Spruce Street Capital LP: investment adviser

Spruce Street also provides discretionary, sub-advisory services to a private fund managed by an unaffiliated investment adviser (the “Other Account”). As used herein, the term “Clients” or “Client Accounts” refers to the pooled investment vehicles that are advised or subadvised by Spruce Street. Spruce Street Capital Fund GP LLC, a Delaware limited liability company, serves as the general partner of certain Client privately offered vehicles in a “master-feeder” structure: Spruce Street Capital Master Fund LP, Spruce Street Capital Onshore Fund LP, and Spruce Street Capital Offshore Fund LP. Our investment decisions and advice with respect to each Client is to each Client’s investment objectives and guidelines, as set forth in the investment management agreements. This Brochure generally includes information about Spruce Street and its relationships with its Clients and affiliates. This Brochure does not constitute an offer to sell, or solicitation of an offer to buy, any securities. Note, all capitalized or defined terms below are described in further detail in the relevant investment advisory agreement or offering memorandum, as applicable. Spruce Street does not currently participate in any Wrap Fee Programs. As of March 1, 2026, Spruce Street managed approximately $556 million of client assets on a discretionary basis.

Spruce Street has the authority to waive, reduce or calculate differently the management fee with respect to any investor in its sole discretion, including investors that are partners, affiliates or employees of Spruce Street or the fund general partner, members of the immediate family of such persons and trusts or other entities established by them or for their benefit and certain other persons in the discretion of Spruce Street. The applicable management fee is generally deducted from each Investor account by the funds’ administrator upon Spruce Street’s proper instructions.

Expenses

Each Feeder Fund will bear its own expenses and its pro rata share of the Master Fund's expenses, including, the following: (i) the Management Fee; (ii) expenses related to the research, due diligence, financing, monitoring and disposition of actual and prospective investments of the Master Fund; (iii) operational expenses; (iv) fees and expenses of third-party professionals; (v) the costs of any litigation or investigation (or other similar event) involving activities of a Feeder Fund or the Master Fund; (vi) taxes and third-party audit and tax preparation expenses; (vii) insurance expenses; (viii) costs of preparing and distributing reports and notices; (ix) expenses incurred in connection with negotiating, amending, modifying, revising, restating and complying with provisions of any Side Letter Agreement and other similar arrangements with investors (including vendors and products related thereto), and expenses incurred in connection with any Transfers of Interests or a Limited Partner's admission or withdrawal, unless otherwise charged to or borne by the applicable transferee or Limited Partner; (x) fees and expenses related to compliance with the rules of any self-regulatory organization or applicable law in connection with the activities of a Feeder Fund or the Master Fund, including, any governmental, regulatory, licensing, filing or registration fees or taxes and fees and expense of any third-party compliance consultants; (xi) expenses incurred in connection with the offering and sale of the Interests and other similar expenses related to a Feeder Fund; (xii) expenses incurred in connection with any amendments, modifications, revisions or restatements to the constituent documents of a Feeder Fund or the Master Fund; (xiii) expenses incurred in connection with meetings with investors and prospective investors; (xiv) extraordinary expenses, including, indemnification expenses and fees and expenses incurred in connection with any tax audit by any tax authority, including, any related administrative settlement and judicial review; (xv) fees and expenses incurred in connection with the organization, reorganization, dissolution, winding-up or termination of a Feeder Fund or the Master Fund; and (xvi) other similar expenses of a Feeder Fund and the Master Fund. Each Feeder Fund will also indirectly bear any similar expenses of any trading subsidiary or special purpose vehicle of the Master Fund. For the avoidance of doubt, "similar expenses" refers to any expenses that are similar in type and nature to the expenses described above, and is intended, given the dynamic ongoing nature of the business of the Feeder Funds, to cover any expenses determined by the General Partner, in its sole discretion, to be primarily related to the categories listed above but not specifically enumerated. Accordingly, any description of the expenses that a Feeder Fund may bear (directly or indirectly) is not exhaustive. Generally, all expenses borne by a Feeder Fund, other than (i) the Management Fee, (ii) investment and investment-related expenses relating specifically to a Private Investment (addressed in the next paragraph), and (iii) any other expenses that the General Partner determines should be allocated to a particular Partner or Partners. To the extent that expenses to be borne by a Feeder Fund or the Master Fund are paid by the General Partner, Spruce Street or their affiliates, the relevant Feeder Fund or the Master Fund, as applicable, will reimburse such party for such expenses. Investment and investment-related expenses relating specifically to a Private Investment Account, whether or not the corresponding Private Investment is consummated, will generally be charged, to the extent practical, against the Capital Accounts indirectly participating in such Private Investment in proportion to their respective indirect participating percentage interests therein. It is not always practical or reasonable to allocate investment and investment-related expenses to a particular Private Investment, such as (i) general research expenses not related to a specific Private Investment that benefit Private Investments and/or other investments generally, (ii) research expenses that are subscription-based, aggregated together or otherwise paid for as a single bill or lump sum payment and (iii) other similar expenses that are difficult to divide and allocate to a single Private Investment. As a result, such expenses may not be charged solely to the Capital Accounts indirectly participating in such Private Investment in the manner set forth in the first sentence of this paragraph and instead may be charged to all Capital Accounts pro rata utilizing such methodology that the General Partner determines to be fair and reasonable. Notwithstanding the foregoing, the General Partner may allocate any of the foregoing expenses to the Capital Account(s) of a particular Partner or Partners if the General Partner determines in its sole discretion that such allocation is appropriate.

Certain of Spruce Street's determinations with respect to whether specific expenses should be borne by Spruce Street or by the Master Fund and the Other Accounts require subjective judgments. Spruce Street has a conflict of interest when making such judgments because Spruce Street will bear the costs of any expenses not allocated to a client. Spruce Street seeks to allocate expenses in a manner that it deems to be fair and equitable. The Spruce Street Funds do not have a pre-determined limit on their ordinary or extraordinary operating expenses. Each Feeder Fund's actual annual operating expenses are disclosed in such Feeder Fund's year-end audited financial statements, which are provided to each Limited Partner. Organizational and Offering Expenses Certain of the Spruce Street Fund's organizational and initial offering expenses will generally, for accounting purposes, be amortized by the Spruce Street Funds for up to a 60-month period. Amortization of such expenses over a period that is up to 60 months is a divergence from U.S. generally accepted accounting principles ("GAAP"), which might, in certain limited circumstances, result in a qualification of the relevant Spruce Street Fund's annual audited financial statements. If the Spruce Street Funds amortize their expenses but terminate before such expenses are fully amortized, the unamortized portion of the organizational expenses will be debited against the Spruce Street Funds' assets at that time. If a Limited Partner withdraws all or any portion of the balance in its Capital Account(s) prior to the end of the 60-month period during which the Spruce Street Funds are amortizing expenses, the General Partner may, but is not required to, accelerate a proportionate share of the unamortized expenses based upon the amount being withdrawn and reduce withdrawal proceeds by the amount of such accelerated expenses.

