THIS MEMORANDUM IS PROVIDED SOLELY TO THE PROSPECTIVE INVESTOR IDENTIFIED BY THE ISSUER AND IS NOT TO BE FURTHER DISTRIBUTED OR FORWARDED BY ELECTRONIC OR OTHER MEANS TO ANY OTHER PERSON OR ENTITY WITHOUT THE EXPRESS WRITTEN CONSENT OF THE ISSUER, EXCEPT ONLY THAT THE RECIPIENT MAY PROVIDE A COPY TO SUCH PROSPECTIVE INVESTOR'S ADVISORS.

BROOKSIDE INVESTMENT PARTNERS III, LLC

$3.0 MILLION UNITS OF LIMITED LIABILITY COMPANY MEMBERSHIP INTERESTS

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

January 10, 2012

MANAGER

Rockbrook Advisors, LLC

10730 Pacific Street, Suite 247

Omaha, NE 68114

THE OFFERING

Brookside Investment Partners III, LLC, a Delaware limited liability company (the "Company", "Issuer" , the “Fund”, or "Brookside III") is distributing this Confidential Private Offering Memorandum (the "Memorandum") to provide information to qualified potential investors ("Prospective Investors") regarding an offering (the "Offering") for subscriptions of up to 30,000 Units of Membership Interests in the Company (the "Securities" or "Interests"), subject to modification at the discretion of the Company's Manager. (See SECURITIES OFFERED) The Company is offering subscriptions to the Securities at a price of $100.00 per Unit, for a total offering amount of up to $3.0 million with a minimum of $2.5 million and at the discretion of the Manager, increasing the maximum of the offering to $5.0 million. The minimum purchase by any Prospective Investor in the Securities is 500 Units, for a minimum purchase amount of $50,000, unless reduced by the Company. The maximum purchase by any Prospective Investor in the Securities shall be limited to 10,000 Units, for a maximum purchase amount of $1.0 million unless increased by the Company. The date the proposed sales will commence is on or about January 23, 2012 and the termination date of the Offering will be March 31, 2012 unless sooner terminated or unless extended by the Company (the "Termination Date").

THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION HAS NOT PASSED UPON THE MERITS OF OR GIVEN ITS APPROVAL OR DISAPPROVAL TO ANY OF THE SECURITIES OFFERED OR THE TERMS OF THIS OFFERING, NOR HAS IT PASSED UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SELLING LITERATURE. ANY REPRESENTATION CONTRARY TO THE FOREGOING IS A CRIMINAL OFFENSE. THESE SECURITIES ARE OFFERED PURSUANT TO ONE OR MORE EXEMPTIONS FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED HEREUNDER ARE EXEMPT FROM REGISTRATION. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION TO ANYONE IN ANY STATE OR IN ANY OTHER JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED.

NO COMMISSIONS OR OTHER SIMILAR FEES WILL BE PAID BY THE COMPANY IN CONNECTION WITH THIS OFFERING, AND SPECIFICALLY THE SALE OF THE SECURITIES TO INVESTORS.

THIS MEMORANDUM HAS BEEN PREPARED SOLELY FOR PROSPECTIVE INVESTORS ON A CONFIDENTIAL BASIS CONSIDERING THE PURCHASE OF THE SECURITIES OF THE COMPANY. ANY REPRODUCTION OR DISTRIBUTION OF THIS CONFIDENTIAL MEMORANDUM, IN WHOLE OR IN PART, OR THE DISCLOSURE OF ITS CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OF THE MANAGER OF THE COMPANY, IS PROHIBITED. BY ACCEPTING THIS MEMORANDUM, EACH PROSPECTIVE INVESTOR AGREES TO THE FOREGOING.

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.

THE INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS OR THE LAWS OF ANY FOREIGN JURISDICTION. THE INTERESTS WILL BE OFFERED AND SOLD UNDER THE EXEMPTION PROVIDED BY SECTION 4(2) OF THE ACT AND REGULATION D PROMULGATED THEREUNDER AND OTHER EXEMPTIONS OF SIMILAR IMPORT IN THE LAWS OF THE STATES AND OTHER JURISDICTIONS WHERE THE OFFERING WILL BE MADE. THE COMPANY WILL NOT BE REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE “INVESTMENT COMPANY ACT”), NOR WILL THE PARTIES RESPONSIBLE FOR MANAGING THE COMPANY BE REGISTERED UNDER THE INVESTMENT ADVISORS ACT OF 1940 (THE “INVESTMENT ADVISORS ACT”). CONSEQUENTLY, INVESTORS WILL NOT BE AFFORDED THE PROTECTIONS OF THE INVESTMENT COMPANY ACT OR THE INVESTMENT ADVISORS ACT.

THE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. IN ADDITION, SUCH INTERESTS MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED, IN WHOLE OR IN PART, EXCEPT AS PROVIDED IN THE LIMITED LIABILITY COMPANY AGREEMENT REFERRED TO HEREIN. ACCORDINGLY, INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF AN INVESTMENT IN THE INTERESTS FOR AN INDEFINITE PERIOD OF TIME. THERE WILL BE NO PUBLIC MARKET FOR THE INTERESTS,

AND THERE IS NO OBLIGATION ON THE PART OF ANY PERSON TO REGISTER THE INTERESTS UNDER THE ACT OR ANY STATE SECURITIES LAWS.

THIS MEMORANDUM IS NOT AN OFFER TO SELL TO ANY PERSON, OR A SOLICITATION TO ANY PERSON TO BUY INTERESTS IN THE COMPANY, IN ANY STATE OR JURISDICTION IN WHICH SUCH AN OFFER WOULD BE PROHIBITED BY LAW OR TO ANY PERSON WHO IS NOT AN “ACCREDITED INVESTOR” AS DEFINED IN THE RULES AND REGULATIONS PROMULGATED UNDER THE ACT.

THE INTERESTS ARE OFFERED SUBJECT TO THE RIGHT OF THE MANAGER OF THE COMPANY TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN PART. AN INVESTMENT IN THE INTERESTS WILL INVOLVE SIGNIFICANT RISKS DUE TO, AMONG OTHER THINGS, THE NATURE OF THE COMPANY’S INVESTMENTS AND THE NATURE OF THE INTERESTS. THERE CAN BE NO ASSURANCE THAT THE COMPANY’S OBJECTIVES WILL BE REALIZED. INVESTORS MUST HAVE THE FINANCIAL ABILITY AND WILLINGNESS TO ACCEPT THE RISKS AND LACK OF LIQUIDITY WHICH ARE CHARACTERISTIC OF THE INVESTMENT DESCRIBED HEREIN.

PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THE MEMORANDUM AS LEGAL, TAX, INVESTMENT, OR OTHER ADVICE. EACH PROSPECTIVE INVESTOR SHOULD MAKE ITS OWN INQUIRIES AND CONSULT ITS ADVISORS AS TO THE COMPANY AND THIS OFFERING AND AS TO LEGAL, TAX, AND RELATED MATTERS CONCERNING AN INVESTMENT IN THE INTERESTS.

THIS MEMORANDUM IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE OPERATING AGREEMENT OF THE COMPANY AND THE SUBSCRIPTION AGREEMENT RELATED THERETO. NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THIS OFFERING TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN AS CONTAINED IN THIS MEMORANDUM. STATEMENTS IN THIS MEMORANDUM ARE MADE AS OF THE DATE HEREOF UNLESS STATED OTHERWISE HEREIN, AND NEITHER THE DELIVERY OF THIS MEMORANDUM AT ANY TIME, NOR ANY SALE HEREUNDER, SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO SUCH DATE. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SALE OF THE INTERESTS. OFFERS, PURCHASES AND SALES OF THE INTERESTS SHALL ONLY BE MADE PURSUANT TO THE TERMS OF AND CONDITIONS OF AN EXECUTED SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND SUCH INVESTOR. PRIOR TO THE FINAL CLOSING OF THIS OFFERING, THE MANAGER OF THE COMPANY RESERVES THE RIGHT TO MODIFY ANY OF THE TERMS OF THE OFFERING AND THE INTERESTS DESCRIBED HEREIN.

THE COMPANY HAS AGREED TO PROVIDE TO EACH PROSPECTIVE INVESTOR OR HIS OR HER REPRESENTATIVE, OR BOTH, PRIOR TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREIN, THE OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE ANSWERS FROM GRANT E. LIPPINCOTT, THE MANAGING MEMBER OF THE MANAGER OF THE COMPANY CONCERNING THE TERMS AND CONDITIONS OF THIS OFFERING WITH REGARD TO THE SECURITIES, AND TO OBTAIN ANY ADDITIONAL INFORMATION, INCLUDING ANY INFORMATION INCLUDED BY REFERENCE, TO THE EXTENT HE POSSESSES SUCH INFORMATION OR CAN ACQUIRE IT WITHOUT UNREASONABLE EFFORT OR EXPENSE, NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION SET FORTH HEREIN OR TO PROVIDE ADDITIONAL INFORMATION REGARDING THE COMPANY, THE INVESTMENT OR THE SECURITIES. REQUESTS FOR SUCH INFORMATION SHOULD BE DIRECTED TO GRANT E. LIPPINCOTT, ROCKBROOK ADVISORS, LLC, 10730 PACIFIC STREET, SUITE 247, OMAHA, NE, 68114.

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BACKGROUND

BROOKSIDE INVESTMENT PARTNERS III, LLC

Brookside Investment Partners III, LLC (“Brookside III”) plans to create a $3 million investment fund focused on unique, niche investments within the insurance industry. The Principals of the Manager of Brookside III, Rockbrook Advisors, LLC (“Rockbrook” or the “Manager”), have had significant investing and operating experience in the property & casualty insurance sector. They believe they will be able to leverage this experience to provide strategic and operational assistance to each portfolio company in which they invest. The Company has been formed to make direct investments and acquire companies in the insurance and financial services sector (the "Portfolio Companies") that the Manager deems have established market positions, superior financial track records, and attractive future financial prospects. Rockbrook will primarily look for companies with successful management teams that have demonstrated their ability to manage a profitable operation but will also review opportunities to provide the initial capital to support an experienced management team in the creation of a new business, To pursue these long term goals, the Company is offering $3.0 million of its Units under this Memorandum (with the right to increase the offering to $5.0 million) (this "Offering"). Funds from the sale of the Units under this Offering will be used for investments in Portfolio Companies. In addition, Investors will have ongoing obligations for other Company expenses beyond their Commitment amounts. (See USE OF PROCEEDS) In order to have sufficient funds for investment in Portfolio Companies, the Company will need to raise a minimum of $2.5 million under this Offering, with a goal to obtain total capital in the range of $3.0 million for the Fund. (See SECURITIES OFFERED) Of this amount, the Company has obtained a commitment from an affiliated fund, Brookside Investment Partners II, LLC for $1.0 million.

BUSINESS OF THE COMPANY

The Principals feel this is a particularly good time to be investing in early stage companies in the insurance industry and believe there is a great opportunity for investors with a medium term (5-7 year) time horizon. Many insurance related businesses have struggled during the current economic environment. At the same time, the insurance industry has encountered a pro-longed cyclical “soft” market, which is characterized by a period of decreasing insurance pricing. As a result, valuations are exceptionally attractive because target investment companies have failed to meet their revenue and profit projections during this period. The Principals believe many of these companies are in a position to increase both their revenue and profit streams substantially as the economic climate and the insurance industry outlook begin to improve. The circumstances should therefore present an opportunity to buy solid insurance related businesses at attractive valuations.

Investors in Brookside III should benefit not only from more favorable economic and industry conditions in the future, but also from an opportunity to invest in a large industry with limited competition in the Fund’s targeted deal size. While there are larger, knowledgeable players that invest in the insurance industry, they typically look to make investments greater than $20 million. To date, Rockbrook has encountered very few generalist investors who are willing to invest between $1 and $3 million within the insurance industry. This is primarily because the industry can be difficult to understand due to the complicated accounting and actuarial methodologies that need to be considered when evaluating insurance related

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investments. Rockbrook’s Principals have previous experience in these areas and the ability to identify attractive insurance investment opportunities for Brookside III.

