital gain recognized upon his receipt
of the proceeds upon withdrawal. In addition, a Partner making a partial withdrawal of his
Capital Account will have a special allocation of gain which may accelerate his recognition of
income.
The IRS could assert that the allocation of income, gain, deduction, loss, or credit to the
withdrawing Limited Partner should not be respected, and that such items should be allocated
proportionately to all of the Limited Partners. This could result in a Limited Partner recognizing
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a greater or smaller amount of income, gain, deduction, loss, or credit than he would have
recognized under the allocation made by the Partnership, and in such Limited Partner
recognizing an amount of income, gain, deduction, loss, or credit at a different time than he
would have recognized such amount under the allocation made by the Partnership.
Capital Gain and Ordinary Income Transactions
In General. The Partnership expects to act as a trader or investor, and not as a dealer,
with respect to its securities transactions. A trader and an investor are persons who buy and sell
securities for their own accounts. A dealer, on the other hand, is a person who purchases
securities for resale to customers rather than for investment or speculation.
Generally, the gains and losses realized by a trader or an investor on the sale of securities
are capital gains and losses. Thus, except with respect to certain transactions (some of which are
described below), the Partnership expects that its gains and losses from its securities transactions
typically will be capital gains and capital losses. These capital gains and losses may be long-
term or short-term depending, in general, upon the length of time the Partnership maintains a
particular investment position and, in some cases, upon the nature of the transaction. Property
held for more than one year generally will be eligible for long-term capital gain or loss treatment.
Gain realized by a Partner, whether it is allocated gain from the Partnership, attributable
to a liquidating or non-liquidating distribution in excess of basis, or results from a sale of
Interests, will be taxed at different rates depending on the length of time the relevant assets have
been held. For individuals, estates and trusts, long-term capital gains for capital assets held more
than 12 months are currently taxed at a maximum rate of 20%. Distributions of certain gains
from REITs or partnerships may be subject to tax as Section 1250 recapture income at a
maximum rate of 25%. Short-term capital gains are taxed along with ordinary income at the
taxpayer’s marginal rate. In addition, qualifying dividend income will be taxed at a maximum
rate of 20%, subject to certain holding period requirements. Qualifying dividends are defined,
under Section 1(h)(11) of the Code, as dividends from domestic or certain foreign corporations,
which subject to certain requirements related to risk of loss and offsetting positions (e.g., short
sales), the stock of which corporations the taxpayer has held for more than 60 days of the 90-day
period from the date on which the stock became ex-dividend with respect to such dividend (or
121 days of the 181-day period in the case of stock having a preference with regard to
dividends).
A 3.8% Medicare tax is imposed on net investment income earned by certain individuals,
estates and trusts. “Net investment income,” for these purposes, means investment income
(including (i) net gains from the taxable disposition of an Interest to the extent the net gain would
be taken into account by the Partner if the Partnership sold all of its property for fair market
value immediately before the disposition of the Interest, and (ii) dividends and capital gains
earned by the Partnership) reduced by the deductions properly allocable to such income. In the
case of an individual Partner, the tax will be imposed on the lesser of (1) the Partner’s net
investment income or (2) the amount by which the Partner’s modified adjusted gross income
exceeds $250,000 (if the Partner is married and filing jointly or a surviving spouse), $125,000 (if
the Partner is married and filing separately) or $200,000 (in any other case).
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The Partnership may realize ordinary income or loss with respect to an investment in an
underlying Partnership that is engaged in a trade or business.
In addition, the Partnership may invest in a variety of investments, and special rules may
apply to certain of the proposed types of investments. The application of certain rules relating to
short sales, to so-called “straddle” and “wash sale” transactions and to “Section 1256 contracts”
may serve to alter the manner in which the holding periods for a security is determined or may
otherwise affect the characterization as long-term or short-term, and also the timing of the
realization, of certain gains or losses. Moreover, the straddle rules and short sale rules may
require the capitalization of certain related expenses. Income or loss from transactions involving
derivative instruments, such as swap transactions, may constitute ordinary income or loss. In
addition, as noted above, there are other rules that may limit and/or affect the amount, character
or timing of certain items of Partnership income, gain, loss, deduction or credit, and the
allocations of such items to the Partners.
Some of these rules are briefly described below. However, for a complete description of
the special rules which may apply to each type of investment of the Partnership, investors are
advised to consult their own tax advisors.
Investments in Regulated Investment Companies. The Partnership may invest in U.S.

ETFs which qualify as regulated investment companies (“RICs”) under Subchapter M of the
Code. In order to qualify as a regulated investment company and avoid a tax liability, a RIC
must, among other things, timely distribute its investment company taxable income and any net
realized capital gains. Investment company taxable income includes net investment income and
net realized short-term gains (if any). In general, a RIC is not subject to Federal income tax on
its distributed income and capital gain, although the RIC may be subject to a 4% nondeductible
excise tax if it does not meet certain distribution requirements by the end of each calendar year.
If the Partnership is a shareholder of a RIC on the record date for a distribution, the Partners will
take into account their share of the income distributed by the RIC, whether such distribution is in
cash or in-kind. Dividends received by a RIC from domestic corporations may constitute a
portion of the RIC’s gross investment income. Dividends paid by a RIC from investment
company taxable income generally will be taxed to the Partners as ordinary income. However, a
dividend paid by a RIC designated as a Qualified Dividend, which may not exceed the Qualified
Dividend received by the RIC, are taxed at the beneficial rates applicable to Qualified Dividends,
providing that certain holding period requirements are met by the Partnership with respect to its
investment in the RIC. Generally, distributions of the excess of a RIC’s net long-term capital
gain over net short-term capital loss will be taxable to the Partners as long-term capital gain,
regardless of the length of time the shares of a RIC have been held by the Partnership.
Distributions of a RIC’s short-term capital gains are taxable to the Partners as ordinary income.
Distributions by RICs of certain gains from REITs or partnerships may be subject to tax as
Section 1250 recapture income at a maximum rate of 25%. Distributions by a RIC result in a
reduction in the net asset value of the RIC’s shares. Should a distribution reduce the net asset
value below a Partnership’s cost basis, such distribution nevertheless would be taxable as
ordinary income or capital gain as described above to the Partners, even though, from an
investment standpoint, it may constitute a return of capital.
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Investments in REITs. As indicated above, the Partnership may invest in REIT

securities. Under the Code, a REIT itself is generally not subject to tax to the extent that it
distributes its income. REITs generally make distributions that may be expected to give rise to
income for the Partners in the form of regular dividends (generally taxable in the same manner as
other corporate dividends except that no dividends received deduction would be available and
that dividends paid by REITs are not likely to be “Qualified Dividends”), capital gain dividends
(generally taxable in the same manner as long-term capital gains, except to the extent attributable
to the recapture of depreciation deductions) and income based on the Partners’ proportionate
share of undistributed net long-term capital gains (as designated by a REIT electing to retain
such long-term capital gains).
OID & Market Discount. The Partnership may realize income taxable at ordinary
income tax rates from dividends (other than qualified dividend income) and accruals of interest
on securities. The Partnership may hold debt obligations with original issue discount (“OID”).
In such case, the Partnership would be required to include amounts in taxable income on a
current basis even though receipt of such amounts may occur in a subsequent year. The
Partnership may also acquire debt obligations with “market discount.” Upon disposition of such
an obligation, the Partnership generally would be required to treat gain realized as ordinary
income to the extent of the market discount that accrued during the period the debt obligation
was held by the Partnership.
Convertible Debt. Convertible debt is ordinarily treated as a “single property”

consisting of a pure debt interest until conversion, after which the investment becomes an equity
interest. If the security is issued at a premium (i.e., for cash in excess of the face amount payable
on retirement), the creditor-holder may amortize the premium over the life of the bond under
Code Section 171 using a compound-interest method similar to OID. For this purpose, the
instrument is partially bifurcated, and the amount, if any, attributable to the conversion feature is
deducted from the issue price in computing the premium. If the security is issued for cash at a
price below its face amount, the creditor-holder must accrue the OID in income over the life of
the debt under Code Section 1272. In computing OID (as contrasted with premium), however,
no allowance is made for the value of the conversion privilege. OID must be reported on an
economic-accrual or constant-interest basis.
If the repurchase price exceeds the bond’s “adjusted issue price,” the holder’s gain
ordinarily constitutes capital gain. If convertible debt securities are not held until maturity but
are instead converted into stock of the same corporation, the holder’s exercise of the conversion
privilege is ordinarily nontaxable. In this case, the holder’s basis and holding period for the old
instruments carry over into the new securities. The treatment of unamortized issue discount and
premium and of the expenses of issue upon a tax-free conversion of debt into stock is not entirely
clear, but apparently the following results occur: (1) unamortized issue premium is not
deductible by the holder upon conversion, but is instead treated as part of the amount paid for the
stock; and (2) unaccrued and unreported OID is presumably not taxed to the holder on
conversion.
Hedging Transactions. Certain hedging transactions that may be engaged in by the