debited to the Capital Account corresponding to such Series Capital Account or, if paid by the Master Fund, such Series Capital Account, for such Fiscal Year and any other expenses of a Feeder Fund (other than Investor-Related Taxes) corresponding to such Series Capital Account for such Fiscal Year; provided, however, that the net capital appreciation upon which the calculation of the Incentive Allocation is based will be reduced to the extent of any balance in such Series Capital Account's Loss Recovery Account. The Incentive Allocation will also be made with respect to net capital appreciation attributable to amounts withdrawn, amounts distributed, and amounts transferred (provided that such transfer results in a change in the beneficial ownership of the Interest transferred) and in connection with the termination of a Feeder Fund or the Master Fund. The unrealized net capital appreciation and net capital depreciation of Private Investments will not be taken into account in calculating the Incentive Allocation. The net capital appreciation and net capital depreciation of Private Investments will be included in the Incentive Allocation calculation only in the Fiscal Year during which a Private Investment is realized (or deemed realized). With respect to any Limited Partner that is completely withdrawn from a Feeder Fund other than its interest in one or more Private Investments, allocations in respect of such Limited Partner will be made in a manner that gives effect to the economic provisions as further described in "Post-Withdrawal Incentive Allocation".

The "Incentive Allocation Rate" means 20% for a Series Capital Account corresponding to Tranche A Interests, and 15% and 17.5% for a Series Capital Account corresponding to Tranche F Interests and Tranche F-2 Interests, respectively. The Master Fund maintains a memorandum account (a "Loss Recovery Account") for each Series Capital Account that tracks the losses that must be recouped before an Incentive Allocation can be made with respect to such Series Capital Account (i.e., tracks the "high water mark" of such Series Capital Account). The balance in each Series Capital Account's Loss Recovery Account will be adjusted at the end of each Fiscal Year to reflect the aggregate net capital depreciation with respect to such Series Capital Account, if any, and will be adjusted (but not below zero) as necessary to account for net capital appreciation and intra-year withdrawals and distributions, including a reduction to zero for any Limited Partner that is fully withdrawn from a Feeder Fund or is fully withdrawn but for its indirect interest in one or more Private Investments. Additionally, if capital in a Capital Account is used to fund a Private Investment, the unrecovered balance in the Loss Recovery Account of the Series Capital Account corresponding to such Capital Account will be proportionately reduced. The reduction for a Private Investment will be reversed upon the realization or deemed realization of such Private Investment and any reallocation of the proceeds thereof to the Series Capital Account corresponding to the applicable Capital Account. Solely for purposes of determining an adjustment to the balance of a Series Capital Account's Loss Recovery Account, net capital appreciation and net capital depreciation for any applicable period will be calculated by taking into account the amount of the Management Fee, if any, debited to the Capital Account corresponding to such Series Capital Account or, if paid by the Master Fund, such Series Capital Account and any other expenses of a Feeder Fund (other than Investor-Related Taxes) corresponding to such Series Capital Account for such period, along with gains and losses realized or deemed realized from Private Investments and any Private Investment Income, in each case, as credited or debited to such Series Capital Account for such period. The balance in a Loss Recovery Account will not be affected by unrealized gains or losses related to Private Investments. Additional capital contributions do not affect the balance of any Loss Recovery Account. The Incentive Allocation is not made with respect to a Series Capital Account until the balance of such Series Capital Account's Loss Recovery Account has been reduced to zero. The Incentive Allocation will be determined separately with respect to each Capital Account established for a Limited Partner. Accordingly, it is possible that an Incentive Allocation may be made with respect to one Series Capital Account even though another Series Capital Account corresponding to a different Capital Account held by the same Limited Partner has not appreciated, or has depreciated in value during the same period. In the sole discretion of the General Partner, the Incentive Allocation may be waived, reduced or calculated differently with respect to the Capital Account(s) of any Limited Partner. The General Partner's capital account in the Master Fund and any Series Capital Accounts corresponding to Capital Accounts of Spruce Street-Related Investors will not be subject to the Incentive Allocation.

The Master Fund expects to pursue investment opportunities primarily in North America and Europe and may pursue investments in other geographic areas where Spruce Street determines attractive investment opportunities exist. The Master Fund employs a long-biased investment strategy. This strategy is fundamentally driven, leveraging scientific, biostatistical, regulatory, and commercial diligence to identify high-conviction opportunities. The Master Fund aims primarily to invest early in companies with promising drug assets, often at times when market recognition is low, and the risk/reward profile appears particularly favorable, however, the Master Fund may invest in companies at more mature stages in their lifecycle. The strategy of the Master Fund is designed to seek to take advantage of market inefficiencies in the valuations of life sciences companies. The Master Fund's investments may include open market purchases of public equities, financings with public companies, or investments in private companies. It is anticipated that long investments will be held for more than a year, provided that investments may be held for a shorter or longer duration. The investment process is rooted in an underwriting approach that emphasizes clinical and regulatory probability-of-success analyses and includes detailed evaluations of preclinical and clinical data, financial modeling, market research, and continual reassessment as new information emerges. Key elements of the investment process include:

Idea Generation – Investment opportunities are identified by monitoring, screening and updating an investable universe of companies, tracking clinical catalysts, screening for candidates for structured financings, and attending scientific and medical conferences. Research – The research process includes clinical and regulatory probability of success analyses and commercial analysis, and financial modeling to set price targets. Portfolio Management – The investment process includes a post-investment plan to manage the investment, including price targets, catalysts, risks and anticipated position sizing changes. Prior analyses and underwriting are frequently revisited, and investment decisions are updated accordingly.

The Master Fund will aim to concentrate its capital in a limited number of positions believed to reflect high quality ideas. Spruce Street believes that a certain amount of concentration will enhance the Master Fund's longterm, risk-adjusted returns by enabling:(i) greater understanding of each position through rigorous, in-depth research of fundamentals, risks, opportunities, and paths to value-creation and recognition, and (ii) efficient allocation of capital to opportunities where Spruce Street has the highest conviction. Spruce Street will aim to optimize the Master Fund's risk/reward profile by concentrating the Master Fund's capital in Spruce Street's highest conviction ideas, provided that the Master Fund may be more or less concentrated at any point in time. Hedges and short positions are limited and designed to manage certain exposures, and aggregate short exposure is expected to be smaller than long positions in this strategy. Risks Relating to the Structure of the Feeder Funds

Significant Fees and Expenses The fees and expenses of the Feeder Funds may be significant. The Feeder Funds must generate sufficient income to offset such fees and expenses to avoid a decrease in the net asset value of the Feeder Funds.