SECURITIES OFFERED

The Company is offering 30,000 Units of membership interests to qualified investors at a rate of $100.00 per Unit of Interest, for an aggregate offering amount of $3.0 million. A minimum purchase of 500 Units, for a total minimum purchase amount of $50,000, shall be offered to each investor, with additional increments of 250 Units available at the rate of $100.00 per Unit (See SUBSCRIPTION DOCUMENTS). The Securities will be purchased only for cash. This Offering will require a minimum of $2.5 million to be raised. In the event subscriptions for the Units shall total less than this minimum requirement prior to the Termination Date, the Company will terminate this Offering and will not accept any funds from those subscribing for the Units. While the Offering is presently limited to $3.0 million, the Manager in its sole discretion shall have the right, exercisable prior to the Termination Date, to offer under this Offering an additional 20,000 Units at the rate of $100 per Unit, for additional aggregate offering amount of $2.0million, bringing the total number of Units offered to 50,000 and the total amount potentially available under this Offering to $5.0 million. While the Company is initially targeting a Fund in the range of $3.0 million, the Manager has been given the discretion to offer these additional Units in the event the Manager deems there is appropriate investor interest and opportunities for use of such funds by the Company. Any such election by the Manager shall not be the basis for any investor who has previously subscribed to the Securities to revoke or otherwise terminate their subscription or Commitment. The Manager will notify investors who have previously subscribed if the Manager elects to expand this Offering for the additional 20,000 Units.

In order to attain its investment objectives, the Company has determined that the Company must obtain subscriptions for a minimum of $2.5 million for the Unit Interests (the "Minimum Requirement") to create investment opportunities for the Company. A subscription of $1.0 million has already been received from Brookside Investment Partners II, LLC ("Brookside II"), which was used to fund the investment in Asterisk Financial Group, Inc. (“Asterisk”). In the event the Minimum Requirement is not attained prior to the Termination Date, the Offering will be terminated and no subscriptions from such Offering will be accepted.

The Securities offered under this Offering represent ownership in the Company and also relate to each investor's percentage interest in the capital, profits, and losses of the Company. Each Prospective Investor's percentage interest will depend upon the final number of members accepted by the Company and the total Interests purchased by each investor (see "SECURITIES BEING OFFERED").

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DESCRIPTION OF BUSINESS

MARKET OPPORTUNITY

Insurance Industry Overview

In general terms, the insurance industry is segmented into two categories: property and casualty insurance and life and health insurance. Property and casualty insurance covers damage to or loss of policyholders’ property and legal liability for damages caused to other people or their property. Property and casualty insurance includes auto, property, general liability, workers’ compensation and excess (umbrella) coverage for personal and commercial insurance buyers. The property and casualty industry is further divided into two sub segments: standard lines and surplus lines. Surplus lines insurers are less regulated than standard lines insurers. In addition, insurance purchased from a surplus lines company is not covered by the state guarantee fund if the insurer runs into financial trouble. The surplus lines market exists primarily to insure risks that standard lines companies decline to insure or will only insure at a very high price, with many exclusions or with a very high deductible.1 The second insurance category is life and health, which includes not only life insurance and health insurance, but also other commonly known employee benefit lines such as accident and disability insurance.

The insurance industry is comprised of insurance underwriters or insurers, insurance distribution companies and businesses that provide services to the insurance industry. Insurance underwriters include both specialty- and multi-line insurers, some of whom operate on a regional basis while others have a national presence. A specialty-line insurance company often possesses greater knowledge and expertise with the insurance product it sells than a multi-line insurer does for the same product. Therefore, specialty-line insurers are often able to develop an experience database which allows them to underwrite, select, and price risks as well as manage claims expenses in a manner superior to most multi-line insurers. Also, specialty-line companies often are able to react more quickly to changes in the marketplace that affect their particular product and, therefore, are better able to capitalize on new business opportunities.

Regional companies, which compete in one or a limited number of states, generally have a greater understanding of the competitive, legal, and regulatory environment in the jurisdictions in which they operate and retain the flexibility to respond quickly to legal, market, and other changes that can affect the profitability of their business. In contrast, many national insurers will make decisions that have implications in all their markets based on their experience in a single large state such as California or New York. It is not uncommon for a company that has poor experience with a line of insurance in one of these larger states to stop writing the affected line

1 Buying Insurance: Evolving Distribution Channels. 3 Sep. 2009. Insurance Information Institute.

3 Sep. 2009 <http://www.iii.org/issue_updates/222669.html>.

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of business in all states. These national companies will sometimes abandon a profitable book of business in a state and leave a void for regional companies to exploit.

Insurance distribution includes brokers or wholesalers, managing general agencies, and retail agencies. Both retail agents and brokers are known as producers. Traditionally, retail agents represent the insurance company and brokers represent the insurance buyer (or insured). Generally, it is the broker’s responsibility to seek out potential insurance companies that can provide the buyer with the best overall price, terms and conditions.

Brokers may be retail or wholesale. Wholesalers act as intermediaries between retail brokers or retail agents and insurance company underwriters. To work with surplus lines companies, wholesale brokers must be licensed as surplus lines brokers in the state where the policyholder or the risk to be insured is located. Wholesale brokers may also work with other wholesale brokers in the London Market or elsewhere to secure coverage.

Some wholesale brokers are also managing general agents or general agents, who are given authority by insurers to underwrite and “bind” insurance--provide temporary coverage until an insurance policy can be issued. Managing general agents or general agents may also arrange so-called “program” business, which is specialty insurance for homogeneous groups of policyholders, such as members of a specific industry. These programs, which are often offered and endorsed by trade associations, may provide coverage at lower prices.2 Managing general agents, who have a close relationship with the insurance companies they work with, may also handle claims and even help in the placement of reinsurance contracts--reinsurance is insurance for insurance companies.

Insurance services can encompass a wide array of different businesses from the financing of various insurance products to subrogation of claims to handling claims (TPAs or third party administrators). Service providers may work directly with the insurer, the agent or the insurance buyer in providing their products.

The property and casualty insurance industry has historically been characterized by business cycles lasting between five and seven years. At the high point of the cycle, also known as a hard market, industry capacity is constrained, competition lessens, and industry participants are able to earn a higher return on capital. Conversely, during the low point of the cycle, known as a soft market, the industry has excess capacity, competition increases, and market forces act to reduce profitability and returns on capital. The profitability of a particular insurance product is a function of losses (claims and litigation expenses), which usually vary by line of insurance. For this reason, the historical cyclical upturn and downturn in the insurance industry often varies by line of insurance. Accordingly, investors with a product focus may be able to invest in selective lines of insurance at the low point of the cycle and have an opportunity to earn above-average returns when the market for that particular product rebounds.

2 Buying Insurance: Evolving Distribution Channels. 3 Sep. 2009. Insurance Information Institute.

3 Sep. 2009 <http://www.iii.org/issue_updates/222669.html>.

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The insurance industry is still highly fragmented in many lines of insurance. There continues to be consolidation in the insurance industry, which is creating additional investment opportunities. Specialty-line companies or distribution firms with complementary product offerings often seek to merge in order to achieve cost savings or increase their overall market share. Likewise, mergers involving regional companies continue to increase as industry participants try to consolidate certain functional areas to achieve cost savings and improved financial performance. Merger and acquisition activity in the insurance industry is not limited to regional and specialty-line companies. Larger multi-line companies continue to acquire or merge with other competitors in order to achieve operating economies of scale and to reduce industry capacity by returning excess capital to shareholders. While the Company does not intend to pursue an acquisition of a national or multi-line insurance company, the mergers of such companies may create opportunities for the Company to acquire either a product-line or regional insurance operation that is no longer a strategic asset or must be divested for anti-trust reasons following a merger with or acquisition by larger companies in the industry. Such divestitures often create acquisition opportunities that provide attractive terms since the companies involved in the transactions are often anxious to sell the unwanted business or assets in order to move forward with their merger.

Additionally, in the past, the insurance industry has been fairly stagnant, with little innovation, especially in regards to new product lines and services that the insurance industry can provide. Industry outsiders continue to think creatively about new insurance offerings that fulfill a basic need in the market. However, many of these entrepreneurs lack the expertise required to establish, finance and successfully operate a company in a highly regulated industry. These entrepreneurs are looking for financial partners that understand the insurance industry and can assist them in their entrepreneurial efforts.

INVESTMENT FOCUS AND STRATEGY

Industry Focus of Brookside III

A critical element of the Company’s investment strategy is its exclusive focus on investments or acquisitions in businesses where the Manager can add value from a strategic or operating perspective. The Company’s primary industry focus will be insurance and other financial services. The Company will target early stage companies in these industry groups. The Principal has relevant operating experience in these industries and with companies at an early stage of development, which is expected to enable the Manager to source and identify attractive investment opportunities and add value to Brookside III’s investments. The Manager believes that there will be numerous opportunities in the near term for Brookside III to make attractive investments in early stage insurance risk bearing, distribution, and services companies that either specialize in a particular type of insurance product or sell insurance in a specific state or regional market.

Insurance companies that have concentrated on developing expertise with a particular type of insurance product, or in a particular state or regional insurance market, have generally outperformed companies that sell a broad range of insurance products or operate on a nationwide basis. In addition, specialty-line and regional insurance companies are generally smaller than multi-line or national insurers and, therefore, offer the Company the chance to acquire a majority or significant minority position and obtain representation on the board of directors. It is anticipated that the past operating experience of the Principals will be beneficial

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in improving the financial performance of specialty-line or regional insurance companies. Accordingly, the Company’s primary industry focus is projected to be on early stage companies in the property and casualty industry.

Geographical Focus of Brookside III

Brookside III’s primary investment focus will be on insurance opportunities within the U.S. However, the Manager may pursue opportunities outside of the U.S.; particularly in jurisdictions which the Principals perceive have a developed and favorable insurance regulatory and legal environment such as Bermuda, the U.S. Virgin Islands, and the Cayman Islands. Many of the islands offer more attractive regulations for U.S. insurers seeking to maximize their capital utilization and improve their rates of return.

Deal Size Focus of Brookside III

Brookside III plans to focus principally on investment and acquisition opportunities with less than $15 million in enterprise value. Competition for smaller value transactions is less intense because fewer investment bankers get involved and most transactions do not involve an auction process. In addition, many private equity firms and other institutional investors with large funds to invest do not want to get involved if they cannot invest at least $10 million in a target company.

Since the market for smaller transactions tends to be less efficient, especially in some of the specialized industries the Company is targeting, management believes that the Company has a better opportunity to make investments at attractive valuations. Opportunities also exist to add more value with early stage smaller companies as a result of incremental enhancement of managerial experience and expertise.

Stage of Growth Considerations for Brookside III

Brookside III’s investment strategy will be defined by industry focus, geographical concentration, and deal size. However, within these constraints, Brookside III will consider investment opportunities at various stages of development, with a primary emphasis on early stage investments.

Although an investment in a new business will require a greater commitment of the Manager’s time, it may be desirable in certain situations since there is less risk that past actions will develop into future problems, an especially important consideration in industries such as insurance or banking with estimated liabilities that can change over time. The Manager will focus its efforts on early stage businesses that have management teams with significant experience in the insurance industry.

INVESTMENT CRITERIA

If fully funded, the Company plans to initially identify and make three investments in the insurance industry. Each investment will likely range in size from $500,000 to $1.0 million. The principal criteria to be utilized by the Manager for evaluating investment opportunities typically would include the following:

1) Strong potential for achieving profitability and cash flow break-even within twelve to twenty-four months;

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2) Niche product or service or regional focus in attractive states (insurance specific);

3) Strong competitive advantage(s);

4) Attractive growth potential;

5) Competes in a fragmented market;

6) Experienced management team with successful track record in the insurance industry;

7) Attractive options for liquidity in five to seven years;

8) Undervalued assets which provide an opportunity to realize value within approximately five years.

9) Limited financial leverage and adequate liquidity to support the execution of the business plan for a minimum of 12-18 months.

The Company plans to pursue investment opportunities that have a projected compounded annual rate of return of 20% to 25%. While the Company will seek to achieve returns in these ranges from investments, there can be no assurance that any investment made by the Company will be profitable to the Company. In many cases the ability to obtain positive returns, or even avoid loss, is beyond the control of the Company, and Prospective Investors will need to carefully consider the risks in such an investment. See HIGH RISK FACTORS.

