EFTA01451794.pdf

SOF III - 1081 Southern Financial LLC Merits of Secondary Investing — The private equity secondaries market provides a way for investors to sell their existing private equity Investments despite the illiquid nature of the asset class — The secondary strategy has the potential for an attractive risk-reward profile: — Investments in mature assets that typically yield more predictable and earlier cash flows — Investments draw down and return capital more quickly than with primary funds — this mitigates the "if-curve" — Provides diversification across vintage years, fund managers, strategies, industries and geographies — Investments in re-priced existing assets to reflect current performance and economic environment Summary Terms The following Is a summary of selected principal terms and is qualified in its entirety by reference to the Confidential Private Offering Memorandum of the Onshore Feeder Fund, including the Confidential Private Placement Memorandum of the Fund attached thereto, and the legal documentation relating to the Onshore Feeder Fund and the Fund. Fund Onshore Feeder Fund Secondary Opportunities Fund III Private Client Fund Name Secondary Opportunities Fund III. LP Feeder Fund (U.S.). L P. Structure English Limited Partnership Delaware Limited Partnership Invest in private equity assets on the secondary market Strategy Invest in the Fund globally Minimum Commitment $5 million $500.000 Target Size $1 billion N/A 7 years from the date of the final closing plus up to 5 Will follow the term of the Fund, plus an additional six Fund Term one-year extensions at the manager's discretion months For the purposes of making portfolio investments and/or Capital Calls paying expenses: with not less than 12 business days' 5 days' written notice prior written notice Investment Period 4 years from the final closing Will follow the investment period of the Fund My of Pricewaterhouse Coopers LLP. Deloitte Touche My of Pricewaterhouse Coopers LLP. Deloitte Touche Auditor Tohmatsu. KPMG or Ernst & Young. LLP Tohmatsu, KPMG or Ernst & Young, LLP Administrator State Street Bank and Trust Company State Street Bank and Trust Company Legal Counsel Debevoise & Plimpton LLP Cleary Gottlieb Steen & Hamilton LLP Annual manager's report, audited financial statements Quarterly reports. capital account statements and Reporting and quarterly unaudited financial statements and capital year-end audited financial statements account statements (2nd and 3rd quarters only) Upfront Placement Fee N/A Up to 2.50% of commitment Management Fee* Investment Pencd 1.25% of commitments 0.75% of commitments Two Years after the end of the Investment 1.00% of invested capital9 0.50% of invested capital9 Period Thereafter through the The greater of 90% of the annual profit share of The greater of 90% of the management fee payable of end of the Fund term' previous year and 0.25% of invested capital the previous year and 0.20% of invested capital 12.50% after an 8.00% preferred return with a 100.00% WA. paid at the Fund. not the Onshore Feeder Fund Carried interest special hmited partner catch-up and full clawback level Subsequent Closing Higher of (a) three-month LIBOR plus 2.00% and (b) Same as the Fund Fee (if not first close) 8.00% First Close Fee Break 5 basis points pa. on management fee N/A Please read the Confidential Private Offering Memorandum of the Onshore Feeder Fund and the Confidential Private Placement Memorandum of the Fund (the "Memoranda") for the full disclosure of risk factors, conflicts of interest, complete terms, and regulatory and tax considerations of the Fund and the Onshore Feeder Fund. Please refer to the Certain Risk Factors section of the Marketing Presentation of the Onshore Feeder Fund. Notes: For further disclosure of fees, such as fees and expenses paid by the Onshore Feeder Fund and the Fund, please refer to your subscription agreement and the Memoranda. In addition to the fees and expenses described above, the Fund and the Onshore Feeder Fund will incur performance fees. management fees and expenses charged by the selected underlying funds in with the Fund invests. As a resuit, the fee structure of the Onshore Feeder Fund and the Fund will be higher than if the investor invested directly in the selected underlying funds. In addition. investors investing in the Onshore Feeder Fund rather than directly through the Fund will be subject to an additional layer of expenses. ONLY FOR INVESTORS ELIGIBLE TO !WEST IN PRIVATE EQUITY FUNDS STRONGLY PRIVATE & CONFIDENTIAL CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0108605 CONFIDENTIAL SONY GM_00254789 EFTA01451794