Absence of Regulatory Oversight Over the Feeder Funds and the Master Fund

The Feeder Funds and the Interests are not expected to be registered under the securities laws of the United States or any other jurisdiction other than the Cayman Islands (in the case of the Offshore Fund). In particular, the Feeder Funds will not be registered as an investment company under the Company Act, and, therefore, will not be required to adhere to the restrictions and requirements under the Company Act. Accordingly, the provisions of the Company Act (which, among other things, require investment companies to have a majority of disinterested directors, require securities to be held in custody by a bank or broker in accordance with rules requiring the segregation of securities, prohibit the investment companies from engaging in certain transactions with its affiliates and regulate the relationship between advisers and investment companies) are not applicable. The Offshore Fund and Master Fund are each regulated as a mutual fund under the Mutual Funds Act. However, registration under the Mutual Funds Act does not involve an examination of the merits of the Offshore Fund or the Master Fund or supervision of the investment performance of the Offshore Fund or the Master Fund by the Cayman Islands government or the Monetary Authority. There is no financial obligation or compensation scheme imposed on or by the government of the Cayman Islands in favor of or available to the investors in the Offshore Fund.

Liability of the Feeder Funds, the Master Fund and Separate Classes Each of the Feeder Funds and the Master Fund is a single legal entity and there is no limited recourse protection for any Class of Interests (or tranche thereof). Generally, creditors of a Feeder Fund may enforce claims against all assets of such Feeder Fund, but not against assets of the Master Fund, and creditors of the Master Fund may enforce claims against all assets of the Master Fund, but not against assets of the Feeder Funds. However, all assets of a Feeder Fund, including its interest in the Master Fund, may be available to meet all liabilities of such Feeder Fund, and all assets of the Master Fund may be available to meet all liabilities of the Master Fund, even if, in either case, the liability relates to a particular Capital Account, Series Capital Account, or Class of Interests of the Feeder Funds (or tranche thereof) or the Master Fund, as the case may be (e.g., new issues and any corresponding hedge positions). Thus, for example, in the event that the assets attributable to Capital Accounts participating in a Security were completely depleted by losses or liabilities, a creditor could enforce a claim against the assets of a Feeder Fund which would be borne by the other Capital Accounts that did not participate in the investment or transaction.

Private Investments Liquidity of Private Investment Accounts Capital invested in Private Investment Accounts generally is not available for withdrawal or distribution until the respective Private Investment is liquidated or distributed. A Partner may be required to continue to participate in Private Investments irrespective of whether such Partner has otherwise withdrawn from the Feeder Funds, and the Master Fund may be required to hold Private Investments for several years, if not longer. Additionally, the General Partner may designate a new Private Investment after a Limited Partner has submitted a withdrawal request, but before a Withdrawal Date relating to such withdrawal request, which may, in accordance with the terms described herein, reduce such withdrawing Limited Partner's withdrawal proceeds if there is insufficient cash available to pay such withdrawal proceeds.

No Maximum H olding Period Spruce Street has discretion as to whether to determine to designate an investment as a Private Investment and as to whether to designate any hedging or similar position as a Corresponding Hedging Position or as Corresponding Assets. Spruce Street also has discretion as to whether and when to cause the Master Fund to realize or deem realized all or a portion of any Private Investment, and will not be obligated to effect a realization or deemed realization upon the occurrence of an event that causes a Private Investment to become freely

tradable, even if Spruce Street determines to purchase such investment in the open market for the Liquid Portfolio.

Valuation of Private Investments At the time a Private Investment is designated as such it will generally be valued at cost. Thereafter, Private Investments generally will be valued by or on behalf of Spruce Street on a quarterly basis and the Management Fee in respect of capital invested in such Private Investments will be calculated by reference to the lower of initial cost, and such most-recent fair valuation. There is no guarantee that the value of a Private Investment as determined by Spruce Street will represent the value that will be realized by the Feeder Funds on the eventual disposition of the Private Investment or that would, in fact, be realized upon an immediate disposition of the Private Investment. Inaccurate valuations of Private Investments could impact, among other things, the Management Fee borne by a Limited Partner.

Certain Expenses Generally, all expenses borne by the Feeder Funds, other than (i) the Management Fee, (ii) investment and investment-related expenses relating specifically to a Private Investment and (iii) any other expenses that the General Partner determines should be allocated to a particular Partner or Partners (e.g., Investor-Related Taxes), will be debited to all of the Capital Accounts on a pro rata basis in accordance with their Partnership Percentages (or such other methodology that the General Partner determines to be fair and equitable). As the Partnership Percentages of the Capital Accounts will be calculated without taking into account any interests in Private Investment Accounts (i.e., the Partnership Percentages will be calculated only by reference to the Liquid Portfolio balances of the Capital Accounts), a Partner who has less exposure to Private Investment Accounts due to the timing of such Partner's subscription to a Feeder Fund can expect to bear a greater portion of such expenses than a Partner with a larger exposure to Private Investments.

Effect of Substantial Withdrawals Substantial withdrawals could be triggered by a number of events, including unsatisfactory performance, events in the markets, a significant change in personnel or management of Spruce Street, removal or replacement of Spruce Street as the investment manager of the Feeder Funds, legal or regulatory issues that investors perceive to have a bearing on the Feeder Funds or Spruce Street, or other events. Actions taken to meet substantial withdrawal requests from the Feeder Funds (as well as similar actions taken simultaneously by investors of any Other Accounts) could result in prices of Securities held by the Master Fund decreasing and in Master Fund expenses increasing (e.g., transaction costs and the costs of terminating agreements). The overall value of the Feeder Funds also may decrease because the liquidation value of certain assets held by the Master Fund may be materially less than their cost or mark-to- market value. The Master Fund may be forced to sell its more liquid positions, which may cause an imbalance in the portfolio that could have a material adverse effect on the remaining Limited Partners. Substantial withdrawals could also significantly restrict the Master Fund's ability to obtain financing or transact with derivatives counterparties needed for its investment strategies, which would have a further material adverse effect on the Feeder Funds' performance. The Feeder Funds and Spruce Street generally will not disclose to Limited Partners the amount of pending withdrawals or withdrawal requests and are under no obligation to make any such disclosure.

Limited Liquidity An investment in the Feeder Funds has limited liquidity because Limited Partners will generally have only limited rights to withdraw capital from the Feeder Funds (including there being no voluntary rights of withdrawal in respect of Private Investments) or transfer their Interests, and the Feeder Funds have the right

to suspend withdrawals, as described herein. Limited Partners must be prepared to bear the financial risks of an investment in the Feeder Funds for an indefinite period of time.