The Company will likely acquire a minority position in Portfolio Companies which are attractive investments. The Manager hopes to be able to apply the experience and expertise of the Principals and others to help Portfolio Companies increase their profitability. In all cases, the Company will pursue representation on the Board of Directors of the Portfolio Companies; and will attempt to obtain observer status in situations where it is not possible to obtain full voting rights on the Board of Directors of a Portfolio Company. As stated above, the Company will seek to invest in Portfolio Companies with strong management teams that have demonstrated their ability to manage a profitable operation. In such cases, the Company would support existing management and would work with Portfolio Company personnel to maximize the value of the business. In other cases, the Principals may take a more proactive role, on an interim basis, in the day-to-day operations of a Portfolio Company. This is most likely with Portfolio Companies in the early stages of development, if there has been unexpected turnover in the management team of a Portfolio Company, or when the Portfolio Company has not achieved satisfactory financial results. In certain of these situations, the Company, subject to rights obtained in the investment, might replace existing management with experienced industry personnel who have a track record of success in a similar business. The Manager may provide consulting or other services to Portfolio Companies. The Principals may, although it is not anticipated, take a full-time position on an interim basis with one or more Portfolio Companies (in the event it is required for ongoing success of the business).

The Manager will work with individuals who are experienced in analyzing and valuing potential investments and structuring transactions. The Manager expects to leverage the operating experience of the Principals and other professionals in the insurance and financial services industries to add value to a Portfolio Company after the investment is closed. For this reason, the Manager will only invest in or acquire companies in industries where it has

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experience or transferable operating skills, an important differentiating factor to both Brookside III investors as well as Portfolio Companies.

RELATIONSHIPS WITH OTHER INSURANCE INDUSTRY INVESTORS

The Manager may coordinate a co-investment with different insurance industry investors on Portfolio Company investment opportunities. This could include individuals or firms that are interested in developing a presence in the insurance area, but want a co-investor with greater knowledge and operating experience to help identify investment opportunities and collaborate with Portfolio Companies on business issues. This type of relationship would be structured so the Manager could work with a co-investor in areas of mutual interest, but retain the flexibility to explore other investment opportunities independently for Brookside III. The primary focus will be on investing in, or acquiring, early stage companies in the distribution and services areas of the property and casualty insurance industry.

These co-investments could provide Brookside III with a greater number of investment opportunities in a potentially broader geographical area, plus the ability to participate in larger transactions. In this type of relationship, both the co-investor and the Manager would source potential acquisitions in the insurance and financial services market. If either party identifies an opportunity to invest in or acquire a business, then Brookside III and the co-investor would have the ability to invest in the opportunity. The parties would jointly evaluate prospective investment opportunities. The Manager would be able to leverage the significant operating experience of its Principals and other employees to offer a broad range of consulting and advisory services to Brookside III’s co-investor and Portfolio Companies.

For each potential investment/acquisition opportunity, the Manager would be able to provide assistance with:

1) investment due diligence, including an assessment of strategy, market position, management, reserve adequacy, and financial strength of the target;

2) structuring the transaction;

3) optimizing future financing and reinsurance options; and

4) active board participation to provide ongoing oversight and strategic direction to each business acquired.

At the same time, the Manager would undertake to capitalize on the experience of its co-investors, beginning with deal structuring and continuing with active investment, and concluding with a successful liquidity event. Brookside III does not anticipate that its independent investments will be large enough in size to acquire a majority ownership position in any of its Portfolio Companies. As a result, Brookside III would be able to leverage its capital and maximize its control by co-investing with different parties.

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USE OF PROCEEDS

The Company has established a minimum offering requirement of $2.5 million in connection with the Offering. Proceeds of the Offering will be available to the Company to make investments in portfolio companies. Management Fees, Organizational Expenses of the Company, and any Extraordinary Expenses will be in addition to each investor’s Commitment.

There are a significant number of variables which will affect the performance and opportunities of the Company, many of which are outside the control of the Company (see "HIGH RISK FACTORS"). Moreover, the number of investments made, and the duration over which those investments are made, will impact the overall expenses of the Company. Assuming the full offering amount of $3.0 million is raised, the Company expects to make three (3) investments. An initial investment of $1.0 million has been made by the Company in Asterisk (which was funded through the commitment of Brookside II, which will be proportionally refunded with Commitment funds from other Investors resulting in pro-rata ownership of Asterisk among all Investors, including Brookside II). Organizational Expenses of approximately $12,500.00 will be collected upon closing and will be outside of the offering amount. In addition, the 2% annual Management Fee will be collected separately from the offering amount for the Term of the Company. Management Fees may be called in advance for periods of up to six (6) months.

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MANAGEMENT INFORMATION AND EXPERIENCE

INSURANCE INVESTING EXPERIENCE

The Principals have experience in creating, capitalizing, operating and liquidating businesses within the insurance industry. After working for the Berkshire Hathaway Insurance Group, Grant E. Lippincott created Rockbrook Partners, LLC (“Rockbrook I”) in 1996 to make investments in companies in the property and casualty insurance industry. In 1996, Grant and a former colleague from Berkshire Hathaway created an insurance holding company Aspen Holdings, Inc. (“Aspen”). Rockbrook I became the largest shareholder of Aspen and its 100% owned subsidiary, FirstComp Insurance Company, which is a monoline workers’ compensation insurance company. The Principal also helped expand Aspen by creating several other related businesses focused on the workers compensation insurance market. Aspen started a managing general agency to earn commission income on the sale of workers’ compensation insurance for other insurance companies and reinsurers. Aspen also established an audit business to review customer payrolls to make sure the insurance premium received was appropriate for the risk assumed. Aspen sold the premium audit business in 2004 and in 2005 the Principal led a successful recapitalization of Aspen for the benefit of the Rockbrook I members. In 2010, Aspen was sold to Markel Corporation (MKL) for $135 million plus potential future continent consideration tied to the development of FirstComp’s loss reserves over time. The Principals also capitalized and managed a Bermuda captive reinsurer in 2003. This company, which offered quota share reinsurance, successfully commuted its reinsurance activity and the charter was sold in 2007.

The Manager of Brookside III, Rockbrook Advisors, LLC, is also the Manager for Brookside I and Brookside II. The Manager has invested $11.6 million from Brookside I and II along with other co-investors in five businesses within the insurance industry. The Manager has invested $2.0 million from Brookside II in two businesses in the insurance industry, and will be investing $1.0 million in Brookside III, leaving capacity for one final investment for Brookside II. Below you will find background information on past investments made by Rockbrook Advisors for Brookside I and II and a description of several investments being considered for Brookside III.

The first investment for Brookside I was in a California non-standard automobile general agency, Align General Insurance Agency (“Align”). Align, which was started by an experienced insurance distribution professional, has a highly automated quoting and submission platform for its retail agents. The strategy was to expand the non standard auto business geographically and look for other insurance products to acquire or develop internally which would leverage Align’s automated and cost efficient distribution platform. Align acquired a general agency that specialized in certain classes of commercial auto and owned a property and casualty retail agency. Ultimately, Align was acquired in 2007 by James River Insurance (“James River”), an insurance company that wanted a highly automated distribution platform to support an expanded strategy to write small surplus lines accounts through independent retail agents. This was a successful liquidity event for the Brookside I fund, and a very attractive return (2x multiple) was achieved for the Brookside I investors in 17 months. Subsequently Brookside I and Brookside II participated in a management led buyout of Align from D.E. Shaw (owner of James River) in October 2009.

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The second investment was in R.S. Holdings. R.S. Holdings offers rental guaranty insurance through its subsidiary, Insurent. Insurent provides guaranty insurance to protect landlords from financial loss if a tenant fails to pay his/her rent. Landlords in large metropolitan areas often utilize an income test to determine if a prospective tenant meets their financial criteria to rent an apartment (landlords in New York typically require the tenant’s annual income to be a minimum of 40-50x the monthly rent). Historically, a tenant that did not meet the landlord’s income test needed an acceptable co-signor on the lease, or had to post a larger security deposit in order to be able to rent the desired apartment. The Insurent lease guarantee replaces the need for a co-signor or larger security deposit in situations where the individual’s income is slightly less the landlord’s requirement. A tenant can go online and get pre-approved for the Insurent lease product. The approved tenant can then pursue an apartment in any building where the Insurent Lease Guaranty is accepted and be confident that they will be able to meet the landlord’s financial requirements. This product, which is designed to meet an existing need in the real estate market, has received approval from the New York Department of Insurance as well as many major landlords in New York. Insurent hopes to be able to grow into other large markets over time. .Although this product has potential in the New York market, the Principals have written this investment down due to the company’s lack of traction in the market and the management team’s inability to execute on the business plan.

The third investment was in Horticultural Asset Management, Inc. (“HMI”) which provides property owners, insurers and others with a full suite of products and services covering trees and shrubs, including condition assessments, replacement cost valuations and a range of insurance claim support services such as emergency tree removals and cause of loss analyses. The Company believes that it has the largest database of product and pricing information on plant material in the landscaping industry. HMI is currently providing its inspections to insurance companies to support enhanced insurance products on landscaping, as well as for risk mitigation by identifying trees and other landscaping items that could fail and fall on insured property. Additionally, HMI has created and manages a network of certified tree care providers that insurance companies utilize to assist with claims that involve landscaping items. The HMI claims network has been of great value to many of the leading insurance companies, disaster recovery firms and individual contractors following major storms when trees have caused substantial damage to real property. The Company recently created the treeShield® warranty in conjunction with an insurance partner and its network of tree care providers to provide property owners with a comprehensive storm recovery solution should damage occur to their trees and shrubs that are maintained by a tree care provider.

The fourth investment was in Insurance Specialty Group, LLC (“ISG”). Bruce Harrell, the co-founder CEO and President of ISG, has an extensive insurance background. At the time of the investment, the Company was segmented into three divisions: brokerage, underwriting and professional liability. The brokerage operation places hard to find commercial insurance coverage for retail agencies with residential home builder clients. The underwriting group is responsible for developing and maintaining unique programs for residential home builders. The professional liability division develops and manages professional liability products and programs, including Errors and Omissions coverage, Directors and Officers coverage and Employment Practices Liability Insurance. ISG sold the professional liability to Align Financial Group in 2009. The remaining business, which has a heavy concentration in the residential home building industry, has suffered a significant decline in revenues and has a highly leveraged balance sheet. While the Principals continue to feel the ISG construction underwriting platform is a valuable asset, there is still little visibility on when the residential home builders’ market will improve and concerns about whether the Company, with its current financial position, will be able to survive long enough to participate in any rebound in the

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construction market. As such, the Principals have written this investment down to zero because the current estimated value of the business is less than the dollar amount owed to the Company’s creditors.

The final investment for Brookside I and the first investment for Brookside II was in Align ($1.0 million was invested by each entity, for a total investment of $2.0 million). Following its acquisition by D.E. Shaw, James River decided to refocus its efforts on its core risk bearing insurance business and determined that Align was no longer a strategic component of its business plan. The CEO had the opportunity to repurchase Align from James River at this point. While part of the James River Group, Align had increased its revenues by a multiple of three, extinguished its debt, made additional investments in the technology platform, and added two divisions (construction and property insurance). As a result of James River’s decision to exit the distribution business, the CEO of Align was able to negotiate very attractive terms to repurchase his business. Brookside I (and Brookside II) reinvested in Align at essentially the same valuation the fund received when it sold the business to James River for in 2007, an amount which is equal to approximately 50% of James River’s total investment in Align.

In August of 2011, Align agreed to spin off its non-standard personal auto insurance distribution division into a new entity, Personable General Insurance, LLC (“Personable”), in partnership with a new equity partner, Excellere Partners (“Excellere”). Excellere is a private equity group located in Denver with whom the Principals have had a long-standing relationship. Excellere committed up to $35 million in total capital to Personable which will facilitate the purchase of other non-standard automobile assets. Personable closed on its first acquisition - a non-standard automobile insurance carrier with licenses in approximately 40 states at the end of 2011. This acquisition allows Personable to participate in the underwriting profit (and commissions) related to the non-standard auto insurance book of business which Align has historically produced for its insurance company partners. Brookside II was able to participate alongside Excellere in the Personable acquisition, by investing $1.0 million in capital in the business.

Brookside III Investments

Brookside III completed its first investment in early January 2012, through its capital commitment from Brookside II, into Asterisk Financial Group. Below is a summary of the business.