Partnership may be subject to special tax treatment as “constructive sales” under Section 1259 of
the Code if the Partnership holds certain “appreciated financial positions” (defined generally as
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ACTIVE.124648424.02
any interest (including a futures contract) with respect to stock, certain debt instruments, or
partnership interests if there would be a gain were such interest sold, assigned, or otherwise
terminated at its fair market value). A constructive sale is generally defined as entering into a
short sale of, notional principal contract with respect to, or futures or forward contract to deliver,
the same or substantially identical property or transactions having substantially the same effect
as prescribed by the Treasury Regulations. Upon entering into a constructive sales transaction
with respect to an appreciated financial position, the Partnership will generally be deemed to
have constructively sold such appreciated financial position and will recognize gain as if such
position were sold, assigned, or otherwise terminated at its fair market value on the date of such
constructive sale (and will take into account any gain for the taxable year which includes such
date).
Warrants/Options. Stock purchase rights (variously designated as “warrants,”

“options,” or “rights”) are contractual agreements entitling the holder to acquire a designated
number of shares of stock at a stipulated price at any time during the term of the contract. These
rights can be created in a variety of situations. For example, a corporation may issue options to
purchase its stock to its own shareholders as distributions, or to creditors or other investors. If
warrants or options are issued as part of an “investment unit” (consisting of debt obligations and
stock-purchase option rights), Treasury Regulation Section 1.1273-2(h) requires allocation of the
issue price between the debt and option elements in the package in proportion to their relative
values, with the result that OID income can arise if the amount allocable to the debt component
is less than its face amount. Regulations have extended this bifurcation approach to various
contingent value rights as well.
On exercising warrants, a holder does not realize gain or loss. The holder’s basis will
equal the sum of the exercise price paid plus the holder’s issue price for the warrants. If the
holder sells the warrants rather than exercising them, he will generally realize capital gain or loss
under Code Section 1234 on the difference between the holder’s basis (issue price) and the
amount realized on the sale (assuming that the property to which the warrant relates is a capital
asset). If the warrants lapse without exercise, the holder generally realizes capital loss under
Code Section 1234.
A distribution by a corporation of rights to acquire stock is generally treated as stock.

The receipt by a shareholder of warrants or rights to acquire stock may be treated as a nontaxable
stock distribution or as a taxable dividend depending on the circumstances. Additionally, under
Code Section 305(b)(4), a distribution by a corporation of its stock or rights to acquire its stock
made with respect to preferred stock is generally treated as a taxable dividend. Regulations treat
warrants issued in a tax-free reorganization as a zero principal amount debt security, and thus not
taxable to exchanging shareholders and security holders.
Short Sales. Gain or loss from a short sale of property is generally considered as capital
gain or loss to the extent the property used to close the short sale constitutes a capital asset.
Except with respect to certain situations where the property used to close a short sale has a long-
term holding period on the date of the short sale, special rules would generally treat the gains on
short sales as short-term capital gains. These rules may also terminate the running of the holding
period of “substantially identical property” held on behalf of the Partnership. Moreover, a loss
on a short sale will be treated as a long-term capital loss if, on the date of the short sale,
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“substantially identical property” has been held for more than one year. Gain or loss on a short
sale will generally not be realized until such time that the short sale is closed. However, if the
Partnership holds a short sale position with respect to stock, certain debt obligations or
partnership interests that has appreciated in value and then acquires property that is the same as
or substantially identical to the property sold short, the Partnership generally will recognize gain
on the date it acquires such property as if the short sale were closed on such date with such
property. Similarly, if the Partnership holds an appreciated financial position with respect to
stock, certain debt obligations, or partnership interests and then enters into a short sale with
respect to the same or substantially identical property, the Partnership generally will recognize
gain as if the appreciated financial position were sold at its fair market value on the date it enters
into the short sale. The subsequent holding period for any appreciated financial position that is
subject to these constructive sale rules will be determined as if such position were acquired on
the date of the constructive sale.
Currency Fluctuations; Section 988 Gains or Losses. To the extent that its
investments (directly or indirectly) may be made in securities denominated in a foreign currency,
gain or loss realized by the Partnership frequently will be affected by the fluctuation in the value
of such foreign currencies relative to the value of the dollar. Generally, gains or losses with
respect to investments in common stock of foreign issuers will be taxed as capital gains or losses
at the time of the disposition of such stock. However, gains or losses on disposition of debt
securities denominated in a foreign currency that are attributable to the fluctuations of such
currency between the date of acquisition of the debt security and the date of disposition will be
treated as ordinary income or ordinary loss. Similarly, gains and losses on the acquisition and
disposition of foreign currency (e.g., the purchase of foreign currency and subsequent use of the
currency to acquire stock) will be treated as ordinary income or loss. Also, gains or losses
attributable to fluctuations in exchange rates that occur between the time the Partnership accrues
interest or other receivables or accrues expenses or other liabilities denominated in a foreign
currency and the time the Partnership actually collects such receivables or pays such liabilities
may be treated as ordinary income or ordinary loss.
The Partnership may acquire foreign currency forward contracts, enter into foreign
currency futures contracts and acquire put and call options on foreign currencies. Generally,
foreign currency regulated futures contracts and nonequity option contracts that qualify as
“Section 1256 contracts” will not be subject to ordinary income or loss treatment under Section
988 (unless the Section 1256 contract is also a Section 988 transaction). However, if the
Partnership acquires futures currency contracts or option contracts that are not Section 1256
contracts, or any forward currency contracts, any gain or loss realized by the Partnership with
respect to such instruments will be ordinary, unless (i) the contract is a capital asset in the hands
of the Partnership and is not a part of a straddle transaction and (ii) the Partnership makes an
election (by the close of the day the transaction is entered into) to treat the gain or loss
attributable to such contract as capital gain or loss.
Section 1256 Contracts. In the case of “Section 1256 contracts,” the Code generally
applies a “mark to market” system of taxing unrealized gains and losses on such contracts and
otherwise provides for special rules of taxation. A Section 1256 contract includes certain
regulated futures contracts, certain foreign currency forward contracts, and certain nonequity
options contracts. Under these rules, Section 1256 contracts held by the Partnership at the end of
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each taxable year are treated for Federal income tax purposes as if they were sold by for their fair
market value on the last business day of such taxable year. The net gain or loss, if any, resulting
from such deemed sales (known as “marking to market”), together with any gain or loss resulting
from actual sales of Section 1256 contracts, must be taken into account by the Partnership in
computing its taxable income for such year. If a Section 1256 contract held by the Partnership at
the end of a taxable year is sold in the following year, the amount of any gain or loss realized on
such sale will be adjusted to reflect the gain or loss previously taken into account under the
“mark to market” rules. A Section 1256 contract does not include any “securities futures
contract,” any option on such a contract, other than a dealer securities futures contract or any
interest rate swap, currency swap, basis swap, interest rate cap, interest rate floor, commodity
swap, equity swap, equity index swap, credit default swap, or similar agreement.
Capital gains and losses from such Section 1256 contracts generally are characterized as
short-term capital gains or losses to the extent of 40% thereof and as long-term capital gains or
losses to the extent of 60% thereof. Such gains and losses will be taxed under the general rules
described above. As indicated above, gains and losses from certain foreign currency transactions
will be treated as ordinary income and losses.
Mixed Straddle Election. The Code allows a taxpayer to elect to offset gains and losses
from positions which are part of a “mixed straddle.” A “mixed straddle” is any straddle in which
one or more but not all positions are Section 1256 contracts.
Effect of Straddle Rules on Partner’s Securities Positions. The IRS may treat certain
positions in securities held (directly or indirectly) by a Partner and its indirect interest in similar
securities held by the Partnership as “straddles” for Federal income tax purposes. The
application of the “straddle” rules in such a case could affect a Partner’s holding period for the
securities involved and may defer the recognition of losses with respect to such securities.
Section 1258 Conversion Transactions. Under Section 1258 of the Code, a taxpayer
shall not be entitled to capital gain treatment for gain on the disposition or termination of any
positions held as a part of a “conversion transaction” which would otherwise qualify for capital
gains treatment. In general, a conversion transaction is one in which (i) substantially all of the
taxpayer’s expected return is attributable to the time value of the taxpayer’s net investment in the
transactions and (ii) which involves the taxpayer taking two or more offsetting positions with
respect to property (but only if such property was acquired and such offsetting positions were
entered into on a substantially contemporaneous basis) or entered into certain straddle positions.
If applicable, Section 1258 of the Code would re-characterize a portion of the taxpayer’s gain as
ordinary income to the extent of interest which would have accrued on the taxpayer’s net
investment in the conversion transaction for the period ending on the date of such disposition at a
rate equal to 120% of the relevant applicable Federal rate. Section 1258(c)(2)(D) of the Code
gives the Treasury Department broad authority to promulgate regulations to define the concept of
conversion transactions.
Effect of Investment in Complex Securities. Because application of any of the