Access to Information and Effect on Withdrawals Because of the wide range of potential investments, potentially rapid shifts in the concentration of investments among types of Securities or strategies, the inherent complexity of many of the Master Fund's investment strategies and other factors, prospective Limited Partners and Limited Partners will not have sufficient information to analyze or evaluate in detail the specific risks and potential returns of the Master Fund's investment program prospectively. Spruce Street generally will not provide detailed information about the Master Fund's portfolio or any advance notice of anticipated changes in the composition of the Master Fund's portfolio, nor will Spruce Street provide information to prospective Limited Partners as to how the Master Fund voted proxies. Furthermore, in response to questions and requests and in connection with due diligence meetings and other communications, the Feeder Funds and Spruce Street may provide additional information to certain Limited Partners and prospective Limited Partners that is not distributed to other Limited Partners and prospective Limited Partners. Such information may affect a prospective Limited Partner's decision to invest in the Feeder Funds, and Limited Partners (which may include personnel and affiliates of Spruce Street) may be able to act on such additional information and withdraw their Interests potentially at higher values than other investors. Any such withdrawals may result in reduced liquidity for other investors and, in order to meet larger or more frequent withdrawals, the Feeder Funds may need to maintain a greater amount of cash and cash-equivalent investments than it would otherwise maintain, which may reduce the overall performance of the Feeder Funds. Each Limited Partner is responsible for asking such questions as it believes are necessary in order to make its own investment decisions, must decide for itself whether the limited information provided by Spruce Street and the Feeder Funds is sufficient for its needs and must accept the foregoing risks.

Delayed Schedules K-1 The Domestic Fund will provide final Schedules K-1 to the Limited Partners within 120 days of the last day of each tax year of the Domestic Fund or as soon as reasonably practicable thereafter. Limited Partners in the Domestic Fund may be required to obtain extensions of the filing date for their income tax returns at the U.S. federal, state and local levels.

Governmental Entity Investors Governmental entities, including pension plans maintained by governmental agencies and instrumentalities, may invest in the Feeder Funds. Such investors may be subject to laws that affect the applicability or enforcement of certain terms generally governing the Feeder Funds. For example, exculpation, indemnification, confidentiality, choice of law and choice of venue provisions may be applied differently with respect to such investors. In addition, investment in the Feeder Funds by certain governmental entities may subject the Feeder Funds and/or Spruce Street to increased regulatory burdens and public disclosures about the Feeder Funds, their investors, the Master Fund and its activities.

In-Kind Distributions Although the Feeder Funds do not presently intend to make distributions in kind, under certain circumstances a withdrawing Limited Partner may receive Securities (to the extent received by the Feeder Funds from the Master Fund) in lieu of, or in combination with, cash. Such distributions may include interests in one or more special purpose vehicles holding Securities owned by the Master Fund, or participations therein. To the extent a withdrawing Limited Partner is distributed interests in special purpose vehicles, such withdrawing Limited Partner will continue to be at risk with respect to the Feeder Funds' business. The value of the Securities distributed in kind may increase or decrease before they are sold either by the withdrawing Limited Partner, if received directly, or by Spruce Street or its affiliates, if held through a special purpose vehicle. In either case,

the withdrawing Limited Partner will incur transaction costs in connection with the sale of any such Securities and, in the case of interests in a special purpose vehicle, will bear a proportionate share of the operating and other expenses borne by such vehicle. Securities distributed in kind may not be readily marketable. The risk of loss and delay in liquidating these Securities will be borne by the Limited Partner, with the result that such Limited Partner may ultimately receive less cash than it would have received on the date of withdrawal if it had been paid in cash. Furthermore, to the extent that a withdrawing Limited Partner receives interests in special purpose vehicles, such withdrawing Limited Partner will generally have no voting rights or any control over when and at what price the Securities in which such vehicles have an interest are sold. The Master Fund through the Domestic Fund may also make in kind distributions of securities to the General Partner in respect of its investment in the Domestic Fund or the Master Fund in the event of a partial withdrawal. The opportunity to receive distributions in kind may not be offered to all investors. Risks Relating to the Operations and Investment Activities of the Master Fund

Systems and Operational Risks Generally The Master Fund depends on Spruce Street to develop and implement appropriate systems for the Master Fund's activities. The Master Fund relies heavily and on a daily basis on financial, accounting and other data processing systems to execute, clear and settle transactions across numerous and diverse markets and to evaluate certain Securities, to monitor its portfolio and capital, and to generate risk management and other reports that are critical to oversight of the Master Fund's activities. In addition, the Master Fund relies on information systems to store sensitive information about the Master Fund, Spruce Street, their affiliates and the Limited Partners. Certain of the Master Fund's and Spruce Street’s activities will be dependent upon systems operated by third parties, including prime brokers, the Administrator, one or more Outsourced Traders, market counterparties and other service providers, and Spruce Street may not be in a position to verify the risks or reliability of such third-party systems. Failures in the systems employed by Spruce Street, prime brokers, the Administrator, counterparties, exchanges and similar clearance and settlement facilities and other parties could result in mistakes made in the confirmation or settlement of transactions, or in transactions not being properly booked, evaluated or accounted for. Disruptions in the Master Fund's operations may cause the Master Fund to suffer, among other things, financial loss, the disruption of its business, liability to third parties, regulatory intervention or reputational damage. Any of the foregoing failures or disruptions could have a material adverse effect on the Feeder Funds and the Limited Partners' investments therein.

Cybersecurity Risk As part of its business, Spruce Street processes, stores and transmits large amounts of electronic information, including information relating to the transactions of the Master Fund and personally identifiable information of the Limited Partners. Similarly, service providers of Spruce Street, the Feeder Funds or the Master Fund, especially the Administrator, may process, store and transmit such information. Spruce Street has procedures and systems in place that it believes are reasonably designed to protect such information and prevent data loss and security breaches. However, such measures cannot provide absolute security. The techniques used to obtain unauthorized access to data, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time. Hardware or software acquired from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Network connected services provided by third parties to Spruce Street may be susceptible to compromise, leading to a breach of Spruce Street's network. Spruce Street's systems or facilities may be susceptible to employee error or malfeasance, government surveillance or other security threats. Online services provided by Spruce Street to the Limited Partners may also be susceptible to compromise. Breach of Spruce Street's information systems may cause information relating to the transactions of the Master Fund and personally identifiable information of the Limited Partners to be lost or improperly accessed, used or disclosed.

The service providers of Spruce Street, the Feeder Funds and the Master Fund are subject to the same electronic information security threats as Spruce Street. If a service provider fails to adopt or adhere to adequate data security policies, or in the event of a breach of its networks, information relating to the transactions of the Master Fund and personally identifiable information of the Limited Partners may be lost or improperly accessed, used or disclosed. The loss or improper access, use or disclosure of Spruce Street's or the Feeder Funds' proprietary information may cause Spruce Street or the Master Fund to suffer, among other things, financial loss, the disruption of its business, liability to third parties, regulatory intervention or reputational damage. Any of the foregoing events could have a material adverse effect on the Feeder Funds and the Limited Partners' investments therein.

Valuation of Assets and Liabilities The Master Fund's assets and liabilities are valued in accordance with the valuation policy of Spruce Street (the "Valuation Policy"), which is based on GAAP. A copy of the Valuation Policy is available upon request. The valuation of any asset or liability involves inherent uncertainty. The value of a Security determined in accordance with the Valuation Policy may differ materially from the value that could have been realized in an actual sale or transfer for a variety of reasons, including the timing of the transaction and liquidity in the market. Uncertainties as to the valuation of portfolio positions could have an impact on the net asset value of the Feeder Funds if the judgments of the General Partner, in its capacity as general partner of the Master Fund, regarding the appropriate valuation should prove to be incorrect.