Asterisk Financial Group

Asterisk Financial Group is a managing general agency that offers Personal Guarantee insurance (PGI). PGI is a new product that gives small and medium sized business owners, franchisees, and commercial real estate investors protection for their personal assets when they sign a personal guarantee for a commercial loan. If, after liquidating the business assets, the lender seeks personal assets to repay the balance of the loan, PGI will cover 30% to 70% of the borrower/insured’s net liability, depending on the coverage purchased and the terms of the policy. We have been monitoring Asterisk, which is the exclusive distributor of PGI, for over 2 years. The Company is responsible for underwriting and claims handling authority for AmTrust, an A rated risk bearing partner/insurance carrier. The highly qualified and experienced management team, with backgrounds in insurance and banking, has been successful in fostering a number of key distribution partnerships with major insurance wholesalers, large franchisors, and bank owned insurance agencies. In addition to insuring an individual borrower/guarantor against personal loss in the event that their personal guarantee is called,

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several banks have recently purchased insurance coverage from the Company to protect against the potential loss related to their net retained portion of SBA loans which are not guaranteed by the government. The Company recently was granted a patent for its proprietary insurance underwriting system. The Company recently completed a capital raise of $2.5 million ($1.0 million from Brookside III) and is also working on a new guarantee product for the surety bond market.

Potential Investment Opportunities for Brookside III

Below are highlights of several of the early stage investment opportunities the Principals are currently reviewing as investment opportunities for Brookside III (each herein a "Target"). While there is no guarantee that there will be an investment in any of these Targets, these are representative of the type of investments that will be considered for Brookside III.

Contract Litigation Insurance Opportunity

This Target currently distributes two litigation insurance products: Plaintiff Contract Litigation Insurance and Defendant Contract Litigation Insurance, which were specifically created by this management team to help individuals, businesses and corporations mitigate the financial risk of having to pay their adversary’s attorneys’ fees in contract disputes. Many contracts provide that if a lawsuit arises, the winner in the lawsuit is entitled to recover their attorney’s fees from the losing party. This type of contract provision is often called a “prevailing party” provision or “loser pays” provision. The Target is the exclusive distributor of contract litigation insurance for Zurich, an A+ rated insurance carrier. This business has valuable intellectual property which includes a proprietary system that allows the Target to: identify when a new lawsuit has been filed at either the state or federal level; and directly market their product to all of the parties (plaintiff, defendant and the attorneys) involved in the litigation. The Target has also developed relationships with some of the largest wholesale brokers who are now distributing the Target’s contract litigation insurance products to their agents and customers. By targeting these parties at the onset and throughout the life of the litigation, the Target has been successful in gaining traction with the business. We were introduced to this Target six months ago. The Target is raising $2.5 to $3.5 million and is also working on several new related products, including one for patent litigation.

Fire and Freeze Monitoring Company

Fire and freeze are the leading causes of property insurance losses. This Target has developed a monitoring device that allows primary homeowners, vacation home owners, and businesses to monitor their property for fire, freeze and temperature variations. When an increase or decrease in temperature occurs, the appropriate parties (homeowner, landlord, etc.) can be notified via text, voice and/or e-mail message. In the event of a potential fire, the fire department can be dispatched immediately to the location. Due to the substantial loss mitigation that results from this product, some insurance companies are purchasing the device to provide to their clients while others are offering a significant premium discount to clients that purchase and install the product. The Target’s product also captures a great deal of real time information related to conditions at the property owner’s location. Insurance companies and property management companies can utilize this information to help reduce the risk of future losses. There appears to be a large potential market since the monitoring device and service is

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much less expensive than a home security system. The Target has received several patents for the product, and is working on extensions of some of these patents to expand the capabilities of the unit; for example, a cellular transmission device (which eliminates the need for a land line and also allows the unit to be located anywhere on the property). The Target has contracts with a number of insurance carriers, as well as with some large property management companies who are interested in installing these units in their buildings. We have been working with this Target and monitoring its progress for the past 12-15 months. The Target is raising $5 million and has already identified a potential lead investor in this round who will allow us to participate at the $1 million level.

Insurance Compliance Software Business

Insurance companies deal with complex state and federal regulation that is constantly changing (on average, 3,400 regulatory changes are made annually). Most companies monitor and implement changes to the new regulation manually with large teams of internal compliance personnel. The cost and time required for insurance companies to manage the compliance function continue to increase. In addition, many insurance companies annually incur millions of dollars in fines for not correctly following new or changed regulations. This Target has developed an interactive software product which identifies and monitors all of the relevant regulations for the Life and Health and Property and Casualty insurance industries. Each insurance company can have a customized solution to assign, manage, monitor and validate the tasks which are required to stay compliant with state regulations. We were introduced to this Target 12 months ago. The Target is raising $1 million.

Each of the early stage companies considered for the fund, including the opportunities

highlighted above, will have experienced management teams, valuable intellectual property, insurance contracts with highly regarded carriers and channel partners with broad distribution capabilities. The businesses the Principals are considering for the Brookside III fund will have strong prospects for future growth and profits.

Brookside III

SIMILAR TO BROOKSIDE I AND BROOKSIDE II, THE LONG-TERM OBJECTIVE IS A COMPOUNDED ANNUAL INTERNAL RATE OF RETURN OF 20-25%. THE FOREGOING DISCUSSION OF EXPERIENCE IS INTENDED TO GIVE PROSPECTIVE INVESTORS SOME BACKGROUND ON THE PAST EFFORTS OF THE PRINCIPALS AND INVESTMENT TYPES PURSUED BY THE PRINCIPALS. THERE CAN BE NO ASSURANCE THAT FUTURE OPPORTUNITIES OF SIMILAR NATURES AND RETURNS WILL BE AVAILABLE OR, IF AVAILABLE, WILL BE PURSUED BY THE COMPANY. ANY NUMBER OF FACTORS, CIRCUMSTANCES AND CONDITIONS MAY MATERIALLY IMPACT INVESTMENT OPPORTUNITIES AND RETURNS FOR THE COMPANY. BROOKSIDE III MAY NOT INVEST IN THE INVESTMENTS IDENTIFIED ABOVE. THEREFORE, WHILE THE INFORMATION REGARDING INVESTMENTS BY BROOKSIDE I, BROOKSIDE II AND THE PRINCIPALS IS ILLUSTRATIVE, PROSPECTIVE INVESTORS MUST CONSIDER THAT BROOKSIDE III WILL NOT BE PARTICIPATING IN OR BENEFITTING FROM THE RESULTS FROM SUCH INVESTMENTS. FUTURE PERFORMANCE AND RETURNS FOR BROOKSIDE III SHALL BE LIMITED SOLELY TO THOSE INVESTMENT OPPORTUNITIES PURSUED BY THE COMPANY DURING THE TERM OF THE FUND.

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MANAGEMENT AND OPERATING PERSONNEL

Principals

Grant E. Lippincott, Managing Member of Rockbrook Advisors

Grant E. Lippincott is the controlling member of Rockbrook Advisors, LLC, which will manage Brookside III. Mr. Lippincott has extensive experience in the insurance and financial services area.

Mr. Lippincott is the manager of Rockbrook Partners, LLC (“Rockbrook I”), established in 1996 to make investments in the insurance industry. Rockbrook I was one of the largest investors in Aspen Holdings, Inc. (“Aspen”), an insurance holding company created by Mr. Lippincott and two partners in 1997 and sold to Markel Insurance in 2010. Mr. Lippincott served as the President of Aspen from 1997 to 2004. During this time, he was responsible for co-founding FirstComp Insurance Company, a successful mono-line workers’ compensation insurance company, FirstComp Insurance Group and Pinebrook Insurance Group, both managing general agencies, and Precision Premium Consultants, a premium audit consulting company. Mr. Lippincott is also the founder of Banyan Re, LLC, and its wholly-owned subsidiary Banyan Re Limited, a Bermuda-based reinsurance company which began operations in 2003 and was sold in 2007.

From 1992 to 1996, Mr. Lippincott was Vice President and a member of the board of directors of several insurance companies that together comprise the Berkshire Hathaway Homestate Companies (“BHHC”), a member of the Berkshire Hathaway Insurance Group. While with BHHC, Mr. Lippincott had a variety of operating responsibilities including managing the claims department and the municipal insurance group. He founded the specialty commercial auto group, was the professional liability and commercial umbrella underwriter, and the risk manager for the Berkshire Hathaway Insurance Group.

From 1985 to 1990, Mr. Lippincott was an Associate with the Technology Finance Group in the Corporate Finance Department at Smith Barney. While with Smith Barney, he worked on a variety of public and private financings, as well as merger and acquisition assignments, for emerging growth companies in the technology industry.

Mr. Lippincott graduated from the Harvard Graduate School of Business with a Master’s in Business Administration in 1992 and has a Bachelor’s of Science in Economics from the Wharton School at the University of Pennsylvania, graduating Magna Cum Laude in 1984.

Mr. Lippincott is married with two children, and currently lives in Omaha, Nebraska. He is the co-recipient of the Ernst and Young 2002 Entrepreneur of the Year Award for financial services in Nebraska and Iowa. From 2005 to 2009, Mr. Lippincott served as the Treasurer and a member of the board of directors of the Gladiator Soccer Club, an Omaha soccer program serving 1500 youths. He currently serves as the Treasurer and a member of the board of directors of the Gladiator Soccer Foundation, an organization designed to promote youth soccer in Omaha.

Kristina L. Castle, Vice-President, Rockbrook Advisors

Kristina L. Castle is the Vice-President of Rockbrook Advisors, LLC, which will manage Brookside III. Ms. Castle also has extensive operating experience in the insurance industry.

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Mrs. Castle joined Rockbrook Advisors in April 2007. Prior to joining Rockbrook Advisors, Mrs. Castle was with Aspen Holdings for 10 years. She was most recently Assistant Treasurer and Director of Finance for Aspen. During her tenure with Aspen, Kris’ corporate development responsibilities included evaluating several acquisition opportunities for the company as well as organizing, forming and capitalizing Banyan Re, LLC, an offshore captive reinsurer domiciled in Bermuda. Mrs. Castle was also integral to the formation and licensing of FirstComp Underwriters Group, Aspen’s managing general agency.

Mrs. Castle graduated from the University of Nebraska at Omaha with a Master’s in Business Administration degree and earned a Bachelor of Science in Business Administration degree with an emphasis in Finance and Accounting from Creighton University in Omaha, Nebraska, graduating Summa Cum Laude.

Accessing Additional Operating Experience

A critical element of Brookside’s investment strategy is to invest in or acquire a business if the Manager can add value from a strategic and operating perspective. The strategy is to focus on industries in which the Manager has transferable operating experience. In addition to the Principals, the Manager expects to access other experienced personnel, allowing Brookside III the flexibility to consider opportunistic investments in different financial services industries.

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PRINCIPAL TERMS OF THE COMPANY

The following information is presented as a summary of certain key terms only and is qualified by reference to the more detailed discussion of “Certain Investment Considerations”, below, and to the operating agreement of the Company (the “Operating Agreement”).

INVESTMENT AND OPERATING AGREEMENT MATTERS

Objective of Company

The primary objective of the Company will be to generate long-term capital appreciation by making equity and debt investments in companies in the insurance and financial services industries (“Portfolio Companies”). The Company will seek to acquire equity securities consisting of common stock or units and/or preferred stock with warrants or conversion rights. It is expected that debt securities acquired by the Company will generally consist of subordinated debt with warrants or conversion rights. The Company may also offer Bridge Financing which may or may not be convertible into equity of a Portfolio Company.

Capital Commitments

Up to $5.0 Million of Commitments for the Units, with a target range of $2.5 to $3.0 Million. The minimum Commitment will be $50,000. However, the Manager reserves the right to reduce the minimum capital commitment for select investors. Investors will become members of the Company (the “Members”). A Commitment constitutes the Member's obligation to provide funds to the Company for investment use.

Investors who subscribe for the Securities under this Offering shall be required to fund a portion of the subscribed amounts at the Closing. On the date of the Closing, each Member subscribing to the Units shall make an initial Capital Contribution from such Member's Commitment sufficient to fund its pro rata share of the Company’s $1.0 million Investment in Asterisk Financial Group, Inc. completed on January 10, 2012. The Investment in Asterisk was funded with a $1.0 million Commitment from the Company’s Initial Member, Brookside II. Thereafter, as of the Closing, the Commitments of other Members shall be drawn sufficient to allow for a pro-rata investment by all Members in relation to this initial investment by the Company, and accordingly, a portion of such funds shall be distributed to the Initial Member, to result in a pro-rata investment in the Company among all Members.

