Objective: The objective of the Fund is to, over the long haul, beat all three major indices

DJIA, S&P 500 and the Nasdaq Composite. I also believe that in beating these three formidable benchmarks we would have beaten 90+% of mutual and hedge fund managers. The reason for this objective is that most funds that will be allocated to this fund by investors would likely have ended up in public-equities in one form or another. The vast majority of fund managers underperform the broad indices. So a simple alternate strategy for an investor is to put 100% of their investment in a given index. The ONLY reason for the existence of this Fund is for the Fund, over the long haul, to outperform the indices. If that is the case, the investors will be justified in choosing this investment option. There are two types of investments the fund will typically make investments in great businesses selling below their intrinsic value and special situations investments. There are two types of great business that are of interest to the Funds: 1. Value: Great, compelling companies trading at very low valuations relative to their expected value in a private sale. These companies may have little to no annual growth but tend to have a solid cash flow engine that's highly predictable and are trading at very low multiples to earnings, cash flow and/or other metrics of value. 2. Growth at Reasonable Price (GARP) Companies: These companies, in high-growth markets, have shown a history of growing fast and are expected to continue to do so. They are also priced well below their Intrinsic Value but likely not as cheap as the straight value plays. The Fund prefers GARP companies to straight value companies. The best returns will come from great, high growth companies that are available well below their intrinsic value. Special situations are investments that take advantage of market inefficiencies to generate market-beating returns. These include merger arbitrage, distressed securities, misunderstood and mispriced companies, distressed bonds, etc.

Before doing a rigorous analysis on a given company, the following three questions are reviewed: 1. Do I understand this business well? Is it well within my circle of competence? If the answer is no, the security is simply skipped over. 2. Is this a great business? A great business is one that has some of the following characteristics:

Recurring revenue streams Product differentiation and ability to raise prices ahead of inflation Some sort of Monopoly or Oligopoly type market positioning Strong franchise (as a result of its brand, IP portfolio, etc) that gives it insulation from most competitors

Most businesses do not have ANY of the above characteristics and some may just have one of the above. A business that has more than one of the above characteristics is, by definition, rare. If a great business is found, a third and more difficult question is asked: Is it on sale at a price well below its intrinsic value? The combination of a great business and it being on sale is, by definition, an anomaly. When such events occur, after rigorous analysis, an investment is made.

Partnership Rules: 1. The Fund only makes investments in publicly traded US equities, equity derived derivatives and bonds. Cash on hand will be usually invested in money market funds and other short-term instruments. 2. The specific portfolio holdings of the Fund are highly confidential and only released to the extent required by law. Warren Buffett perhaps expresses best why specific investment ideas should be kept confidential in the Berkshire Hathaway owners manual. "Despite our policy of candor, we will discuss our activities in marketable securities only to the extent legally required. Good investment ideas are rare, valuable and subject to competitive appropriation just as good product or business acquisition ideas are."

3. The Fund does not expect to employ any leverage or any sort of margin borrowing. However, the fund is permitted to use leverage as long as margin loans do not exceed 30% of the fund assets. The funds do not engage in shorting stocks or delve into any sort of futures or forward contracts. The investment style can be described as unleveraged long-only focused investing. 4. The Fund will be concentrated in a few securities that are believed to be undervalued. Typically 80% of assets will be invested in fewer than 15 securities and is not expected to hold over 20 distinct securities in the portfolio (even when fully invested). 5. Investors can redeem part or all of their interests in the Fund once a year on Dec. 31 with at least 60 days advance notice. Subscriptions are allowed every quarter (1/1, 4/1, 7/1, 10/1). 6. There is no management or performance fees payable unless the Fund achieves an annualized return greater than 6% (net to investors). In addition, the performance fee is subject to high water marks. The only expenses (if any) paid by investors are direct third-party expenses such as audit, tax preparation, third-party administration and trading/brokerage expenses. In addition, the investment manager expects to reinvest all fees earned back into the Fund. There is a complete alignment of interests between the investor and the investment manager.