GAAP Net Asset Value Divergence Due to GAAP requirements, the net asset value of the Feeder Funds for purposes of GAAP-compliant financial reporting may diverge from the net asset value of the Feeder Funds for all other purposes, including for purposes of allocating gains and losses among the Limited Partners, which, as described in this Memorandum, is relevant to, among other things, determining the balance of each Capital Account, calculating the Management Fee and the Incentive Allocation, and calculating the amounts payable by the Feeder Funds in respect of a withdrawal by or distribution to a Limited Partner. Net asset value divergence may occur, for example, in connection with the amortization of the organizational and initial offering expenses of the Feeder Funds, the measuring of fair value (as a result of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820), or the recognition or unrecognition of uncertain tax positions (as a result of FASB ASC 740).

Counterparty Risk The Master Fund expects to establish relationships to obtain financing, derivative intermediation and prime brokerage services that permit the Master Fund to trade in any variety of markets or asset classes over time. However, there can be no assurance that the Master Fund will be able to establish or maintain such relationships. An inability to establish or maintain such relationships could limit the Master Fund's trading activities, create losses, preclude the Master Fund from engaging in certain transactions or prevent the Master Fund from trading at optimal rates and terms. Moreover, a disruption in the financing, derivative intermediation and prime brokerage services provided by any such relationships could have a significant impact on the Master Fund's business due to the Master Fund's reliance on such counterparties. The Master Fund may effect transactions in the "over-the-counter" or "OTC" derivatives markets. The stability and liquidity of OTC derivatives transactions depends in large part on the creditworthiness of the parties to the transactions. In the OTC markets, the Master Fund enters into a contract directly with dealer counterparties which may expose the Master Fund to the risk that a counterparty will not settle a transaction in accordance with its terms because of a solvency or liquidity problem with the counterparty. Delays in settlement may also result from disputes over the terms of the contract (whether or not bona fide). In addition, the Master Fund

may have a concentrated risk in a particular counterparty, which may mean that if such counterparty were to become insolvent or have a liquidity problem, losses would be greater than if the Master Fund had entered into contracts with multiple counterparties. Certain OTC derivative contracts require that the Master Fund post collateral. If there is a default by a counterparty, the Master Fund under most normal circumstances will have contractual remedies pursuant to the agreements related to the transaction. However, exercising such contractual rights may involve delays or costs which could result in the net asset value of the Master Fund being less than if the Master Fund had not entered into the transaction. Furthermore, there is a risk that any of such counterparties could become insolvent and/or the subject of insolvency proceedings. In such case, the recovery of the Master Fund's Securities from such counterparty or the payment of claims therefor may be significantly delayed and the Master Fund may recover substantially less than the full value of the Securities entrusted to such counterparty. Collateral that the Master Fund posts to its counterparties that is not segregated with a third party custodian may not have the benefit of customer-protected "segregation" of such funds. In the event that a counterparty were to become insolvent, the Master Fund may become subject to the risk that it may not receive the return of its collateral or that the collateral may take some time to return. In addition, the Master Fund may use counterparties located in jurisdictions outside the United States. Such local counterparties usually are subject to laws and regulations in non-U.S. jurisdictions that are designed to protect customers in the event of their insolvency. However, the practical effect of these laws and their application to the Master Fund's assets are subject to substantial limitations and uncertainties. Because of the range of possible factual scenarios involving the insolvency of a counterparty and the potentially large number of entities and jurisdictions that may be involved, it is impossible to generalize about the effect of such an insolvency on the Master Fund and its assets. Investors should assume that the insolvency of any such counterparty would result in significant delays in recovering the Master Fund's Securities from or the payment of claims therefor by such counterparty and a loss to the Master Fund, which could be material.

Competition; Availability of Investments Certain markets in which the Master Fund may invest are extremely competitive for attractive investment opportunities. As a result, there can be no assurance that Spruce Street will be able to identify or successfully pursue attractive investment opportunities in such environments.

Volatility Risk The Master Fund's investment program may involve the purchase and sale of relatively volatile Securities and/or investments in volatile markets. Fluctuations or prolonged changes in the volatility of such Securities and/or markets can adversely affect the value of investments held by the Master Fund.

Credit Ratings In general, the credit rating assigned by a nationally recognized rating agency to a Security represents such rating agency's opinion of the safety of the principal and interest payments of the rated instrument based on available information. Such ratings are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of such Securities. Such ratings also do not reflect macroeconomic or systemic risk, including the risk of increased illiquidity in the credit markets. Further, credit ratings may change over time due to various factors, including changes in the creditworthiness of the issuer and/or changes in the rating agency's analytics and processes. It is possible that a rating agency might not change its rating of a particular issue on a timely basis to reflect subsequent events and, as a result, outstanding ratings may not reflect the

issuer's current credit standing. The Master Fund may incur losses if it makes investments based on credit ratings that subsequently change in a way not favorable to the Master Fund's investment objective.

Co-Investments with Third Parties The Master Fund may co-invest with third parties through joint ventures or other entities. Third-party involvement with an investment may negatively impact the returns of such investment if, for example, the thirdparty co-venturer has financial difficulties, has economic or business interests or goals that are inconsistent with those of the Master Fund or is in a position to take (or block) action in a manner contrary to the Master Fund's investment objective. In circumstances where such third parties involve a management group, such third parties may enter into compensation arrangements relating to such investments, including incentive compensation arrangements. Such compensation arrangements will reduce the returns to participants in the investments.

Significant Positions in Securities; Regulatory Requirements In the event the Master Fund acquires a significant stake in certain issuers of securities and such stake exceeds certain percentage or value limits, the Master Fund may be subject to regulation and regulatory oversight that may impose notification and filing requirements or other administrative burdens on the Master Fund and Spruce Street. Any such requirements may impose additional costs on the Master Fund and may delay the acquisition or disposition of the securities or the Master Fund's ability to respond in a timely manner to changes in the markets with respect to such securities. In addition, "position limits" may be imposed by various regulators that may limit the Master Fund's ability to effect desired trades. Position limits are the maximum amounts of gross, net long or net short positions that any one person or entity may own or control in a Security. All positions owned or controlled by the same person or entity, even if in different accounts, may be aggregated for purposes of determining whether the applicable position limits have been exceeded. To the extent that the Master Fund's position limits were aggregated with an affiliate's position limits, the effect on the Master Fund and resulting restriction on its investment activities may be significant. If at any time positions managed by Spruce Street were to exceed applicable position limits, Spruce Street would be required to liquidate positions, which might include positions of the Master Fund, to the extent necessary to come within those limits. Further, to avoid exceeding any position limits, the Master Fund might have to forego or modify certain of its contemplated trades. In addition, if the Master Fund, acting alone or as part of a group, acquires beneficial ownership of more than 10% of a certain class of securities of a public company or places a director on the board of directors of such a company, under Section 16 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Master Fund may be subject to certain additional reporting requirements and may be required to disgorge certain short-swing profits arising from purchases and sales of such securities. Furthermore, in such circumstances the Master Fund will be prohibited from entering into a short position in such issuer's securities, and therefore limited in its ability to hedge such investments. Similar restrictions and requirements may apply in non-U.S. jurisdictions.