Thereafter the commitment to provide funds for Portfolio Company investments will expire at the fifth anniversary of the Closing; provided, the Manager will have the option in its sole discretion to extend this date by up to one year (the “Commitment Period”).

At the end of the Commitment Period, the Members will have no further obligation to provide funds except to (i) cover any Management Fees and any Extraordinary Expenses; (ii) complete investments by the Company in transactions that are in process as of the end of the Commitment Period; (iii) fund follow-on investments in existing Portfolio Companies; and (iv) fund any amounts due pursuant to clawback obligations. The Manager may reserve out of the unfunded Commitments an estimate of the foregoing amounts through the end of the Term.

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Key Dates CLOSING - March 31, 2012, provided that commitments of at least $2.5 million ("Minimum Requirement") have been obtained.

COMMITMENT PERIOD - a period which ends on the date five years from the Closing. The Manager has the sole discretion to extend the Commitment Period for one (1) year.

TERM OF COMPANY - ten years from the Final Closing, with the Manager having the sole discretion to extend the term for no more than two (2) additional one-year periods.

Management of Company

The Manager will manage the Company and its investment activities. The Manager will use its experience and resources to identify businesses which present attractive opportunities for investment by the Company. The Manager will be responsible for identifying, investigating, structuring, and negotiating potential investments, monitoring the performance of Portfolio Companies, and handling the sale or liquidity event of each investment. It is anticipated that the Principals, and persons to be designated by the Manager, may serve as members of the boards of directors of each Portfolio Company, and may provide other services to Portfolio Companies.

Management Fee

The Company will pay an annual management fee equal to 2% of the total Commitments (the “Management Fee”) to cover substantially all operating expenses of the Company, other than any Extraordinary Expenses. [In addition, the Manager will receive a Profit Share of 20%. “Profit Share” means the share of proceeds, 20% to the Manager and 80% to the Members, from Portfolio Company Investment that has been fully or partially liquidated and after distributions have first been made to the Members for their capital contributions pursuant to their Commitments and for reimbursement of their proportional share of all Management Fees, Organizational Expenses and Extraordinary Expenses, if any.

Organizational Expenses

Each Member will be responsible (in addition to its Commitments) for its pro-rata share of the expenses incurred prior to the Closing in connection with organizing (including legal and accounting fees), marketing and managing the business of the Company (the “Organizational Expenses”). These expenses are currently estimated at $12,500.00 in the aggregate.

Extraordinary Expenses

Each Member will be responsible (in addition to its Commitment) for its pro-rata share of expenses incurred outside the ordinary course of business, including without limitation, expenses relating to litigation and governmental investigations, but in all events not to exceed the amount of a Member's unfunded Commitment and returned Capital Contributions.

Limitation on Member Liability

Members of the Company shall be responsible for Management Fees, any Extraordinary Expenses and other Organizational Expenses. Management Fees shall be in addition to a Member's Commitment. Organizational Fees shall be separately billed to Members.

In the event the Company incurs any Extraordinary Expense at anytime, or if during the period ending on the fifth anniversary of the final distribution made by the Company to the Members, the Company incurs any liability for which it has insufficient funds to pay (after calling any unpaid Commitments), each Member will contribute to the Company its pro rata share of such liability. Notwithstanding the foregoing, except as expressly agreed, no Member shall be liable for any payment that exceeds the amount of a Member's unfunded Commitment and returned Capital

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Contributions.

Distributions The Manager will distribute the net proceeds attributable to the full or partial liquidation or disposition of investments in Portfolio Companies, subject to the Manager's retention of amounts it considers reasonable and appropriate as reserves. Distributions will be made in the following order of priority:

(a) First, 100% pro rata to the Members up to the amount of their total capital contributions (including Management Fees);

(b) Second, 100% pro rata to the Members until they have received an amount equal to all Organizational Expenses and any Extraordinary Expenses; and

(c) Third, a Profit Share of 20% to the Manager and 80% to the Members.

Clawback After the final distribution of the Company’s assets, certain funds are subject to return by Members (the "Clawback"), in the following amounts and circumstances:

(a) if the Company incurs a loss in excess of its remaining assets or is unable to discharge the Company’s debts and liabilities from ordinary operations with its remaining assets;

(b) if the Members receive disproportionate distributions of the profit distributions; and

(c) if the Company incurs Extraordinary Expenses for which it has insufficient funds to pay such liability. Notwithstanding the foregoing, no Member shall be liable for any of such Clawback payments to the extent such payment exceeds the amount of a Member's unfunded Commitment and returned Capital Contributions.

Withdrawal and Transfer

Members may not withdraw from the Company, except that a Member subject to ERISA will be permitted to withdraw from the Company and receive a distribution in connection therewith in order to avoid a violation of, or the breach of a fiduciary duty under, ERISA. In addition, Members may not transfer any of their interests, rights, or obligations under the Operating Agreement except with the written consent of the Manager.

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Defaulting Members

Any Member that fails to contribute the full amount specified in a Funding Notice within five business days of the specified due date or any other payment required to be made by it to the Manager or Company may be deemed a defaulting member (a “Defaulting Member”) at the discretion of the Manager. The Manager in its sole discretion may waive or permit the cure of the condition causing such default. Among other provisions, a Defaulting Member: (i) may be subject to forfeitures of distributions and may be subject to a 25% reduction in the balance of its capital account; and (ii) may also be required to sell its interest in the Company to the other Members or to a third party at its cost or another price determined to be fair and reasonable under the circumstances by the Manager in its sole discretion.

Amendment

No material provision of the Operating Agreement shall be amended, modified, or waived without consent of Members whose Commitments, collectively, exceed 50% of the aggregate Commitments of the Members entitled to vote with respect to such matter (a “Majority-in-Interest”). All non-material provisions may be amended, modified, or waived by the consent of the Manager. When in doubt, the materiality of any provision subject to amendment, modification, or waiver shall be determined by a Majority-in-Interest.

OTHER MATTERS:

Co-Investment

When the Manager deems it appropriate and consistent with the interests of the Company, it may provide the Members with co-investment opportunities. However, there is no obligation for the Manager or the Company to undertake such co-investment with Members, and Members should anticipate their sole return in relation to the Company shall be limited to their Interests.

Key Third Parties

The Manager may also provide co-investment opportunities to key third parties (other than the Members), whom the Manager believes can contribute to the successful completion of an investment by the Company in a Portfolio Company or enhance the future value of the investment. Such persons might be finders, executives, outside directors, private equity funds, or other persons, and the form of co-investment by these persons may be by means of direct investment in the Portfolio Company, creation of a new entity to invest in the Portfolio Company, participation in the Manager’s Profit Share, or a grant of carried interests, options, warrants, or other rights.

Incurrence of Indebtedness

The Company may not incur any indebtedness other than (i) short-term borrowings to fund Members’ Capital Contributions on an expedited basis (if a Member’s Capital Contributions are “bridged” by such short-term borrowings, the Members whose Capital Contributions were so “bridged” shall be responsible for the costs of such borrowings); or (ii) to pay Management Fees or any Extraordinary Expenses pursuant to a line of credit.

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Profit Share Tax Matter

The federal income tax treatment of the Manager's Profit Share is subject to change by Congress prior to the expiration of the term of the Company. It is currently contemplated that the Manager's Profit Share will be accorded capital gains tax treatment (either long or short term, as the case may be) and that the payment of such Profit Share by the Company shall not be treated as deductible for income tax purposes. In the event the federal income tax treatment shall be changed prior to expiration of the term of the Company such that the taxation of the Manager's Profit Share shall be materially modified, the adjustment set forth in this Section shall be implemented. The purpose of the adjustment is to minimize the economic impact of any tax changes upon the Members and the Manager and, as nearly as practicable, place the Members and the Manager in the equivalent economic position each would have realized absent such tax change. Accordingly, in such instance, the amount and timing of the Manager's Profit Share shall be changed to account for the benefits and burdens to the Members and the Manager resulting from such tax change, including without limitation, the benefit to the Members if such Profit Share shall become tax deductible and the burden to the Manager if such Profit Share shall be accorded compensation or other ordinary income tax treatment. Such adjustment may be made in connection with each determination of the Manager's Profit Share and may operate to increase the amount(s) payable as the Manager's Profit Share. The adjustment shall be calculated by the certified public accountant responsible for the Company's tax reporting and compliance from time to time. A Schedule setting forth such calculation shall be provided to the Members upon each event which results in a determination of the Manager's Profit Share. If any calculation results in an increase of more than 15% in any payment of a Manager's Profit Share, upon a vote by the Majority in Interest of the Members such calculation shall be subject to review and revision by an independent tax professional (mutually agreeable to the Members and the Manager) at the Company's expense. The calculation of the adjustment shall be final and conclusive if (a) the calculation results in an increase in the Manager's Profit Share equal to or less than 15%, or (b) upon calculation by the aforementioned independent tax professional.

Financial, Tax and Other Information

Members in the Company will receive: (i) semi-annual updates which will provide summaries of the current investments, recent activities and prospective investments. The update will also include the Member’s capital status, with information on Capital Contributions to date as well as the amount of the Commitment remaining; and (ii) annual tax information necessary for completion of each Member’s tax returns. The fiscal year-end of the Company will be December 31. The Manager will be available to Members throughout the year.

Conflicts of Interest, Other Activities

The Manager will not participate as an investor in any acquisition or recapitalization of a nature substantially similar to those of the Company except through the Company or as a passive investor in entities in which the Manager or Principals does not own a controlling interest. Notwithstanding the above, the Principals may participate in and provide equity, or finance complementary acquisitions for existing businesses in which the Principals currently have ownership or management interests. In addition, nothing shall restrict the right of Manager from performing or carrying out its existing obligations in relation to the Brookside I and/or Brookside II funds. Without the consent of a Majority-in-Interest of the Members, the Company will not acquire investments from, nor sell investments to, any entity in which the Principals hold a material investment or is in a position of control. The Principals, the Manager, its members, officers, managers, and affiliates, may engage independently or with others, for their own

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accounts and for the accounts of others, in other business ventures and activities of every nature and description, even if those ventures are competitive with the business of the Company. The Manager will devote such time as is reasonably necessary to evaluate prospective investments, oversee the Company’s portfolio, and manage the Company’s affairs.

Tax Considerations

Under current tax laws the Company will be treated as a partnership for U.S. federal income tax purposes. Accordingly, each Member will be allocated its allocable share of Company items of income, gain, loss, deduction, and credit. The Manager intends to operate the Company in a manner such that it will not be engaged in a trade or business for U.S. tax purposes. Further, the Company generally will use its best efforts to avoid generating income or allocating income in a manner that would cause an ERISA or other investor exempt from tax in the United States to recognize “unrelated business taxable income” or “unrelated debt-financed income” for U.S. tax purposes.

Risk Factors

An investment in the Company involves significant risk and should only be considered by sophisticated investors able to meet their Commitment obligations and assume the risks of loss and lack of liquidity inherent in holding an investment in the Company. Investors should be able to bear a complete loss of all amounts invested in the Company.

Indemnification

The Company will indemnify the Manager, and its managers, members, employees, controlling persons, agents, affiliates, including the Principals, against claims, liabilities, costs, and expenses (including legal fees, judgments, and amounts paid in settlement) as incurred, in connection with their activities on behalf of, or their association with, the Company except for acts or omissions constituting gross negligence or willful misconduct.

Legal Counsel

McGill, Gotsdiner, Workman & Lepp, P.C., L.L.O., will represent the Manager and the Company but will not represent any prospective investor or Member in connection with the organization of Brookside III or preparation of the Operating Agreement.

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SECURITIES OFFERED

THE FOLLOWING SUMMARIZES CERTAIN MATTERS RELATIVE TO THE UNITS OF MEMBERSHIP INTEREST IN THE COMPANY WHICH ARE BEING OFFERED IN CONNECTION WITH THIS OFFERING:

TERMS APPLICATION TO UNITS

Commitments The Company is offering 30,000 Units at a rate of $100.00 per Unit, for an aggregate offering amount of $3.0 million. This Offering will require a minimum subscription for Commitments of $2.5 million. While the Offering is presently limited to $3.0 million, the Manager in its sole discretion shall have the right, exercisable prior to the Termination Date, to offer an additional 20,000 Units, for the additional aggregate offering amount of $2.0 million, bringing the total number of Units offered to 50,000 and the total amount potentially available under this Offering to $5.0 million.