foregoing rules governing OID, market discount, Section 1256 contracts and straddle
transactions may affect the character of gains or losses, defer losses and/or accelerate the
recognition of income or gains or losses from the affected investment or straddle positions, the
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taxable income of the Partnership may exceed or be less than its book income. Accordingly, the
amount (if any) that is distributed to Partners and which will be taxed to Partners as ordinary
income, qualified dividend income, or long-term capital gain may also differ from the book
income of the Partnership and may be increased or decreased as compared to a partnership that
did not engage in such transactions.
Derivative Transactions. Income or loss from transactions involving derivative

instruments, such as swap transactions, entered into by the Partnership also may constitute
ordinary income or loss.
Wash Sales. The Partnership may, in certain circumstances, be negatively affected by

certain special rules of the Code and Regulations relating to “wash sales.” For example, the
wash sale rules could prevent the current utilization for tax purposes of a loss realized on the sale
of a security if within thirty (30) days before or thirty (30) days after the sale, the Partnership
were to acquire substantially identical securities or enter into a contract or option to acquire such
securities.
Section 475 Election. To the extent that the Partnership is directly engaged in a trade or
business as a trader in “securities,” they may elect under Section 475 of the Code to “mark-to-
market” the securities held in connection with such trade or business. Under such election,
securities held by the electing partnership at the end of each taxable year will be treated as if they
were sold by the electing partnership for their fair market value on the last day of such taxable
year, and gains or losses recognized thereon will be treated as ordinary income or loss.
Moreover, even if the Partnership determines that its securities activities will constitute trading
rather than investing, there can be no assurance that the IRS will agree, in which case the
Partnership may not be able to mark-to-market its positions. Once made, this election can only
be revoked with the consent of the IRS.
U.S. Withholding Taxes
Certain interest and dividends received by the Partnership from sources within the United
States may be subject to withholding taxes imposed by the United States. The Limited Partners
will be informed by the Partnership as to their proportionate share of the U.S. taxes treated as
paid by the Partnership, if any, which they will be required to include in their income. The
Limited Partners should be entitled to claim an unrestricted credit for their share of such U.S.
taxes in computing their own Federal income tax liability.
Income From Certain Foreign Investments
As stated above, the Partnership expects to be classified as a partnership for federal tax
purposes. As such, the Partnership will not be classified as “passive foreign investment
companies” under Code Section 1297. However, the Partnership may invest, through the
Partnership, in one or more non-U.S. companies that are classified as corporations for U.S.
federal income tax purposes. If so, pursuant to various “anti-deferral” provisions of the Code
(the “passive foreign investment company,” and “controlled foreign corporation” provisions),
direct or indirect investments by the Partnership in certain foreign corporations may cause an
investor to (i) recognize taxable income before the Partnership’s receipt of distribution proceeds,
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(ii) pay an interest charge on receipts that are deemed to have been deferred or (iii) recognize
ordinary income that, but for the “anti-deferral” provisions, would have been treated as long-
term capital gain.
The Partnership may invest in entities that are classified as “passive foreign investment
companies” (“PFIC”). Under the PFIC provisions, U.S. investors may be required to treat all or
a portion of the gain recognized from the direct or indirect sale of stock of a PFIC as ordinary
income or subject such gain to a deferred tax (equal to the highest rate of tax applicable to
ordinary income) plus an interest charge. Alternatively, a U.S. investor may be able to make an
election to treat some of these entities as “qualified electing funds” (“QEFs”), in which case a
U.S. investor would be required to include in such person’s gross income a pro rata share of the
PFIC’s ordinary income and net capital gains (but not losses) for a taxable year. If a QEF
election is in effect throughout a U.S. investor’s holding period in respect of a PFIC, such
investor is eligible for capital gains treatment on the sale or exchange of stock in the PFIC. The
Partnership will consider whether it will make QEF elections in respect of PFICs in which it
directly or indirectly invests, which would result in the current inclusion of a portion of a PFIC’s
earnings and profits in the income of investors. However, such entities may or may not permit
QEF elections to be made. In the absence of elections made by the Partnership, investors are
urged to consult their tax advisors concerning the U.S. federal tax consequences of making this
election.
It is also possible that the Partnership may invest in entities that will be treated as
“controlled foreign corporations” (“CFCs”) for U.S. federal tax purposes. If such investments
are made, certain U.S. investors would be required to currently include in income their pro rata
share of certain items of the CFC’s earnings and profits. The PFIC, CFC and other “anti-
deferral” provisions of the Code applicable in respect of direct or indirect ownership of foreign
corporations by U.S. investors are extremely complicated, and investors are strongly urged to
consult their tax advisors with respect to the application of these rules.
Alternative Minimum Tax
Due to the complexity of the alternative minimum tax (“AMT”) calculations, investors
should consult with their tax advisors as to whether the purchase of an Interest might create or
increase AMT liability.
Section 754 Election
The Code generally provides for optional adjustments to the basis of partnership property
upon distributions of partnership property to a partner and transfers of partnership interests
(including by reason of death) provided that a partnership election has been made pursuant to
Section 754. Under the Limited Partnership Agreement, the General Partner, in its sole
discretion, may cause the Partnership to make such an election. Any such election, once made,
cannot be revoked without the IRS’s consent.
Mandatory Basis Adjustments
The Partnership is generally required to adjust downward its tax basis in its assets in
respect of all Partners in cases of (i) a distribution of partnership property to a partner where the
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sum of (A) the amount of the loss recognized by the distribute partner and (B) the excess of the
basis of distributed partnership property in the hands of the distributee partner over the basis of
distributed property to the partnership immediately before distribution exceeds $250,000, and (ii)
a transfer of a partnership interest where (A) the adjusted basis of partnership property exceeds
by more than $250,000 its fair market value or (B) the transferee partner would be allocated a
loss of more than $250,000 if the partnership assets were sold for cash equal to their fair market
value immediately after such transfer. For this reason, the Partnership will require (i) a Partner
who receives a distribution from the Partnership in connection with a complete withdrawal, (ii) a
transferee of an Interest (including a transferee in case of death) and (iii) any other Partner in
appropriate circumstances to provide the Partnership with information regarding its adjusted tax
basis in its Interest.
Reporting of Sales or Exchanges of Interests
Pursuant to Section 6050K of the Code, in the case of a sale or exchange of a partnership
interest in a partnership having “unrealized receivables” or inventory as defined in Section 751
of the Code (i.e., such as “market” discount on certain debt securities and short-term
obligations), the partnership with respect to which the sale or exchange occurred is required to
file an information return (Form 8308) for the calendar year of the transfer setting forth the name
and address of the transferee and transferor and such other information as may be required by
Form 8308 or its instructions. In addition, that information is required to be furnished to the
person or persons whose name is set forth on the partnership’s information return on or before
the January 31 following the calendar year for which the partnership information return was
made. The transferor of a partnership interest is also required to promptly notify the partnership
of the exchange. The partnership is not required to make its return until it is so notified. In the
case of any transferor of a partnership interest that fails to provide notification to the partnership
on the date prescribed, that person must pay a penalty of $50 for each failure unless the failure is
due to reasonable cause and not to willful neglect. The Partnership may have “unrealized
receivables” in the form of market discount on certain debt securities and short-term obligations
taxable as ordinary income. Thus, this reporting requirement may apply to a sale or exchange of
Interests.
Audit of Partnership Tax Return
Under the audit regime adopted by the BBA, a partnership required to file, or that files, a U.S.
income tax return must appoint a representative with the sole authority to act on behalf of the
partnership in connection with audits, assessments, collections and related proceedings, and to
bind the partnership and its partners. The Partnership is expected to designate the General
Partner, the Investment Manager or any of their affiliates as the Partnership Representative, to
the extent permitted under applicable law. The BBA permits the IRS to adjust any item of the
Partnership’s income, gain, loss, deduction or credit (and any partner’s distributive share thereof)
for any taxable year under review (the “Review Year”), and to assess on and collect from the
Partnership any tax attributable thereto (including additions to tax, interest and penalties). Under
the default BBA regime, the Partnership is required to pay any imputed underpayment amount as
a result of any such adjustment. In such case, any person who is a Limited Partner in the year of
such adjustment may be required to bear a share of the economic burden of any such taxes
assessed or collected, without regard to whether such person was a Limited Partner, or without
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regard to its relative ownership interest, during the Review Year. Under certain circumstances,
the amount of the imputed underpayment determined under the default regime may be reduced in
whole or in part to the extent of the allocable share of any Limited Partners that file amended
returns and pay any associated taxes, qualify as tax-exempt partners under Section 168(h) of the
Code, or are subject to a lower rate of tax, in each case with respect to the Review Year. There
can be no assurances that the Partnership will be able to reduce, or will reduce, the amount of an
imputed underpayment pursuant to these procedures. Under an alternative BBA regime, the
Partnership Representative may elect out of the default regime for the Partnership and require
that its partners directly take into account the amount of any adjustment, in which case the