Commodity Interest Trading Limit Spruce Street currently operates the Master Fund subject to the CFTC Rule 4.13(a)(3) de minimis exemption (the "4.13(a)(3) Exemption"). While the 4.13(a)(3) Exemption provides relief from certain CFTC reporting and recordkeeping requirements, it generally requires the Master Fund to, among other things, have de minimis levels of commodity interest trading. Accordingly, the Master Fund will operate with significant restrictions upon its trading of the instruments that are restricted under the 4.13(a)(3) Exemption, such as commodity futures, security futures options thereon and certain swaps. As a substitute for such instruments, the Master Fund may trade other instruments that are not restricted under the 4.13(a)(3) Exemption. As a result, the Master

Fund may incur higher transaction costs or effect a less optimal hedge than it would otherwise be able to if it were not operated subject to the 4.13(a)(3) Exemption.

Litigation Risk The Master Fund could be a party to lawsuits either initiated by it, or by a company in which the Master Fund invests, other shareholders of such company, or U.S. federal, state and non-U.S. governmental bodies. There can be no assurance that any such litigation, once begun, would be resolved in favor of the Master Fund.

Exposure to Material Non-Public Information From time to time, Spruce Street (or its personnel) may receive material non-public information with respect to an issuer of publicly traded securities. In such circumstances, the Master Fund will be prohibited, by law, policy or contract, for a period of time from (i) unwinding a position in such issuer, (ii) establishing an initial position or taking any greater position in such issuer and (iii) pursuing other investment opportunities related to such issuer

Currency Exchange Exposure The Master Fund may invest in Securities denominated in currencies other than the U.S. dollar. The Master Fund, however, values its Securities in U.S. dollars. The Master Fund may or may not seek to hedge its nonU.S. currency exposure by entering into currency hedging transactions. There can be no guarantee that Securities suitable for hedging currency or market shifts will be available at the time when the Master Fund wishes to use them, or that hedging techniques employed by the Master Fund will be effective. Furthermore, certain currency market risks may not be fully hedged or hedged at all. To the extent unhedged, the value of the Master Fund's positions denominated in currencies other than the U.S. dollar will fluctuate with U.S. dollar exchange rates as well as with the price changes of the investments in the various local markets and currencies.

Identity and Reporting of Beneficial Ownership; Withholding on Certain Payments In order to avoid a U.S. withholding tax of 30% on certain payments (which might in the future include payments of gross proceeds) made with respect to certain actual and deemed U.S. investments, the Offshore Fund and the Master Fund generally will be required to timely register with the U.S. Internal Revenue Service (the "Service") and agree to identify, and report information with respect to, certain direct and indirect U.S. account holders (including debtholders and equity holders). The Cayman Islands has signed a Model 1B (nonreciprocal) inter-governmental agreement with the United States (the "US IGA") to give effect to the foregoing withholding and reporting rules. So long as the Offshore Fund and the Master Fund comply with the US IGA and the Cayman Islands enabling legislation, they will not be subject to the related U.S. withholding tax. A non-U.S. investor in the Offshore Fund will generally be required to provide to the Offshore Fund information which identifies its direct and indirect U.S. ownership. Under the US IGA, any such information provided to the Offshore Fund and certain financial information related to such investor's investment in the Offshore Fund will be shared with the Cayman Islands Tax Information Authority or its delegate (the "Cayman TIA"). The Cayman TIA will exchange the information reported to it with the Service annually on an automatic basis. A non-U.S. investor that is a "foreign financial institution" within the meaning of Section 1471(d)(4) of the Internal Revenue Code will generally be required to timely register with the Service and agree to identify, and report information with respect to, certain of its own direct and indirect U.S. account holders (including debtholders and equity holders). A non-U.S. investor who fails to provide such information to the Offshore Fund or timely register and agree to identify, and report information with respect to, such account holders (as applicable) may be subject to the 30% withholding tax with respect to its share of any such payments attributable to actual and deemed U.S. investments of the Offshore Fund, and the General Partner may take any action in relation to an investor's Interest or withdrawal proceeds to ensure that such withholding is economically borne

by the relevant investor whose failure to provide the necessary information or comply with such requirements gave rise to the withholding. Investors should consult their own tax advisers regarding the possible implications of these rules on their investments in the Offshore Fund.

Partnership Tax Audits Each of the Domestic Fund and the Master Fund, each of which intends to be treated as a partnership for U.S. tax purposes, generally will be required to file a tax return with the Service. If the tax returns of the Domestic Fund or the Master Fund are audited by the Service, the U.S. tax treatment of such partnership's income and deductions generally is determined at the level of such partnership. Under the general rule, an audit adjustment of the Domestic Fund's or the Master Fund's U.S. tax return filed or required to be filed for any tax year (a "Prior Year") could result in a tax liability (including interest and penalties) imposed on the Domestic Fund or the Master Fund, as applicable, for the year during which the adjustment is determined (the "Current Year"). The tax liability generally is determined by using the tax rates under the Internal Revenue Code applicable to U.S. taxpayers. However, (i) the Domestic Fund may be able to use a lower tax rate to compute the tax liability by taking into account (to the extent it is the case and the implementing rules permit) the fact that the Domestic Fund has certain tax-exempt partners and (ii) the Master Fund may also be able to use a lower tax rate to compute the tax liability by also taking into account the fact that the Offshore Fund is generally not expected to be subject to U.S. tax on most, if not all, of its share of, the Master Fund's income. To mitigate the potential adverse consequences of the general rule, the Master Fund may be able to elect with the Service to pass through such audit adjustments for any year to its members who participated in the Master Fund for the Prior Year, in which case the Feeder Funds and each Prior Year participating member (and not the Master Fund itself) generally would be responsible for the payment of any tax deficiency, determined after including their share of the adjustments on their tax returns for the Current Year and calculated, in the case of the Feeder Funds, using the tax rates generally applicable to non-U.S. entities such as the Feeder Funds.1 The Feeder Funds may also be able to mitigate such adverse consequences by, after the audit adjustments are made, filing an amended U.S. tax return for the Prior Year and paying tax, if any, on its share of the items adjusted on audit. The extent to which the Feeder Funds and/or the Master Fund will be able to mitigate the operation of the general rule under either of these alternatives is uncertain and may depend upon future regulatory guidance and amendments to the legislation. Investment Strategy Risks

Risk of Loss No guarantee or representation is made that the Master Fund's investment program, including the Master Fund's investment objective, diversification strategies or risk monitoring goals, will be successful. Investment results may vary substantially over time. No assurance can be made that profits will be achieved or that substantial or complete losses will not be incurred.

