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for U.S. federal income tax purposes. The following discussion is based on the assumption that the Fund will not be treated as a “publicly traded partnership.”

Treatment of U.S. Partners and Non-U.S. Partners - The discussion below addresses separately certain U.S. federal income tax matters relevant to U.S. Partners and Non-U.S. Partners. For purposes of this discussion, the term “U.S. person” generally means any U.S. citizen or resident individual, any corporation, limited liability company, or partnership organized under U.S. law, any estate (other than an estate the income of which, from sources outside the U.S. that is not effectively connected with a trade or business within the U.S., is not includible in its gross income for U.S. federal income tax purposes), and any trust if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. The term “U.S. Partner” means any partner that is a U.S. person and, unless the context otherwise requires, includes any U.S. person that holds an equity interest in the Fund through one or more partnerships or other entities treated as transparent for U.S. federal income tax purposes. The term “Non-U.S. Partner” means a Partner that is not a U.S. person.

Taxation of Fund Operations Generally - As a partnership, the Fund will not pay U.S. federal income taxes, but each U.S. Partner will be required to report that Partner’s distributive share (whether or not distributed) of the Fund’s income, gains, losses, deductions and credits of the character specified in Section 702 of the Code. It is possible that the U.S. Partners could incur U.S. federal income tax liabilities without receiving from the Fund sufficient distributions to defray such tax liabilities. The Fund’s taxable year will be the calendar year, or such other period as required by the Code. Tax information will be delivered to all Partners on an annual basis to enable the Partners to complete their tax returns.

Election to Adjust Basis of Fund Assets - Under the principal agreements relating to the Fund and Section 754 of the Code, the General Partner will have the authority to elect to adjust the basis of the Fund’s assets (commonly referred to as “Section 754 adjustments”) in connection with certain distributions made by the Fund to Partners or certain transfers of Limited Partner Interests in the Fund. Although the General Partner has no present intention of making an election on behalf of the Fund under Section 754 of the Code, Section 754 adjustments may nevertheless be mandatory under certain circumstances and could affect the amount of a Partner’s allocations (for U.S. federal income tax purposes) of gain or loss recognized by the Fund on a disposition of its assets.

The General Partner also will have the authority under the principal agreements relating to the Fund to elect to treat the Fund as an “electing investment partnership” and, as a result, potentially avoid making Section 754 adjustments that otherwise would be mandatory with respect to certain transfers of Limited Partner Interests in the Fund. Such election, however, may result in the disallowance (for U.S. federal income tax purposes) of certain losses allocated by the Fund to transferees of Limited Partner Interests in the Fund. It is possible, however, that the Fund will not be able to qualify as an electing investment partnership.

The General Partner will have the authority to require any Partner engaging in a transaction that requires a Section 754 adjustment (for example, a transfer of the Partner’s Limited Partner Interest) to bear the ongoing administrative and other costs incurred by the Fund or its Partners in connection with these basis adjustment rules. These costs, which could be significant, may be

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