SOF III - 1081 Southern Financial LLC The AIFM Directive became effective in July 2011 and was required to have been implemented by EU Member States by July 22, 2013. Before the AIFM Directive can be implemented in each individual EU Member State, detailed implementing measures must be drawn up and adopted by the legislative body of that EU Member State. Details of the full impact of the Directive on the operation of the Master Fund and the Feeder Funds will not be known until those implementing measures have been finalized. Lack of Transferability or Redemption of Interests. In light of the fact that there are restrictions on withdrawals, transfers and redemptions and the Interests are not registered under the U.S. federal or state securities laws or similar laws of any non-U.S. jurisdiction, an investment in a Feeder Fund will be an illiquid investment. There will not be any market for the Interests. Investments in the Feeder Funds should therefore be considered only by persons financially able to maintain their investment for an extended period of time, who can afford a loss of all or a substantial part of their investment and have the financial ability to satisfy capital calls. Even if the Onshore Feeder Fund's investment (and the Offshore Feeder Fund's indirect investment) in the Master Fund proves successful, it is unlikely to produce a realized return to Limited Partners for a period of years. Limited Voting Rights. Whenever the Onshore Feeder Fund has voting and consent rights with respect to its interest in the Master Fund, the Investment Manager will solicit instructions from the Limited Partners prior to exercising such rights on behalf of the Onshore Feeder Fund. Whenever the Offshore Feeder Fund has voting and consent rights with respect to its interest in the Onshore Feeder Fund, the Offshore Feeder Fund will solicit instructions from Limited Partners of the Offshore Feeder Fund prior to exercising such rights on behalf of the Of