Long/Short The success of the Master Fund's long/short investment strategy depends upon Spruce Street 's ability to identify and purchase Securities that are undervalued and identify and sell short Securities that are overvalued. The identification of investment opportunities in the implementation of the Master Fund's long/short investment strategies is a difficult task, and there are no assurances that such opportunities will be successfully recognized or acquired. In the event that the perceived opportunities underlying the Master Fund's positions

were to fail to converge toward, or were to diverge further from values expected by Spruce Street, the Master Fund may incur a loss. In the event of market disruptions, significant losses can be incurred which may force the Master Fund to close out one or more positions. Furthermore, the valuation models used to determine whether a position presents an attractive opportunity consistent with Spruce Street's long/short strategies may become outdated and inaccurate as market conditions change.

Short Selling General Risk The success of the Master Fund's short selling investment strategy depends upon Spruce Street's ability to identify and sell short Securities that are overvalued. A short sale creates the risk of a theoretically unlimited loss, in that the price of the underlying Security could theoretically increase without limit, thus increasing the cost to the Master Fund of buying those Securities to cover the short position.

Borrowing and Counterparty Risk There can be no assurance that the Master Fund will be able to maintain the ability to borrow Securities sold short. In such cases, the Master Fund can be "bought in" (i.e., forced to repurchase Securities in the open market to return to the lender). There also can be no assurance that the Securities necessary to cover a short position will be available for purchase at or near prices quoted in the market. Purchasing Securities to close out a short position can itself cause the price of the Securities to rise further, thereby exacerbating the loss. Even though the Master Fund secures a "good borrow" of the Security sold short at the time of execution, the lending institution may recall the lent Security at any time, thereby forcing the Master Fund to purchase the Security at the then-prevailing market price, which may be higher than the price at which such Security was originally sold short by the Master Fund. In addition, the Master Fund may be required to provide additional margin to its counterparties, including its prime brokers, on short notice if the price of a Security underlying a short position suddenly rises. If the Master Fund is unable to deliver the additional margin required, the Master Fund may need to prematurely close out the short position at unattractive prices, thereby resulting in a substantial loss. Depending on the timing and magnitude of a price increase in respect of an open short position, the Master Fund may be required to liquidate long positions to meet margin requirements, thereby further increasing the losses (or decreasing the gains) of the Master Fund. Further, fees charged to the Master Fund for borrowing Securities may be substantial, and will decrease any gains (or increase losses) associated with a short position. Short strategies can also be implemented synthetically through various instruments and be used with respect to indices or in the OTC market and with respect to futures and other instruments. In some cases of synthetic short sales, there is no floating supply of an underlying instrument with which to cover or close out a short position and the Master Fund may be entirely dependent on the willingness of OTC market makers to quote prices at which the synthetic short position may be unwound. There can be no assurance that such market makers will be willing to make such quotes. Short strategies can also be implemented on a leveraged basis.

Short-Squeeze Risk A so-called "short squeeze" can occur when the price of Securities in which the Master Fund has an open short position rise sharply in a short time frame. The rapid rise may be a result of (i) multiple

short sellers seeking to cover their short positions in the same time frame by purchasing the Security, resulting a rapid price increase; (ii) market participants collectively purchasing a significant amount of shares, thereby causing a substantial increase the price of such Securities; or (iii) one or more lenders of a Security that was used to facilitate a short position suddenly demanding the return of the Security that has been loaned. A "short squeeze" may result in the Master Fund having to prematurely close out a short position at relatively unattractive high prices, resulting in a substantial loss. Further, the risk of a "short squeeze" likely will increase if other short sellers, market participants and/or lenders become aware of the Master Fund's short positions, including, without limitation, as a result of legally required reporting with respect to the Master Fund's ownership of options to purchase the underlying Security being shorted.

Legal Restrictions and Reporting-Related Risk Certain jurisdictions have enacted restrictions on short selling (including wholesale bans, at times) as well as public disclosure requirements. If additional short selling restrictions and disclosure requirements are enacted, the prices of the instruments in which the Master Fund invests may be materially affected and the ability of Spruce Street to take advantage of opportunities for short selling may be significantly reduced. Specifically, on October 13, 2023, the SEC adopted new rule 13f-2 ("Rule 13f-2") of the Exchange Act. Rule 13f-2 requires institutional investment managers to report equity security short positions to the SEC on new Form SHO. While the Form SHO information that Spruce Street will file with the SEC (if any) is treated as confidential, the SEC plans to publish aggregated data derived from Form SHO submissions within a month of the end of each reporting period. This information published by the SEC will be the aggregated gross short position for each class of equity security and the aggregate of the net activity reported by all reporting managers for each equity security. In addition, each month the SEC also plans to publish similar aggregated Form SHO data for the prior 12 months that reflect updated information that accounts for any changes that result from amendments and restatements to Form SHO filings. Rule 13f-2 went into effect on January 2, 2024. However, compliance with the Rule 13f-2 reporting requirements was scheduled for January 2025 and later delayed to January 2026, with the SEC commencing the publication of aggregated short position data collected under Rule 13f-2 shortly after. In addition, in December 2023, several industry groups sued the SEC to invalidate the rule, although it is not clear whether the case will be resolved before market participants will need to comply with the rule's requirements. While the short position information provided by Spruce Street to the SEC will be confidential and not available to the public, market participants will now have monthly visibility, albeit on an aggregate basis, into the magnitude of open short positions with respect to a particular issuer. The disclosure that will be provided pursuant to Rule 13f-2 increases the risk that a "short squeeze" could occur in one or more short positions maintained by the Master Fund because market participants will now have broad and regularly recurring information regarding the open short positions. Long-Term The success of the Master Fund's long-term investment strategy depends upon Spruce Street's ability to identify and purchase Securities that are undervalued and hold such investments so as to maximize value on a longterm basis. In pursuing any long-term strategy, the Master Fund may forego value in the short-term or temporary investments in order to be able to avail the Master Fund of additional and/or longer term opportunities in the future. Consequently, the Master Fund may not capture maximum available value in the short-term, which may be disadvantageous, for example, for Limited Partners who withdraw all or a portion of their Capital Accounts before such long-term value may be realized by the Master Fund.

Short-Term Market Considerations Spruce Street's trading decisions may be made on the basis of short-term market considerations, and the portfolio turnover rate could result in significant trading related expenses.

Leverage and Borrowing Leverage for Investment Purposes The use of leverage will allow the Master Fund to make additional investments, thereby increasing its exposure to assets, such that its total assets may be greater than its capital. However, leverage will also magnify the volatility of changes in the value of the Master Fund's portfolio. The effect of the use of leverage by the Master Fund in a market that moves adversely to its investments could result in substantial losses to the Master Fund, which would be greater than if the Master Fund were not leveraged.