Partnership is required to send an adjusted Schedule K-1 to each person who was a Partner in the
Review Year and each such person (whether a current or former Partner) will generally be
required to pay any resulting tax (including interest and penalties, as well as a two-percentage
point increase on the interest rate that would otherwise have been imposed on any underpayment
of taxes). There can be no assurances that the Partnership will make, or will be able to make, a
valid election to apply this alternative regime under any particular circumstances. Similar rules
may apply to any entity treated as a partnership for U.S. federal income tax purposes in which
the Partnership directly or indirectly invests. The BBA regime is complex and, in certain
circumstances, the effect of its implementation on the Partnership and the Limited Partners may
be unclear. Prospective Limited Partners should consult their own tax advisors regarding the
application of the BBA regime to an investment in the Partnership in their particular
circumstances.
Tax Shelter Reporting
Treasury Regulations require information reporting, record maintenance and investor list
maintenance requirements with respect to certain transactions (the “Tax Shelter Regulations”).
The Tax Shelter Regulations may potentially apply to a broad range of investments that would
not typically be viewed as tax shelter transactions. Penalty provisions apply for failure to
comply with the Tax Shelter Regulations and the rules applicable to material advisers.
If the activities of the Partnership include one or more “reportable transactions,” the
Partnership and, in certain circumstances, the Partners would be required to file information
returns described below. In addition, the General Partner and other material advisers to the
Partnership may be required to maintain for a specified period of time a list containing certain
information regarding the “reportable transactions” and the Partnership’s investors, and the IRS
could inspect such lists upon request.
The Partnership is required to complete and file IRS Form 8886 (“Reportable Transaction
Disclosure Statement”) with its tax return for each taxable year in which the Partnership
participates in a “reportable transaction.” Additionally, each Partner treated as participating in a
reportable transaction of the Partnership is required to file Form 8886 with the Partner’s tax
return. The Partnership and any such Partner, respectively, must also submit a copy of the
completed form with the Office of Tax Shelter Analysis. The Partnership intends to notify the
Partners that it believes are required to report a transaction of a Partnership, and intends to
provide such Partners with any available information needed to complete and submit Form 8886
with respect to the Partnership’s transactions.
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A Partner’s recognition of a loss upon its disposition of an Interest in the Partnership may
constitute a “reportable transaction” for such Partner.
The scope of the Tax Shelter Regulations may be affected by further IRS guidance. Non-
compliance with the Tax Shelter Regulations may involve significant penalties and other
consequences.
Each person purchasing Interests should consult its own tax advisers as to the application
of these reporting obligations to their specific situations.
State and Local Tax Aspects
As a result of their ownership of Interests, Limited Partners may be subject to state and
local taxes imposed by their state of residence, as well as state and local taxes imposed by the
states in which the Partnership is located. Limited Partners may be required to file income tax
returns in those states and may be subject to a penalty if no return is filed. In certain states, a
partnership is required to withhold a tax computed based on a nonresident partner’s share of
partnership income (not distributable cash) having its source within that state and to make the
payment directly to the taxing authorities. Prospective limited partners are advised that the
method by which taxable income is calculated for state tax reporting purposes is likely to differ,
sometimes materially, from the method by which taxable income is calculated for Federal tax
purposes.
Unrelated Business Taxable Income
Almost all entities that are exempt from Federal income tax under the Code must
nevertheless pay tax on their unrelated business taxable income (“UBTI”) at the regular income
tax rates (to the extent that such UBTI exceeds the $1,000 specific deduction). In general,
interest income is excluded from the definition of UBTI. However, UBTI includes dividends,
interest, and gains from sales and other dispositions of property if such items are attributable to
“debt-financed property.”
The Partnership may have UBTI as a result of its activities, which would be taxable to
Partners that are otherwise tax-exempt, e.g., qualified pension plans and IRAs. The Partnership
is required to separately report an exempt Partner’s share of Partnership income (or items
thereof) which is UBTI. Tax-exempt entities should consult their own tax advisers regarding
UBTI and other tax aspects of an investment in the Partnership.
Pursuant to Code section 664(c), a charitable remainder that has UBTI for a taxable year
is subject to an excise tax equal to the amount of such UBTI. In effect, this amounts to a 100%
excise tax on UBTI. A charitable remainder trust is encouraged to consult with its own tax
advisors before determining to invest in the Partnership.
Tax-Exempt Entities Entering into Prohibited Tax-Sheltered Transactions
Certain tax-exempt entities and entity managers are subject to taxes and reporting
requirements in connection with the participation by the tax-exempt entity in a “prohibited tax-
sheltered transaction.” Entities described in Section 501(c), 501(d), 170(c) of the Code, and
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Indian Tribal Governments (within the meaning of Section 7701(a)(40) of the Code) are subject
to entity-level taxation if they become a party to a prohibited tax-shelter transaction. Those
entities, along with IRAs and certain pension and other benefit plans, are also subject to certain
reporting obligations if such entity is a party to a prohibited tax-sheltered transaction and is
subject to penalties for failure to comply with such reporting requirements. If an entity manager
of a tax-exempt entity approves such entity as a party to a prohibited tax-sheltered transaction at
any time during the year or had known or has reason to know that the transaction is a prohibited
tax-sheltered transaction, the entity manager is subject to a tax of $20,000 for each approval. For
these purposes, the term entity manager is defined generally as the person with responsibility or
authority or who approves or otherwise causes the entity to be a party to the prohibited tax-
sheltered transaction. Prohibited tax-sheltered transactions include listed transactions (i.e.,
transactions the IRS is identified by the Secretary of the Treasury as a tax avoidance transaction
for purposes of Section 6011 and identified by notice, regulation or otherwise as a listed
transaction) and prohibited reportable transactions (defined as confidential transactions or
transactions with contractual protection which is a reportable transaction). Each tax-exempt
entity purchasing Interests should consult its own tax advisors as to the application of these
reporting obligations to their specific situations.
Non-U.S. Investors
Should any prospective Limited Partner who is neither a citizen nor a resident of the
United States (a “non-U.S. investor”) acquire Interests, the tax consequences of his investment
under the laws of his country of citizenship or residency might differ substantially from those
described above. In addition, the Partnership could, under certain circumstances, be obligated to
withhold a portion of the cash distributions to which such non-U.S. investor would be entitled in
the future in order to satisfy U.S. tax laws. Moreover, non-U.S. investors may be required to file
income tax returns in the United States with respect to their allocable share of income, gains,
losses, deductions and credits of the Partnership. Based on the foregoing, no prospective
Limited Partner who is either a citizen or resident of a country other than the United States
should invest in Interests, either as a result of the original offering or as a result of a subsequent
transfer, unless such person has reviewed the tax consequences of the proposed investment with
one or more tax advisers qualified to render advice as to the tax consequences of such investment
under the laws of such jurisdiction as well as under United States tax laws (including any
applicable tax return filing and/or informational reporting requirements). Prospective foreign
investors should also be aware that both Federal income tax consequences and foreign tax
consequences could be altered by treaty.
Identity of Beneficial Ownership and Withholding on Certain Payments (FATCA)
In order to avoid a U.S. withholding tax of 30% on certain payments (including payments
of gross proceeds) made with respect to certain actual and deemed U.S. investments, the
Partnership will be required under the Foreign Account Tax Compliance Act (“FATCA”) to
agree to verify, report and disclose to the IRS information regarding U.S. persons with direct or
indirect interests in the Partnership. In addition, any investor in the Partnership that is a “foreign
financial institution” within the meaning of Section 1471(d)(4) of the Code will generally be
required to enter into a similar agreement with the IRS to avoid being subject to a 30%
withholding tax on distributions from the Partnership that are attributable to: U.S.-source fixed,
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determinable, annual or periodical income (e.g., interest and dividends). The Partnership may
take any action in relation to an investor’s Interests or redemption proceeds to ensure that such
withholding is economically borne by the relevant investor whose failure to provide the
necessary information gave rise to the withholding. Certain non-financial foreign entities that
are investors in the Partnership will also be required to disclose information regarding their
substantial U.S. owners, if any. Shareholders should consult their own tax advisers regarding the
possible implications of this legislation on their investments in the Partnership.
These requirements are different from, and in addition to, the U.S. tax certification rules,
which generally require Shareholders that are Non-U.S. Persons to certify as to their beneficial
ownership and non-U.S. status in order to be exempt from U.S. information reporting and backup
withholding.
Possible Legislative Tax Changes
Proposals are currently being made to change the Federal income tax laws. Such
proposals vary widely in their scope and in their likely effect on taxpayers. It is likely that
additional proposals will be forthcoming or that previous proposals will be revived in some form
in the future. It is impossible to predict with any degree of certainty what proposals may be
forthcoming, the likelihood of adoption of any such proposals, the likely effect of any such
proposals upon the income tax treatment presently associated with investment in the Partnership
or the effective date of any legislation which is passed. In view of this uncertainty, prospective
Limited Partners are strongly urged to consider ongoing developments in this area and to consult
their own tax advisors in assessing the risks of an investment in the Partnership.
THE FOREGOING DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR

CAREFUL TAX PLANNING. TAX MATTERS RELATING TO THE PARTNERSHIP
AND TO THE TRANSACTIONS DESCRIBED HEREIN ARE COMPLEX AND ARE
SUBJECT TO VARYING INTERPRETATIONS. MOREOVER, THE EFFECT OF
EXISTING INCOME TAX LAWS AND POSSIBLE CHANGES IN SUCH LAWS WILL
VARY WITH THE PARTICULAR CIRCUMSTANCES OF EACH INVESTOR. NO
LEGAL OPINION AS TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE
COMPANY HAS BEEN OBTAINED BY THE COMPANY. ACCORDINGLY, AS
PREVIOUSLY STATED, EACH PROSPECTIVE LIMITED PARTNER SHOULD
CONSULT WITH AND RELY ON HIS OWN ADVISORS (i.e., A TAX ADVISOR
OTHER THAN THE GENERAL PARTNER, ITS AFFILIATES OR PERSONS
PROVIDING PROFESSIONAL SERVICES OR ADVICE TO THE COMPANY) WITH
RESPECT TO THE POSSIBLE TAX CONSEQUENCES (INCLUDING STATE AND
LOCAL TAX CONSEQUENCES) OF AN INVESTMENT IN THE PARTNERSHIP.
ERISA CONSIDERATIONS
THE FOLLOWING SUMMARY OF CERTAIN ASPECTS OF THE U.S. EMPLOYEE

RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), IS BASED
UPON ERISA, JUDICIAL DECISIONS, DEPARTMENT OF LABOR REGULATIONS AND
RULINGS IN EXISTENCE ON THE DATE HEREOF. THIS SUMMARY IS GENERAL IN
NATURE AND DOES NOT ADDRESS EVERY ERISA ISSUE THAT MAY BE
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APPLICABLE TO THE PARTNERSHIP OR A PARTICULAR INVESTOR.

ACCORDINGLY, EACH PROSPECTIVE INVESTOR SHOULD CONSULT WITH ITS OWN
COUNSEL IN ORDER TO UNDERSTAND THE ERISA ISSUES AFFECTING THE
PARTNERSHIP AND THE INVESTOR.
General
Persons who are fiduciaries with respect to a U.S. employee benefit plan or trust within
the meaning of ERISA and subject to the provisions of part 4 of Title I of ERISA (an “ERISA
Plan”), or an individual retirement account, Keogh plan or other non-ERISA vehicle subject
solely to the provisions of Section 4975 of the Code 4 (an “Individual Retirement Fund”), should
consider, among other things, the matters described below before determining whether to invest
in the Partnership.
Investment Considerations
The assets of the Partnership will be invested in accordance with the investment policies
and objectives described in this Memorandum. Accordingly, an authorized fiduciary of an
employee benefit plan proposing to invest in the Partnership should, in consultation with its
advisers, consider whether the investment would be consistent with the terms of the plan’s
governing documents and applicable law. ERISA imposes certain general and specific
responsibilities on persons who are fiduciaries with respect to an ERISA Plan, including
prudence, diversification, avoidance of prohibited transactions and compliance with other
standards. In determining whether a particular investment is appropriate for an ERISA Plan,
U.S. Department of Labor (“DOL”) regulations provide that a fiduciary of an ERISA Plan must
give appropriate consideration to, among other things, the role that the investment plays in the
ERISA Plan’s portfolio, taking into consideration whether the investment is designed reasonably
to further the ERISA Plan’s purposes, the risk and return factors of the potential investment, the
portfolio’s composition with regard to diversification, the liquidity and current return of the total
portfolio relative to the anticipated cash flow needs of the ERISA Plan and the projected return
of the total portfolio relative to the ERISA Plan’s funding objectives. The fiduciary of an ERISA
Plan should also consider (i) the limitations on the rights of Partners to redeem all or any part of
their Interests or to transfer their Interests, (ii) the fact that the Limited Partners may consist of a
diverse group of investors (possibly including taxable and tax-exempt entities) and that the
Investment Manager necessarily will not take investment objectives of any particular Limited
Partner that are not consistent with those of the Partnership into account in managing Partnership
investments and (iii) the implications arising from whether or not the assets of the Partnership
are treated as “plan assets” for purposes of ERISA and Section 4975 of the Code as discussed
below.
Before investing the assets of an ERISA Plan in the Partnership, a fiduciary should
determine whether such an investment is consistent with its fiduciary responsibilities and the
foregoing regulations. For example, a fiduciary should consider whether an investment in the
Partnership may be too illiquid or too speculative for a particular ERISA Plan and whether the
assets of the ERISA Plan would be sufficiently diversified. If a fiduciary with respect to any
4
References hereinafter made to ERISA include parallel references to the Code.
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ACTIVE.124648424.02
such ERISA Plan breaches its responsibilities with regard to selecting an investment or an
investment course of action for such ERISA Plan, the fiduciary may be held personally liable for
losses incurred by the ERISA Plan as a result of such breach.
NEITHER THE GENERAL PARTNER, THE INVESTMENT MANAGER, NOR THE