Dividends The Units do not carry any predetermined or accruing dividends. Dividends will be paid only as and when declared, if at all, by the Manager of the Company, in accordance with limitations imposed by law.

Expense Obligations

Members holding Units shall be responsible to reimburse the Company with respect to Management Fees, Organizational Expenses, and Extraordinary Expenses, if any, of the Company.

Voting Rights Members holding Units will vote based upon the total number of Units outstanding on those matters for which Member approval is required.

Liquidation Rights No Member will be entitled to demand a liquidation of that Member's Interest in the Company. Upon winding up of the operations of the Company, assets of the Company will be liquidated and net proceeds distributed to Members based on their respective Interests.

Preemptive Rights The Units do not have any preemptive rights.

Conversion Rights The Units are not convertible into any other form of equity or interest in the Company.

Sinking Fund No sinking fund shall be established with regard to any future redemption or distribution in relation to the Units. Distributions made with respect to the Units shall be based solely on the results of investments made by the Company and paid in accordance with the Operating Agreement upon liquidation of an investment in a Portfolio Company.

Liability for Future Calls

Members are liable for the full amount of their subscriptions, which will be called over the term of the Commitment Period. In general, once the full amount of the subscription has been called and paid, Members have no further liability to the Company, except for: (i) Management Fees; (ii) Extraordinary Expenses; (iii) transactions in process at the end of the Commitment Period or for follow on Investments in existing Portfolio Companies; and (iv) return of distributions made in excess of profit share.

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HIGH RISK FACTORS

AN INVESTMENT IN THE COMPANY IS SUBJECT TO ALL OF THE RISKS NORMALLY ASSOCIATED WITH AN INVESTMENT IN A START-UP PRIVATE INVESTMENT FUND GENERALLY. INVESTMENT IS SPECULATIVE AND IN ADDITION TO THE FACTORS SET FORTH ELSEWHERE IN THIS MEMORANDUM, PROSPECTIVE INVESTORS ARE ADVISED AND URGED TO CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS:

Market and Investment Risks

Newly-Formed Entity; Market Risks. The Company is a newly formed entity with no operating history. The Company will generally determine the appropriate capital structure of each company in which the Company invests based upon financial projections for that company. Projected operating results for Portfolio Companies will normally be based primarily on management judgments. In all cases, projections are only estimates of future results based upon assumptions made at the time the projections are developed. There can be no assurance that the projected results will be obtained, and actual results may vary significantly from the projections. General economic conditions, which are not predictable, can have a material adverse impact on the accuracy of projections. On any given investment, total loss of invested capital is possible. There is no assurance that the Company’s investments will achieve results similar to those attained by previous investments of the Principals or Manager.

Limited Number of Investments. The Company will participate in a limited number of investments, currently estimated to be no more than three (3) Portfolio Companies, and, as a consequence, the aggregate return of the Company may be substantially affected by the performance of a single investment. Furthermore, to the extent that the capital raised is less than the targeted amount, the Company may invest in fewer Portfolio Companies, thus becoming even less diversified. An investment in the Company is suitable only for an investor that does not need liquidity in the investment, can accept volatility in the investment and can sustain the total loss of the investment in the Company.

Risk of Private Equity Investments. While private equity investments offer the opportunity for significant gains, such investments also involve a high degree of business and financial risk and can result in substantial losses. Among these risks are the general risks associated with investing in companies at an early stage of development or with little or no operating history, companies operating at a loss or with substantial variations in operating results from period to period, and companies with the need for substantial additional capital to support expansion or to achieve or maintain a competitive position. Such companies may face intense competition, including competition from companies with greater financial resources, more extensive development, manufacturing, marketing, and service capabilities, and a larger number of qualified managerial and technical personnel. The Company is expressly targeting early stage companies with regard to its investments, and as such the risks associated with these early stage entities and their businesses increase the risk with regard to

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investment in the Company and the ability of any Investor to receive a return on investment and potentially return of an Investor's invested funds with the Company.

Illiquid and Long-Term Investments; Limited Cash Flow. An investment in the Company requires a long-term commitment, with no certainty of return. There most likely will be little or no near-term cash flow available to Members. The Company’s investments will be highly illiquid, and there can be no assurance that the Company will be able to realize on such investments in a timely manner, if at all. Distributions in-kind of illiquid securities to the Members may be made. Although certain investments by the Company may generate current income available for distribution to Members, the return of capital and the realization of gains, if any, from an investment generally will occur only upon the partial or complete disposition of such investment. While an investment may be sold at any time, this will typically occur five to seven years after the investment is made. Furthermore, the expenses of operating the Company may exceed its current income, thereby requiring that the difference be paid from the Company’s capital.

General Economic Conditions. General economic conditions may affect the Company’s activities. Interest rates, general levels of economic activity, the price of securities, and the participation by other investors in the financial markets may affect the value of the Company’s investments or companies considered for prospective investment.

Changes in Environment. The Company will have the exclusive right and authority within limitations set forth in the Operating Agreement to determine the manner in which the Company shall respond to various changes in its industry, including regulatory modifications that impact the business of the Company, and Members generally will have no right to withdraw from the Company or to demand specific modification to the Company’s operations as a result thereof. The Company's investment program is intended to extend over a period of years, during which the business, economic, political, regulatory, and technological environment within which the Company operates may undergo substantial changes, some of which may be adverse to the Company.

Portfolio Company Risks

Need for Follow-On Investments. Following its initial investment in a given Portfolio Company, the Company may decide to provide additional funds to such Portfolio Company or may have the opportunity to increase its investment in a successful Portfolio Company. There is no assurance that the Company will make follow-on investments or that the Company will have sufficient funds to make all or any of such investments. Any decision by the Company not to make follow-on investments or its inability to make such investments may have a substantial negative impact on a Portfolio Company in need of such an investment or may result in a lost opportunity for the Company to increase its participation in a successful operation.

Reserves. The Manager may set aside reserves, either out of available cash or available Commitments, it considers reasonable and appropriate to meet anticipated expenses, liabilities, obligations, and commitments of the Company. Estimating the amount necessary for such reserves is difficult especially for follow-on investment opportunities, because follow-on investment opportunities are directly tied to the success

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and capital needs of Portfolio Companies. Inadequate or excessive reserves could have a material adverse effect upon the investment returns to the Members.

Leverage; Junior Interests. The Company will invest in companies whose capital structures may be highly leveraged. The securities in which the Company will invest may be among the most junior in a Portfolio Company’s capital structure, and thus subject to the greatest risk of loss. Further, certain rights, privileges and powers of the securities acquired by the Company may be subordinated to the interests of Portfolio Companies' lenders.

Risks Upon Disposition of Investments. In connection with the disposition of an investment in a Portfolio Company, the Company may be required to make representations about the business and financial affairs of the Portfolio Company typical of those made in connection with the sale of any business, or may be responsible for the contents of disclosure documents under applicable securities laws. The Company may also be required to indemnify the purchasers of such investment or underwriters to the extent that any such representations or disclosure documents turn out to be incorrect, inaccurate, or misleading. These arrangements may result in contingent liabilities, which might ultimately have to be funded by the Members.

Distributions in Kind. The Company may distribute Portfolio Company securities to the Members. Such securities may be subject to a variety of legal or practical limitations on sale. In particular, immediately following a distribution of such securities, trading volume may be insufficient to support sales by the Members without such sales triggering a price decline which makes it difficult or impossible for all Members to sell such securities at the distribution price.

Personal Financial Disclosure. If the Company chooses to make an investment in an insurance risk bearing entity, the Investors may be subject to disclosure requirements by various insurance regulatory authorities.

Company Risks

Availability of Suitable Investment Opportunities. It is possible that the Company will never be fully invested if enough sufficiently attractive investments are not identified. The business of identifying and structuring investments is highly competitive and involves a high degree of uncertainty.

Competition. The Company will be competing with individuals, corporations, and others engaged in investment activities, many of which have been in business for a significant period of time and have greater management and financial resources than the Company. This may make it more difficult for the Company to obtain a sufficient number of investments on satisfactory terms. Other entities with a focus similar to that of the Company might also emerge at any time. There can be no assurance that the Company will be able to locate and consummate investments that satisfy the Company’s objectives or realize upon their values or that the Company will be able to invest fully the Company’s committed capital.

Penalties Upon Default. A Member’s failure to fund its Commitment in accordance with the Operating Agreement may result in a reduction of such Member’s

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interest in the Company and may preclude such Member from investing further in the Company.

Profits Not Shared in Proportion to Contributed Capital. After various payments and reimbursements, the profits of the Company shall be distributed. The Manager is not directly investing any funds in this Offering or the Company, but will be entitled to a potential Profit Share equal to 20% of the total Profit Share. Investors will invest agreed amounts and due in part to the profit sharing arrangement, may receive a proportionately smaller amount of any profits of the Company than the Manager.

Indemnification. The Principals, the Manager, and their respective members and employees will be entitled to indemnification from the Company, except in certain circumstances. The assets of the Company will be available to satisfy these indemnification obligations and the Members may be required to return distributions to satisfy such obligations. Such obligations will survive the dissolution of the Company.

Reliance on Manager. The Members will not participate in the management of the Company or make any decision with regard to investments made by the Company. The Manager will make decisions with respect to the management of the Company, which is in turn controlled by the Principals. The success of the Company is dependent upon the Manager to identify, consummate, and manage suitable investments. Additionally, to the extent that Manager does not have primary responsibility for the Portfolio Company operations on a day-to-day basis, the performance of the Portfolio Company will be dependent on the management team selected by the Portfolio Company. There is no assurance that the Company’s investments will achieve results similar to those attained by previous investments of the Principals and Manager. The loss of the service of the Manager or the Principals could have an adverse impact on the Company’s ability to realize its investment objectives, and such loss could occur at any time due to death, disability or other reasons. Members will have no opportunity to control the day-to-day investment and disposition decisions of the Company.

Diverse Member Group. The Members may have conflicting investment, tax, and other interests with respect to their investments in the Company. The conflicting interests of individual Members may relate to or arise from, among other things, the nature of investments made by the Company, the structuring or the acquisition of investments, and the timing of disposition of investments. In structuring the Company’s investments, the Manager will consider the tax, legal, and other objectives of the Company as an entity and not the individual objectives of any Member.

Risk Arising From Provision of Managerial Assistance. The Company will use its reasonable best efforts to structure its investments so that it will obtain rights to participate substantially in and to influence substantially the conduct of the management of the Portfolio Companies. The designation of representatives and other measures contemplated could include claims that the Company is a controlling person and thus is liable for securities laws violations of a Portfolio Company. These measures also could result in certain liabilities in the event of the bankruptcy or reorganization of a Portfolio Company; could result in claims against the Company if the designated directors violate their fiduciary or other duties to a Portfolio Company or fail to exercise appropriate levels of care under applicable corporate or securities laws, environmental laws, or other legal principles; and could expose the Company to claims that it has interfered in management to the detriment of a Portfolio Company. While the Manager intends to

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manage the Company in a way that will minimize the exposure to these risks, the possibility of successful claims cannot be precluded, and may expose the assets of the Company to claims by a Portfolio Company, its securities holders, and its creditors.

No Market for Interests; Restrictions on Transferability; No Withdrawal Rights. Interests in the Company will not be readily marketable, are not redeemable, and are not transferable except with the consent of the Manager, which may be withheld at the sole discretion of the Manager. In general, Members may not withdraw from the Company. There will be no public market for the interests in the Company, and none is expected to develop. The Interests have not been registered under the Securities Act or the securities laws of any state or other jurisdiction, and cannot be resold unless they are subsequently registered under the Securities Act and applicable securities laws or an exemption from registration are available. It is not contemplated that the Interests will be registered under the Securities Act or other securities laws.

Potential Conflicts. The Manager and the Principals may, from time to time, be presented with opportunities that fall within the investment objectives of the Company and (i) in which the Company may not be able to invest due to legal, regulatory, contractual, or other restrictions applicable to the Company or (ii) in which the Manager would cause the Company not to invest because it might require the Company or another Company entity to divest of some of its assets. In certain instances, these conflicts may have an adverse effect on the Company and its ability to achieve its investment objectives.

Legal Risks

Litigation Risks. Brookside III may be subject to a variety of litigation risks, particularly in consequence of one or more Portfolio Companies facing financial or other difficulties during Brookside III’s term. Brookside III may also participate in Portfolio Company financings at implicit Portfolio Company valuations lower than the valuations implicit in the previous rounds of financing. In the event of a dispute arising from any of the foregoing activities or other activities relating to the operation of Brookside III or the Manager, it is possible that the Principals, Brookside III, the Manager or their respective members, officers and/or employees, if any, may be named as defendants. Under most circumstances, Brookside III will indemnify the Principals, the Manager and their members, officers and employees for any costs they may incur in connection with such disputes. Beyond direct costs, such disputes may adversely affect Brookside III in a variety of ways, including the distraction of the Manager and Principals and harming relationships between Brookside III and its Portfolio Companies or other investors in such Portfolio Companies.

Liability of Members. The Company has been organized as a Delaware limited liability company. A Member will not be personally liable for the debts of the Company except as provided in the Operating Agreement and except that, in the event that the Company is otherwise unable to meet its obligations, each Member may, under Delaware law, be obligated to repay amounts previously received by such Member to the extent that such amounts are deemed to have been wrongfully distributed to such Member. The Delaware Limited Liability Company Act (the “Delaware Act”) provides that if a member of a Delaware limited liability company knowingly receives a distribution from a limited liability company in violation of such statutes, such member is liable to the limited liability company for the amount of the distribution. The liability of a member

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continues for three years after the date of the distribution unless an action to recover the distribution from such member is commenced prior to the expiration of the said three-year period and an adjudication of liability against such member is made in said action. A distribution would violate the Delaware Act to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited liability company, other than liabilities to members on account of their limited liability company interests and liabilities for which the recourse of creditors is limited to specified property of the limited liability company, exceed the fair value of the assets of the limited liability company, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited liability company only to the extent that the fair value of that property exceeds that liability.

Limitation on Member Liability. Each Member will be responsible for making timely contributions in respect of its Commitment and for returning distributions received in violation of the Operating Agreement or applicable law. Except as provided in the preceding sentence, a Member will have no liability for any amounts exceeding its Commitment, including, but not limited to, amounts relating to the Company’s debts or obligations.

Fiduciary Obligations. Corporate law dictates that board members have a fiduciary responsibility to all shareholders of the Company and not just the shareholders that the individual director represents. As the Company may be deemed to control Portfolio Companies, and as directors of Portfolio Companies may be nominated and elected by the Company, the Company may be deemed a fiduciary with respect to such Portfolio Companies and their shareholders as a whole, and therefore, the Company’s ability to act solely in its own interest, with respect to such Portfolio Companies, may be limited.

Changes in Applicable Law and Regulations. The Company must comply with various legal requirements, including requirements imposed by the federal and state securities laws, tax laws, and pension laws. Should any of those laws change over the term of the Company, the legal requirements to which the Company and the Members may be subject could differ materially from current requirements. The Company expects to make investments in the insurance and financial services industries, which are regulated and may become subject to further regulation by one or more U.S. federal agencies and by various agencies of the states, localities, and counties in which they operate. New and existing regulations, changing regulatory schemes, and the burdens of regulatory compliance all may have a material negative impact on the performance of Portfolio Companies that operate in these industries. The Manager cannot predict whether new legislation or regulation governing those industries will be enacted by legislative bodies or governmental agencies, nor can it predict what effect such legislation or regulation might have. There can be no assurance that new legislation or regulation, including changes to existing laws and regulations, will not have a material negative impact on the Company’s investment performance.

Legal Counsel. The Company’s, and the Manager’s legal counsel, McGill, Gotsdiner, Workman & Lepp, P.C., L.L.O., will not represent the interests of the Members. Each prospective investor is urged to consult with its own legal counsel before investing in the Company. In advising as to matters of law (including matters of law described in this Memorandum), McGill, Gotsdiner, Workman & Lepp, P.C., L.L.O., has relied, and will rely, upon representations of fact made by the Manager in this

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Memorandum and other documents. Such advice may be inaccurate or incomplete, and legal counsel generally will not undertake independent investigation with regard to such representations.

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INVESTOR CRITERIA

In order to invest in the Company and become a Member, an investor must be able to make a number of representation and warranties to the Company and the Manager, as set forth more particularly in the Subscription Agreement accompanying this Memorandum. Such representations, include, but are not limited to the following:

(a) The investor is an “accredited investor” within the meaning of Regulation D promulgated under the Act.

(b) The investor is purchasing the Interests for the investor’s own account and not with a view to their resale or distribution. The investor has no contract, undertaking, arrangement, or agreement with any person to sell or transfer or to have any person sell for the investor all or any portion of the Interests. The investor has no present obligation, indebtedness, or commitment, nor is any circumstance in existence which will compel the investor to secure funds by the sale of any of the Interests, nor is the investor a party to any plan or undertaking which would require or contemplate that proceeds from the sale of all or part of the Interests be utilized in connection therewith, and the investor does not now have any reason to anticipate any change in circumstance or other particular occasion or event which would cause the investor to transfer Interests. The investor does not intend or anticipate that the investor will rely on this investment as a principal source of income.

(c) The investor has such knowledge and experience in financial and business matters, including knowledge and experience in investing in private investment companies such as Brookside III, that the investor is capable of evaluating the merits and risks of an investment in Brookside III.

(d) The investor has received and read and is familiar with the offering documents, including any amendments thereto, and confirms that, if requested, all documents, records, and books pertaining to Brookside III have been made available for review by the investor.

(e) The investor has had an opportunity to ask questions of and receive answers from representatives of the Manager concerning Brookside III, and the terms and conditions relating to an investment in Brookside III, and all such questions have been answered to the investor’s full satisfaction.

(f) The investor has full right, power, and authority to execute the Subscription Agreement and the Operating Agreement, has duly and validly executed the Subscription Agreement, and has full right, power, and authority to perform the investor’s obligations hereunder and thereunder.

(g) The investor agrees to be bound by all of the terms and conditions of the Operating Agreement and to perform all obligations thereby imposed upon it.

(h) The investor is not an “investment company” within the meaning of the Investment Company Act, and does not rely on either of the exclusions set forth

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in Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act for such exemption.

(i) The investor, if a corporation, partnership, trust, limited liability company, or other legal entity, represents that the equity owners of the investor share in the profits and losses of all investments of the investor in the same way on the basis of their proportional ownership, and do not have non-pro rata interests in specified investments of the investor.

(j) The investor, if a pension plan, IRA, or other tax-exempt entity, is aware that it may be subject to Federal income tax on any unrelated business taxable income from its investment in Brookside III, and has consulted counsel to the extent it deems necessary concerning an investment in Brookside III and the appropriateness of such an investment under ERISA (if applicable), and the Internal Revenue Code of 1986, as amended (the “Code”), including with respect to an IRA the possible risk of loss of the IRA’s tax exempt status.

(k) The investor understands that additional Interests may be offered or sold by Brookside III, and Members may be required to make additional Commitments in accordance with the provisions set forth in the Operating Agreement following the Closing in such amounts and at such times as the Manager may determine from time to time.

In addition, the investor acknowledges that the investor is aware that there are substantial restrictions on the transferability of the Interests. The Interests will not be, and the investor has no right to require that they be, registered under the Securities Act. The investor agrees that the Interests may not be sold in the absence of registration unless such sale is exempt from registration under the Securities Act and acknowledges that the investor shall be responsible for compliance with all conditions on transfer imposed by any securities authority and for any expenses incurred by Brookside III for legal or accounting services in connection with reviewing such a proposed transfer or issuing opinions in connection therewith. The investor also acknowledges that the Operating Agreement also contains various restrictions on transferring Interests.

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LEGAL AND TAX MATTERS

ERISA Considerations

Each Member is urged to consult with its own legal counsel regarding ERISA matters. Those investors proposing to invest in the Company on behalf of an employee benefit plan should consider the effect of the provisions of ERISA, on their proposed investment, including the possible impact of ERISA’s fiduciary responsibility and prohibited transaction rules.

Employee benefit plans covered by Title I of ERISA (“ERISA Plans”) are not barred from investment in any specific type of investment. Instead, ERISA requires, among other things, that a plan fiduciary invest plan assets prudently and in accordance with plan documents, and diversify the plan’s investments. Therefore, a fiduciary of an ERISA Plan must determine whether an investment in the Company is appropriate for that particular ERISA Plan in view of its overall investment policy, the composition and diversification of its portfolio, its anticipated liquidity needs (particularly in light of the limited marketability of the investment), whether such an investment is permissible under the terms of the ERISA Plan and related trust agreement, and whether the investment is made in accordance with such documents. In considering an investment in the Company of a portion of the assets of an ERISA Plan, a fiduciary should specifically consider; (a) whether the investment satisfies the diversification requirements of section 404(a)(1)(C) of ERISA; (b) whether the investment is prudent, since there may not be a market in which the ERISA Plan can sell or otherwise dispose of the investment; (c) whether the investment is made solely in the interest of the ERISA Plan participants; (d) whether the investment complies with the ERISA Plan’s need for liquidity; and (e) whether the investment would constitute a transaction prohibited under section 406 of ERISA.

A fiduciary of an employee benefit plan (including an ERISA Plan) may not cause the plan to engage in certain types of dealings with persons, termed “parties-in-interest” or “disqualified persons,” who have existing relationships to the plan. In this regard, any relationship between the plan and the Manager (or its affiliates) should be considered. In addition, a fiduciary of an employee benefit plan may not deal with the plan’s assets in his own interest, represent a person whose interests are adverse to the plan’s in a transaction involving plan assets or receive any consideration from a third party in connection with a transaction involving plan assets.

The U.S. Department of Labor (“DOL”) has issued regulations under ERISA, which provide, generally, that when an ERISA Plan invests in an entity such as the Company, the plan’s assets include both the membership interest and an undivided interest in each of the underlying assets of the Company, unless: (i) the equity participation in the Company by benefit plan investors is not “significant” (defined as 25% of any class of the Company equity interests); (ii) the Company complies with the “venture capital operating company” exception set forth in the regulations; or (iii) the Company qualifies for another exception under the DOL plan asset regulations. If the underlying assets of the Company were to be considered plan assets of the ERISA Plan investor, the Manager of the Company would be an ERISA fiduciary and the Company would be subject to undesirable ERISA requirements with which the Company generally will not be able to comply. The Manager intends to limit the aggregate ownership interests held by Members subject to ERISA to less than 25%.

Prospective Members, which are subject to ERISA, should consult with their counsel and advisors as to the provisions of ERISA applicable to an investment in the Company. In addition,

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prospective Members which are employee benefit plans should consider the effect federal income taxes will have on an investment in the Company. See “United States Tax Status.”

United States Tax Status

The Company will not pay United States federal income taxes, but each Member will be required to report its allocable share (whether or not distributed) of the income, gains, losses, deductions, and credits of the Company (which may include the income and other tax items of Portfolio Companies in which the Company invests). It is possible that the Members could incur income tax liabilities without receiving from the Company sufficient distributions to defray such tax liabilities. The Company’s taxable year will be the calendar year, or such other year as required by the Code.

Interest on any amount borrowed by a Member (other than a corporation) to purchase an Interest in the Company will generally be “investment interest,” subject to a limitation on deductibility. In general, investment interest will be deductible only to the extent of the taxpayer’s “net investment income.” For this purpose, net investment income will generally include net income from the Company and other income from the property held for investment (other than property, which generates passive business income). However, long-term capital gain is excluded from the definition of net investment income, unless the taxpayer makes a special election to treat such gain as ordinary income rather than long-term capital gain. Interest, which 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 there is sufficient investment income. Interest on any amount borrowed by a Member to make a Commitment to the Company which is allocable to a Portfolio Company which is a Company or limited liability company engaged in business will generally be treated as a passive business activity expense. As discussed below, certain categories of Members are subject to limitations on deducting losses from passive business activities.

The Operating Agreement has been drafted to conform substantially with IRS regulations describing Company allocations which will be treated as having “substantial economic effect,” and hence respected for tax purposes. However, those regulations are extremely complex and it is not certain that all the allocations of income, gain, deductions, and loss for tax purposes made pursuant to the Operating Agreement will be respected by the IRS if reviewed. Nevertheless, even if the IRS were to review the Company allocations and determine that they do not technically comply with the regulations, any modification proposed should have little effect because it would be determined in accordance with each Member’s Interest in the Company (determined by taking into account all facts and circumstances). The allocations under the Operating Agreement may in most cases be similar to allocations determined in accordance with each Member’s Interest in the Company.