PARTNERSHIP IS RESPONSIBLE FOR DETERMINING, AND NEITHER OF THEM
MAKES ANY REPRESENTATION REGARDING, WHETHER A PURCHASE OF
INTERESTS IS A PRUDENT OR SUITABLE INVESTMENT FOR ANY ERISA PLAN.
Plan Assets Defined
ERISA and applicable DOL regulations describe when the underlying assets of an entity
in which benefit plan investors (“Benefit Plan Investors”) invest are treated as “plan assets” for
purposes of ERISA and Section 4975 of the Code. Under ERISA, the term Benefit Plan
Investors is defined to include an ERISA Plan, an Individual Retirement Fund, and entities the
assets of which are treated as “plan assets” by reason of investment therein by Benefit Plan
Investors. (In addition, assets of the general account of an insurance company may, in certain
circumstances, be considered “plan assets”.)
Under ERISA and the Code, as a general rule, when an investing plan subject to ERISA
or Section 4975 of the Code invests assets in another entity, such plan’s assets include its
investment, but do not, solely by reason of such investment, include any of the underlying assets
of the entity. However, when an investing plan subject to ERISA or the Section 4975 of the
Code acquires an “equity interest” in an entity that is neither: (a) a “publicly offered security;”
nor (b) a security issued by an investment fund registered under the 1940 Act, then the 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 that:
(i) the entity is an “operating company;” or
(ii) the equity participation in the entity by Benefit Plan Investors is limited.
Under ERISA and the Code, the assets of an entity will not be treated as “plan assets” if
Benefit Plan Investors hold less than 25% of the value of each class of equity interests in the
entity. Equity interests held by a person (other than a Benefit Plan Investor) with discretionary
authority or control with respect to the assets of the entity or who provides investment advice for
a fee (direct or indirect) with respect to such assets or any affiliate of any such person are not
considered for purposes of determining whether the assets of an entity will be treated as “plan
assets” for purposes of ERISA and the Code. The Benefit Plan Investor percentage of ownership
test applies at the time of an acquisition by any person of the equity interests. In addition, an
advisory opinion of the DOL takes the position that a redemption of an equity interest by an
investor constitutes the acquisition of an equity interest by the remaining investors (through an
increase in their percentage ownership of the remaining equity interests), thus triggering an
application of the Benefit Plan Investor percentage of ownership test at the time of the
redemption.
Limitation on Investments by Benefit Plan Investors
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ACTIVE.124648424.02
The General Partner and the Investment Manager may monitor the investments in the
Partnership to ensure that the aggregate investment by Benefit Plan Investors does not equal or
exceed twenty-five percent (25%) of the value of any class of Interests in the Partnership so as to
avoid treatment of the Partnership’s assets as “plan assets” under ERISA and the Code. Because
the 25% test is ongoing, the General Partner not only may restrict initial or additional
investments by Benefit Plan Investors but also may require existing Benefit Plan Investors to
withdraw Interests if other investors withdraw their Interests. The Partnership will effect such
rejections or mandatory withdrawals in such manner as the General Partner, in its sole discretion,
determines to be reasonable and appropriate under the circumstances. Further, the General
Partner reserves the right to (1) redeem all or part of the Interests held by any Partner for any
reason, including, without limitation, to ensure compliance with the 25% limitation on
investment in the Partnership by Benefit Plan Investors or (2) to waive the Benefit Plan Investor
percentage of ownership limitation and thereafter to comply with all obligations then arising
under ERISA and the Code.
Certain ERISA Considerations if Partnership Assets are “Plan Assets”
If at any time Benefit Plan Investors hold 25% or more of the value of any class of
Interests, the Investment Manager and the General Partner and any other person exercising
discretionary authority over the Partnership assets would each be a “fiduciary” (as defined in
ERISA and the Code) with respect to each such Benefit Plan Investor, and would be subject to
the obligations and liabilities imposed on fiduciaries by ERISA. In such circumstances, the
Partnership would be subject to various other requirements of ERISA and the Code. In
particular, the Partnership would be subject to rules restricting transactions with “parties in
interest” and prohibiting transactions involving conflicts of interest on the part of fiduciaries
which might result in a violation of ERISA and the Code unless the Partnership obtained
appropriate exemptions from the DOL allowing the Partnership to conduct its operations as
described herein. If the General Partner and the Investment Manager, with the advice of counsel,
reasonably conclude that the assets of the Partnership are, or are likely to become, “plan assets”
for purposes of ERISA or Section 4975 of the Code, and that continued operation of the
Partnership under arrangements existing at the time would violate ERISA or would cause any
Limited Partner to be deemed to be a party to any transaction that violates the prohibited
transaction restrictions of ERISA or Section 4975 of the Code for any reason other than as a
result of an action taken exclusively by the Limited Partner, the General Partner and the
Investment Manager intend to take such steps as are necessary or appropriate to avoid such
result, including proposing amendments to the Partnership’s governing documents to ensure
compliance with ERISA and Section 4975 of the Code, as applicable.
If the Partnership’s assets are treated as “plan assets” for purposes of ERISA and Section
4975 of the Code, then Benefit Plan Investors should also consider the following:
“Investment Manager” Status. If and for so long as the Partnership’s assets are treated as
“plan assets” for purposes of ERISA and Section 4975 of the Code, the General Partner and the
Investment Manager will take such steps as they may determine are necessary to manage the
Partnership’s assets in accordance with the applicable requirements of ERISA. In this respect,
the Investment Manager acknowledges its “fiduciary” status (as defined by ERISA) with respect
to each such ERISA Plan in the Subscription Agreement. The Investment Manager is a registered
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ACTIVE.124648424.02
investment adviser under the Investment Advisers Act and, therefore, is eligible to be appointed
as an “investment manager,” as such term is defined in Section 3(38) of ERISA, by a “named
fiduciary,” as such term is defined by ERISA, of an investing ERISA Plan.
Employer Securities. If employer securities held by the Partnership are regarded as the
assets of investing ERISA Plans, those securities will be included in determining whether the
plans are in compliance with the limitations imposed under Section 407 of ERISA. Because the
rules and restrictions on investments in qualifying employer securities in Section 407 of ERISA
apply to securities issued by the employer and certain affiliates of the employer and to an ERISA
Plan’s entire portfolio, the Investment Manager is not in a position to monitor the plan’s
compliance with such rules and restrictions. Consequently, an authorized fiduciary of each
investing ERISA Plan will be required to acknowledge and agree that the fiduciary is responsible
for monitoring or ensuring compliance by the ERISA Plan with applicable requirements of
Section 407 of ERISA and that the Investment Manager shall have no such responsibility in its
management of the Partnership.
Reporting and Disclosure. During any time that the assets of the Partnership are treated
as “plan assets” of investing ERISA Plans, each investing ERISA Plan’s share of the fair market
value of the Partnership’s assets will need to be reflected on the ERISA Plan’s annual
returns/reports filed on Form 5500. Accordingly, the Partnership intends to provide such
information regarding its assets as may be reasonably necessary to enable the ERISA Plan to
complete its Form 5500.
Fiduciaries of investing ERISA Plans who are required to file Form 5500 or who rely on
Section 408(b)(2) of ERISA in connection with the retention of the Investment Manager to
provide services to the plans through the Partnership are referred to other parts of this
Memorandum for information relating to (i) the compensation received by the Investment
Manager with respect to the Partnership, including the Management Fee; (ii) the services
provided by the Investment Manager for such compensation; (iii) the Investment Manager’s
status as an ERISA fiduciary and an investment adviser registered under the Investment Advisers
Act of 1940; (iv) a description of the formula used to calculate the compensation; (v) the identity
of the parties paying and receiving the compensation; and (vi) the manner in which the
compensation will be received by the Investment Manager (i.e., by payment directly from the
assets of the Partnership). This information also is intended to satisfy the alternative reporting
option with respect to “eligible indirect compensation” of the Investment Manager that is
reportable on Schedule C of the Form 5500 filed on behalf of the ERISA Plan. The Investment
Manager intends to provide additional disclosures or information as may be required to satisfy
the Investment Manager’s obligations under Section 408(b)(2) of ERISA and the regulations
thereunder, or as requested by an ERISA Plan to enable it to satisfy its reporting and other
obligations relating to services provided and compensation received by the Investment Manager
with respect to the Partnership.
Proxy Voting. The DOL has indicated that the fiduciary act of managing plan assets that
are securities with voting rights includes the management of such voting rights. The Investment
Manager intends to follow its own policies in regard to voting proxies with respect to any
securities with voting rights held by the Partnership. Accordingly, an authorized fiduciary of
each investing ERISA Plan may be required, as a condition of the plan’s investment in the
64
ACTIVE.124648424.02
Partnership, to accept the Investment Manager’s proxy voting policies (which are available to
prospective investors upon request) for the plan. In so doing, the authorized fiduciary also may
be required to represent that adherence to the Investment Manager’s policies will not violate the
plan’s proxy voting policies.
Representations by Plans
An ERISA Plan proposing to invest in the Partnership will be required to represent that it
is, and any fiduciaries responsible for the ERISA Plan’s investments are, aware of and
understand the Partnership’s investment objectives, policies and strategies, and that the decision
to invest plan assets in the Partnership was made with appropriate consideration of relevant
investment factors with regard to the ERISA Plan and is consistent with the duties and
responsibilities imposed upon fiduciaries with regard to their investment decisions under ERISA.
WHETHER OR NOT THE ASSETS OF THE PARTNERSHIP ARE TREATED AS

“PLAN ASSETS” UNDER ERISA, AN INVESTMENT IN THE PARTNERSHIP BY AN
ERISA PLAN IS SUBJECT TO ERISA. ACCORDINGLY, FIDUCIARIES OF ERISA PLANS
SHOULD CONSULT WITH THEIR OWN COUNSEL AS TO THE CONSEQUENCES
UNDER ERISA, SECTION 4975 OF THE CODE OR OTHER APPLICABLE LAW OF AN
INVESTMENT IN THE PARTNERSHIP.
THE SALE OF INTERESTS TO AN ERISA PLAN IS IN NO RESPECT A

REPRESENTATION BY THE PARTNERSHIP, THE GENERAL PARTNER, OR THE
INVESTMENT MANAGER THAT AN INVESTMENT IN THE PARTNERSHIP MEETS
APPLICABLE LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY
ERISA PLANS GENERALLY OR ANY ERISA PLAN IN PARTICULAR.
ERISA Plans and Individual Retirement Funds Having Prior Relationships with the
Investment Manager or its Affiliates.
Certain prospective ERISA Plan and Individual Retirement Fund investors may currently
maintain relationships with the Investment Manager or other entities that are affiliated with the
Investment Manager. Each of such entities may be deemed to be a party in interest to and/or a
fiduciary of any ERISA Plan or Individual Retirement Fund to which any of the Investment
Manager or its affiliates provides investment management, investment advisory or other services.
ERISA prohibits ERISA Plan assets to be used for the benefit of a party in interest and also
prohibits an ERISA Plan fiduciary from using its position to cause the ERISA Plan to make an
investment from which it or certain third parties in which such fiduciary has an interest would
receive a fee or other consideration. Similar provisions are imposed by the Code with respect to
Individual Retirement Funds. ERISA Plan and Individual Retirement Fund investors should
consult with counsel to determine if participation in the Partnership is a transaction that is
prohibited by ERISA or the Code.
The provisions of ERISA are subject to extensive and continuing administrative and
judicial interpretation and review. The discussion of ERISA contained herein is, of necessity,
general and may be affected by future publication of regulations and rulings. Potential investors
65
ACTIVE.124648424.02
should consult with their legal advisors regarding the consequences under ERISA of the
acquisition and ownership of Interests.
Considerations for Non-Plan Investors
Prospective investors should note that this summary does not include a discussion of any
laws, regulations, or statutes that may apply to prospective investors that are not employee
benefit plans or that impose fiduciary responsibility requirements in connection with the
investment of assets of governmental plans and other plans not subject to ERISA or Section 4975
of the Code. Such investors should consult their own professional advisers about these matters.
LIMITATIONS ON TRANSFERABILITY; SUITABILITY REQUIREMENTS
Each purchaser of an Interest must bear the economic risk of its investment for an
indefinite period of time (subject to a limited right to withdraw capital from the Partnership)
because the Interests have not been registered under the Securities Act and, therefore, cannot be
sold unless they are subsequently registered under the Securities Act or an exemption from such
registration is available. It is not contemplated that any such registration will ever be effected, or
that certain exemptions provided by rules promulgated under the Securities Act will ever be
available. The Partnership Agreement provides that, with the consent of the General Partner,
which may be withheld in its sole discretion, a Partner may pledge, transfer or assign its Interest
only (i) in circumstances in which the tax basis of the Interest in the hands of the transferee is
determined, in whole or in part, by reference to its tax basis in the hands of the transferor, (ii) to
members of the Partner’s immediate family (i.e., brothers, sisters, spouse, parents and children),
or (iii) as a distribution from a qualified retirement plan or an individual retirement account.
Other pledges, transfers or assignments are permitted only with the consent of the General
Partner, which may be withheld in its sole discretion; provided, however, that prior to any such
pledge, transfer or assignment, the General Partner will consult with counsel to the Partnership to
ensure that such pledge, transfer or assignment will not cause the Partnership to be treated as a
“publicly traded partnership” taxable as a corporation. In no event, however, will any transferee
or assignee be admitted as a Partner without the consent of the General Partner which may be
withheld in its sole discretion.
Each purchaser of an Interest is required to represent that the Interest is being acquired
for its own account, for investment and not with a view to resale or distribution. Each Limited
Partner must be an “accredited investor” as defined in Regulation D promulgated under the
Securities Act and a “qualified client” as defined in Rule 205-3 under the 1940 Act. The
Interests are suitable investments only for sophisticated investors for whom an investment in the
Partnership does not constitute a complete investment program and who fully understand, are
willing to assume and who have the financial resources necessary to withstand, the risks
involved in the Partnership’s specialized investment program and to bear the potential loss of
their entire investment in the Interests.
Interests may not be purchased by persons who are not U.S. persons, such as nonresident
aliens, foreign corporations, foreign partnerships, foreign trusts or foreign estates, all as defined
in the Code, or by entities that are tax-exempt.
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ACTIVE.124648424.02
Each prospective Limited Partner is urged to consult with its own advisers to determine
the suitability of an investment in the Interests, and the relationship of such an investment to the
purchaser’s overall investment program and financial and tax position. Each purchaser of an
Interest is required to further represent that, after all necessary advice and analysis, its investment
in an Interest is suitable and appropriate in light of the foregoing considerations. Prior to any
subscription of Interests, each prospective purchaser must represent in writing, by completing
and signing the subscription documents, that it meets the suitability standards referred to in this
Confidential Memorandum. The General Partner has the right to reject a subscription for any
reason or for no reason.
ANTI-MONEY LAUNDERING REGULATIONS
As part of the Partnership’s responsibility to comply with regulations aimed at the