Tax-exempt organizations generally are subject to U.S. federal income tax on a net basis on their unrelated business tax income (“UBTI”). In general, UBTI is the income of a tax-exempt organization from a trade or business that is regularly conducted by the organization (or by a “flow through” entity in which the tax-exempt organization is a member). The Company expects to invest in companies that are “flow through” entities for U.S. federal income tax purposes. If the Company makes such investments, the income of the “flow through” entity that is allocated by the Company to a tax-exempt organization may constitute UBTI.

UBTI generally does not include any dividend income, interest income, or capital gains recognized by a tax-exempt organization. The exclusion from UBTI for dividends, interest, and

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capital gains does not apply to income from “debt-financed property.” The Company does not intend to incur indebtedness to make its investments in companies. However, if the Company incurs acquisition indebtedness, the income from the Company may be income from debt-financed property and a portion of the income may be UBTI to a tax-exempt investor. In addition, if a tax-exempt investor borrows any amount to fund its Commitment, some or all of its distributive share of income from the Company may be UBTI. In addition to possibly requiring a tax-exempt investor to pay taxes, UBTI may adversely impact its tax-exempt status.

Any break-up fees or closing, monitoring, retainer, and/or consulting fees from Portfolio Companies will be paid directly to the Manager or an affiliate thereof, a portion of which will then, subject to the terms of the Operating Agreement, reduce future Company Expenses otherwise payable by the Company. A tax-exempt investor could be deemed to have received such portion of such fees and the tax-exempt investor’s share of such fees could be treated as UBTI.

Under Section 67 of the Code, non-corporate taxpayers may deduct certain miscellaneous expenses (e.g., investment advisory fees, tax preparation fees, unreimbursed employee expenses, subscriptions to professional journals, etc.) only to the extent such deductions exceed, in the aggregate, 2% of the taxpayer’s adjusted gross income. Each Member’s share of the Organizational Expenses and Company Expenses will be included among the miscellaneous expenses potentially subject to the 2% floor on deductions, except to the extent that the portion of the Organizational Expenses and Company Expenses may be treated as passive activity deductions described in the following paragraph. However, corporate Members and tax-exempt organizations are not affected by the 2% floor (unless, in the case of a tax-exempt organization, it is not a corporation and has unrelated business taxable income from the Company). Section 68 of the Code separately imposes limitations on the deductibility of itemized deductions by individuals whose adjusted gross income exceeds a specified amount, which may also affect the ability of any Member who is an individual to deduct his or her share of Organizational Expenses and Company Expenses.

Non-corporate investors (and certain closely held, personal service, and S corporations) are subject to the limitations on using losses from passive business activities to offset business income, salary income, and portfolio income (i.e. interest, dividends, capital gains from portfolio investments, royalties, etc.). The Company’s distributive share of income or losses from a Portfolio Company which is a company or limited liability company engaged in business, and the Company Expenses allocable to the Company’s investment in such a Portfolio Company, generally will be treated as passive activity income or losses. Accordingly, an investor will be subject to the passive activity loss limitation on the use of any such Portfolio Company losses and allocable Company Expenses, but any such Portfolio Company income may be offset by other passive losses (such as losses from Interests in tax shelters). Other Company income generally will be treated as portfolio income. Therefore, an investor generally will not be able to use passive activity losses to offset such portfolio income from the Company.

Certain U.S. Tax Considerations for Foreign Investors

The discussion of tax consequences arising in relation to an investment in the Securities is limited to the application of federal tax laws applicable to citizens of the U.S. It is beyond the scope of this Memorandum to consider or project the impact of U.S. federal income tax laws upon citizens of jurisdictions outside of the U.S. Investors who are not residents of the U.S. are therefore strongly urged to consults with their own tax advisors to consider the impact of U.S. tax laws upon their potential investment in the Company.

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Other Important Tax Disclosures

No assurance can be given that the IRS will concur with the discussion of tax treatment and tax consequences set forth above. No ruling has been, or will be, requested by the Company from the IRS as to such matters.

This memorandum does not address all of the United States federal income tax consequences to the Members of an investment in the Company, and does not address any of the state or local tax consequences of such an investment to any Member, or the United States or foreign tax consequences of such an investment to any Member that is not a United States person or entity. Each prospective investor is advised to consult its own tax counsel as to the United States federal income tax consequences of an investment in the Company and as to applicable state, local, and foreign taxes. Special considerations may apply to certain prospective investors, including, but not limited to prospective investors who are not United States persons or entities.

ALL TAX DISCUSSIONS SET FORTH IN THIS MEMORANDUM RELATE TO THE TAX LAWS CURRENTLY IN EFFECT. SUCH LAWS AND THE RELATED REGULATIONS THERETO ARE SUBJECT TO AMENDMENT, FROM TIME TO TIME, WHICH AMENDMENTS MAY DRAMATICALLY IMPACT UPON THE TREATMENTS TO INVESTORS. THEREFORE, INVESTORS ARE STRONGLY URGED TO CONSULT WITH THEIR OWN BUSINESS AND TAX ADVISORS WITH SPECIFIC REFERENCE TO THEIR OWN FINANCIAL SITUATIONS REGARDING THE POSSIBLE CONSEQUENCES OF AN INVESTMENT IN THE SECURITIES AS THEY AFFECT SUCH INVESTOR.

Investment Company and Investment Advisers Regulation

It is anticipated that the Company will not be required to register under the Investment Company Act. The Company will rely on the exemption contained in either Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. Section 3(c)(1) exempts issuers whose outstanding securities are beneficially owned by not more than 100 persons who meet the conditions with respect to beneficial ownership contained in Section 3(c)(1), while Section 3(c)(7) exempts issuers whose outstanding securities are owned exclusively by “qualified purchasers,” as defined under the Investment Company Act. The Company will obtain appropriate representations and undertakings from the investors in order to ensure that the conditions of the applicable exemption are met. The Manager does not intend to register as an investment adviser under the Investment Advisers Act of 1940, as amended, in reliance on Section 203(e)(3) thereof and Regulation 203(b)(3) promulgated thereunder.

United States Federal Securities Regulation

In connection with any acquisition or beneficial ownership by the Company of more than 5% of any class of the equity securities of a company registered under the Securities Exchange Act of 1934 (the “Exchange Act”), the Company may be required to make certain filings with the Securities and Exchange Commission. Generally, these filings require disclosure of the identity and background of the purchasers, the source and amount of funds used to acquire the securities, the purpose of the transaction, the purchaser’s interest in the securities, and any contracts, arrangements, or undertakings regarding the securities. In certain circumstances, the Company may be required to aggregate its investment position in a given Portfolio Company with the beneficial ownership of that company’s securities by or on behalf of the Manager and its affiliates. This could require the Company, together with such other parties, to make certain

37

disclosure filings or otherwise restrict the Company’s activities with respect to such Portfolio Company securities.

Insurance Regulation

If the Company chooses to make an investment in an insurance entity, the Investors may be subject to disclosure requirements by various insurance regulatory authorities.

Private Placement Status

As a purchaser of Interests in a private placement not registered under the Act, each investor will be required to make certain representations to the Company, including that it is acquiring such interests for investment and not with a view to resale or distribution, and that it is an accredited investor, as defined in Regulation D of the Securities Act. Further, each investor must be prepared to bear the economic risk of the investment for an indefinite period, since these interests cannot be sold unless they are subsequently registered under the Securities Act or an exemption from such registration is available. It is extremely unlikely that the Interests will ever be registered under the Securities Act.

Restrictions on Transfer

Interests will not be assignable or transferable without the prior written consent of the Manager. One of the requisites to such consent will be an opinion of the Company’s counsel (the cost of any such opinion will be borne by the transferor and transferee) that such a transfer would not subject the Company or the Manager to any regulatory or tax requirement or result in the violation of any applicable law or governmental regulation.

Compliance With Anti-Money Laundering Requirements

In response to increased regulatory concerns with respect to the sources of funds used in investments and other activities, the Company may request prospective and existing Members to provide additional documentation verifying, among other things, such Member’s identity and source of funds used to purchase its interest in the Company. The Manager may decline to accept a subscription if this information is not provided or on the basis of such information that is provided. Requests for documentation may be made at any time during which a Member holds an Interest in the Company. The Manager may be required to provide this information, or report the failure to comply with such requests, to governmental authorities, in certain circumstances without notifying the Member that the information has been provided. The Manager will take such steps as it determines may be necessary to comply with applicable law, regulations, orders, directives or special measures that may be required by government regulators. Governmental authorities are continuing to consider appropriate measures to implement anti-money laundering laws, and, at this point, it is unclear what steps the Manager may be required to take; however, these steps may include prohibiting such Member from making further contributions of capital to the Company, depositing distributions to which such Member would otherwise be entitled in an escrow account, and causing the withdrawal of such Member from the Company.

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ADDITIONAL INFORMATION

Prior to the consummation of the offering, the Company will provide to each prospective investor and such investor’s representatives and advisors, if any, the opportunity to ask questions and receive answers concerning the terms and conditions of this offering. Any such questions should be directed to Grant E. Lippincott or Kristina L. Castle, Rockbrook Advisors, LLC, 10730 Pacific Street, Suite 247, Omaha, Nebraska 68114. No other persons have been authorized to give information or to make any representations concerning this offering. If such other information or representations are given or made, they must not be relied upon as having been authorized by the Company.

This Memorandum is intended to present a general outline of the policies and structure of the Company, and the Manager. The Operating Agreement, which specifies the rights and obligations of the Members, should be reviewed thoroughly by each prospective Member. This Memorandum, including the Principal Terms of the Company, is qualified by reference to the Operating Agreement and Subscription Agreement. Copies of the Operating Agreement and Subscription Agreement will be made available upon request.

TABLE OF CONTENTS

Page

-i-

BACKGROUND ........................................................................................................................... 1

Brookside Investment Partners II, LLC ............................................................................. 1

Business of the Company................................................................................................... 1

Securities Offered .............................................................................................................. 2

DESCRIPTION OF BUSINESS.................................................................................................... 3

MARKET OPPORTUNITY .............................................................................................. 3

Insurance Industry Overview ................................................................................. 3

INVESTMENT FOCUS AND STRATEGY..................................................................... 5

Industry Focus of Brookside III ............................................................................. 5

Geographical Focus of Brookside III ..................................................................... 6

Deal Size Focus of Brookside III ........................................................................... 6

Stage of Growth Considerations for Brookside III ................................................ 6

INVESTMENT CRITERIA............................................................................................... 6

RELATIONSHIPS WITH OTHER INSURANCE INDUSTRY INVESTORS ............... 8

USE OF PROCEEDS .................................................................................................................... 9

MANAGEMENT INFORMATION AND EXPERIENCE......................................................... 10

INSURANCE INVESTING EXPERIENCE ................................................................... 10

Brookside III ........................................................................................................ 12

Potential Investment Opportunities for Brookside III ......................................... 13

Brookside III ........................................................................................................ 14

MANAGEMENT AND OPERATING PERSONNEL ................................................... 15

Principals.............................................................................................................. 15

Accessing Additional Operating Experience ....................................................... 16

PRINCIPAL TERMS OF THE COMPANY ............................................................................... 17

INVESTMENT AND OPERATING AGREEMENT MATTERS ................................. 17

OTHER MATTERS......................................................................................................... 20

Co-Investment ...................................................................................................... 20

Key Third Parties ................................................................................................. 20

Incurrence of Indebtedness .................................................................................. 20

Profit ShareTax Matter ........................................................................................ 21

Financial, Tax and Other Information ................................................................. 21

Conflicts of Interest, Other Activities .................................................................. 21

Tax Considerations .............................................................................................. 22

Risk Factors ......................................................................................................... 22

TABLE OF CONTENTS (continued)

Page

-ii-

Indemnification ..................................................................................................... 22

Legal Counsel ....................................................................................................... 22

SECURITIES OFFERED ............................................................................................................ 23

HIGH RISK FACTORS .............................................................................................................. 24

Market and Investment Risks........................................................................................... 24

Portfolio Company Risks ................................................................................................. 25

Company Risks ................................................................................................................ 26

Legal Risks....................................................................................................................... 28

INVESTOR CRITERIA .............................................................................................................. 31

LEGAL AND TAX MATTERS .................................................................................................. 33

ADDITIONAL INFORMATION ................................................................................................ 38