prevention of money laundering, the General Partner, the Investment Manager, the Administrator
and their respective affiliates may require a detailed verification of an investor’s identity, any
beneficial owner underlying the account and the source of the investor’s subscription payment.
The Partnership reserves the right to request such information as is necessary to verify the
identity of a subscriber and the underlying beneficial owner of a subscriber or a Limited Partner.
In the event of delay or failure by the subscriber or Limited Partner to produce any information
required for verification purposes, the Partnership may refuse to accept a subscription or may
cause the withdrawal of such Limited Partner from the Partnership. The General Partner may
suspend the payment of withdrawal proceeds of a Limited Partner if the General Partner
reasonably deems it necessary to do so to comply with anti-money laundering regulations
applicable to the Partnership, the General Partner, the Investment Manager, their subsidiaries and
affiliates or any of the Partnership’s other service providers.
Each subscriber and Limited Partner will be required to make such representations to the
Partnership as the Partnership, the General Partner, the Investment Manager and the
Administrator will require in connection with such anti-money laundering programs, including,
without limitation, representations to the Partnership that such subscriber or Limited Partner is
not a prohibited country, territory, individual or entity listed on the Department of Treasury
Office of Foreign Assets Control (“OFAC”) website and that it is not directly or indirectly
affiliated with any country, territory, individual or entity named on an OFAC list or prohibited
by any OFAC sanctions programs. Such subscriber or Limited Partner will also represent to the
Partnership that amounts contributed by it to the Partnership were not directly or indirectly
derived from activities that may contravene U.S. Federal, state or international laws and
regulations including, without limitation, anti-money laundering laws and regulations.
REPORTS TO PARTNERS
Limited Partners receive audited financial reports annually and unaudited performance
reports at least quarterly.
AUDITORS
The Partnership has retained BBD, LLP 1835 Market Street, 3rd Floor, Philadelphia, PA,
19103, as its auditor.
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ACTIVE.124648424.02
COUNSEL
Faegre Drinker, One Logan Square, Suite 2000, Philadelphia, PA 19103-6996, has
assisted the General Partner in the preparation of this Memorandum and has advised and may
continue to advise the General Partner and the Investment Manager regarding their duties and
responsibilities to the Partnership (and its Limited Partners). Faegre Drinker has not represented
the Partnership (or its Limited Partners) in organizing the Partnership or negotiating its business
terms or in connection with the offering of Interests. The statements made in this Memorandum
are those of the Partnership, the General Partner and the Investment Manager and not of Faegre
Drinker. The Partnership does not anticipate that it will engage separate counsel in connection
with the organization or general operation of the Partnership.
ADDITIONAL INFORMATION
Each prospective Limited Partner is invited to meet with representatives of the General
Partner and Investment Manager to discuss with, ask questions of, and receive answers
concerning the terms and conditions of this offering of Interests, and to obtain any additional
information, to the extent they possess such information or can acquire it without unreasonable
effort or expense, necessary to verify the information contained herein.
SUBSCRIPTION FOR INTERESTS
Persons interested in subscribing for Interests will be furnished with, and will be required
to complete, execute and return to the Administrator, subscription documents and certain other
documents.
The Partnership has authorized the Administrator to request such information and
documentation as it considers necessary to verify the identity of any Limited Partner or
prospective Limited Partner. Interests will not be issued until such time as the Administrator has
received and is satisfied with all the information and documentation requested to verify the
identity of the applicant. This may result in Interests being issued on a subscription date
subsequent to the subscription date on which an applicant initially wished to have Interests
issued to it.
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ACTIVE.124648424.02

Satori Fund Ii L.P.: Copy No. Furnished To

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Copy No. Furnished to:

SATORI FUND II L.P.

Satori Fund II L.P.

The Partnership’s investment objective is to achieve long-term capital appreciation. The

STP Investment Partners, LLC (the “Investment Manager”), a Pennsylvania limited

This Confidential Memorandum relates to offerings of limited partner interests in the

THE GENERAL PARTNER OF THIS PARTNERSHIP IS EXEMPT FROM

THE INVESTMENT MANAGER IS ALSO EXEMPT FROM REGISTRATION

INTERESTS ARE SUITABLE ONLY FOR SOPHISTICATED INVESTORS FOR

PROSPECTIVE LIMITED PARTNERS SHOULD CAREFULLY READ THIS

NO OFFER TO SELL (OR SOLICITATION OF AN OFFER TO BUY) IS BEING

THIS CONFIDENTIAL MEMORANDUM HAS BEEN PREPARED SOLELY FOR

THE PARTNERSHIP WILL NOT BE REGISTERED AS AN INVESTMENT

NO OFFERING LITERATURE OR ADVERTISING IN WHATEVER FORM WILL

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY UPON

THESE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY

BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF

FOR FLORIDA RESIDENTS:

SUMMARY OF TERMS .............................................................................................................. 1

THE PARTNERSHIP: Satori Fund II L.P. is a Delaware limited partnership formed in

INVESTMENT The Partnership’s investment objective is to achieve long-term

Investment decisions are based primarily on identifying catalysts

The Partnership’s portfolio includes, without limitation, positions

There can be no assurance that the investment objective of

LEVERAGE Leverage is utilized in the investment program of the Partnership,

GENERAL PARTNER: AlphaOne Satori Management, LLC (the “General Partner”), a

STP Investment Partners, LLC (“STP IP”) is the sole member of

INVESTMENT STP Investment Partners, LLC (the “Investment Manager”), a

MANAGER: Pennsylvania limited liability company formed in September

The portfolio manager for the Partnership is Mr. Daniel Niles.

INITIAL AND The minimum initial capital contribution by an investor (each, a

The Partnership may, without providing prior notice to, or

CAPITAL ACCOUNTS: The Partnership will determine a Limited Partner’s economic

Manager (discussed below), and (v) the Incentive Allocations

MANAGEMENT FEE; The Partnership pays a monthly management fee (the

In the sole discretion of the Investment Manager, the

In consideration for the Management Fee, the Investment

The Partnership bears its own expenses, including, without

For these purposes, “Extraordinary Expenses” means any expense

Generally, at the end of each fiscal year of the Partnership, 20%

to each Partner’s Capital Account for such fiscal year

If a Partner makes a complete or partial withdrawal prior to year-

The General Partner, in its sole discretion, may reduce, waive or

The Partnership maintains a separate memorandum loss recovery

debited from the Capital Accounts of Partners having an

From time to time, the Investment Manager may purchase

THE STP Investment Services, LLC. (the “Administrator”) has been

A partial withdrawal will not be permitted in an amount less than

Limited Partner would be less than $100,000, then such Limited

The General Partner may, in its sole discretion, waive or modify

Distribution of withdrawal proceeds will generally be made

Any Limited Partner may withdraw from the Partnership if Mr.

The Partnership may borrow to fund withdrawals and the cost of

The General Partner may establish reserves and holdbacks for

such reserves or holdbacks are not otherwise required by U.S.

The General Partner may, in its sole discretion, require a Limited

The General Partner may suspend withdrawal rights, in whole or

In addition, the General Partner may suspend the payment of

RISK FACTORS: The investment program of the Partnership is speculative and

BROKERAGE Portfolio transactions for the Partnership are allocated to brokers

The Partnership’s investment program emphasizes active

The portfolio strategies employed by the General Partner, the