Borrowing for Cash Management Purposes The Master Fund has the authority to borrow for cash management purposes, such as to satisfy withdrawal requests. The rates at and terms on which the Master Fund can borrow will affect the operating results of the Master Fund.

Collateral The instruments and borrowings utilized by the Master Fund to leverage investments may be collateralized by all or a portion of the Master Fund's portfolio. Accordingly, the Master Fund may pledge or charge its Securities in order to borrow or otherwise obtain leverage for investment or other purposes. Should the Securities pledged or charged to brokers to secure the Master Fund's margin accounts decline in value, the Master Fund could be subject to a "margin call", pursuant to which the Master Fund must either deposit additional funds or Securities with the broker or suffer mandatory liquidation of the pledged or charged Securities to compensate for the decline in value. The banks and dealers that provide financing to the Master Fund can apply essentially discretionary margin, "haircut", financing and collateral valuation policies. Changes by counterparties in any of the foregoing may result in large margin calls, loss of financing and forced liquidations of positions at disadvantageous prices. Lenders that provide other types of asset-based or secured financing to the Master Fund may have similar rights. There can be no assurance that the Master Fund will be able to secure or maintain adequate financing.

Costs Borrowings will be subject to interest, transaction and other costs, and other types of leverage also involve transaction and other costs. Any such costs may or may not be recovered by the return on the Master Fund's portfolio.

Lending of Portfolio Securities The Master Fund may lend securities on a collateralized and an uncollateralized basis from its portfolio to creditworthy securities firms and financial institutions. While a securities loan is outstanding, the Master Fund will continue to receive the equivalent of the interest or dividends paid by the issuer on the securities, as well as interest on the investment of the collateral or a fee from the borrower. The risks in lending securities, as with other extensions of secured credit, if any, consist of possible delay in receiving additional collateral, if any, or in recovery of the securities or possible loss of rights in the collateral, if any, should the borrower fail financially.

Diversification and Concentration Spruce Street expects that the Master Fund's portfolio will be, at any given time, concentrated in a limited number or types of Securities. In addition, the Master Fund's portfolio may become significantly concentrated in Securities related to a single or a limited number of issuers, industries, sectors, strategies, countries or geographic regions. This limited diversification may result in the concentration of risk, which, in turn, could expose the Master Fund to losses disproportionate to market movements in general if there are disproportionately greater adverse price movements in such Securities.

Lack of Control The Master Fund may invest in debt instruments and equity securities of companies that it does not control, which the Master Fund may acquire through market transactions or through purchases of securities directly from the issuer or other shareholders. Such Securities will be subject to the risk that the issuer may make business, financial or management decisions with which the Master Fund does not agree or that the majority stakeholders or the management of the issuer may take risks or otherwise act in a manner that does not serve the Master Fund's interests. In addition, the Master Fund may share control over certain investments with coinvestors, which may make it more difficult for the Master Fund to implement its investment approach or exit the investment when it otherwise would. The occurrence of any of the foregoing could have a material adverse effect on the Feeder Funds and the Limited Partners' investments therein.

H edging Transactions The Master Fund may utilize Securities for risk management purposes in order to: (i) protect against possible changes in the market value of the Master Fund's investment portfolio resulting from fluctuations in the markets and changes in interest rates; (ii) protect the Master Fund's unrealized gains in the value of its investment portfolio; (iii) facilitate the sale of any Securities; (iv) enhance or preserve returns, spreads or gains on any Security in the Master Fund's portfolio; (v) hedge against a directional trade; (vi) hedge the interest rate, credit or currency exchange rate on any of the Master Fund's Securities; (vii) protect against any increase in the price of any Securities the Master Fund anticipates purchasing at a later date; or (viii) act for any other reason that Spruce Street deems appropriate. The Master Fund will not be required to hedge any particular risk in connection with a particular transaction or its portfolio generally Spruce Street may be unable to anticipate the occurrence of a particular risk and, therefore, may be unable to attempt to hedge against it. While the Master Fund may enter into hedging transactions to seek to reduce risk, such transactions may result in a poorer overall performance for the Master Fund than if it had not engaged in any such hedging transaction. Moreover, the portfolio will always be exposed to certain risks that cannot be hedged.

Discretion of Spruce Street; New Strategies and Techniques While Spruce Street will generally seek to employ the representative investment strategies and techniques discussed herein, Spruce Street (subject to the policies and control of the General Partner, in its capacity as general partner of the Master Fund) has considerable discretion in the types of Securities the Master Fund may trade and has the right to modify the investment strategies and techniques of the Master Fund without the consent of the Limited Partners. New investment strategies and techniques may not be thoroughly tested in the market before being employed and may have operational or theoretical shortcomings which could result in unsuccessful trades and, ultimately, losses to the Master Fund. In addition, any new investment strategy or technique developed by the Master Fund may be more speculative than earlier investment strategies and techniques and may involve material and as-yet-unanticipated risks that could increase the risk of an investment in the Master Fund. Risks Relating to Methods of Analysis

Fundamental Analysis Certain trading decisions made by Spruce Street may be based on fundamental analysis. Data on which fundamental analysis relies may be inaccurate or may be generally available to other market participants. To the extent that any such data are inaccurate or that other market participants have developed, based on such data, trading strategies similar to the Master Fund's trading strategies, the Master Fund may not be able to realize its investment goals. In addition, fundamental market information is subject to interpretation. To the extent that Spruce Street misinterprets the meaning of certain data, the Master Fund may incur losses.

Alternative Data Spruce Street may use alternative data in its investment process. Alternative data includes datasets that have been culled from a variety of sources, such as internet usage, payment records, financial transactions, weather and other physical phenomena sensors, applications and devices (such as smartphones) that generate location and mobility data, data gathered by satellites, and government and other public records databases (this data is sometimes referred to as "big data" or "alternative data"). Spruce Street applies this alternative data to better anticipate micro- and macro-economic trends and otherwise to develop or improve trading or investment themes. The analysis and interpretation of alternative data involves a high degree of uncertainty and may entail significant expense, including technological efforts, that are expected to be borne—in whole or in part—by the Master Fund. No assurance can be given that Spruce Street will be successful in utilizing alternative data in its investment process. Moreover, there has been increased scrutiny from a variety of regulators regarding the use of alternative data in this manner, and its use or misuse under current or future laws and regulations could create liability for Spruce Street and the Master Fund in numerous jurisdictions. Spruce Street cannot predict what, if any, regulatory or other actions may be asserted with regard to alternative data, but any adverse inquiries or formal actions could cause reputational, financial, or other harm to Spruce Street or to the Feeder Funds. Conversely, any future limitations on the use of alternative data could have a material adverse impact on the performance of the Master Fund. Risks Relating to Specific Sectors and Types of Companies

Life Sciences and H ealthcare Sector Investments in companies in the life sciences and healthcare sector involve a high degree of business, financial, technological and regulatory risk which can result in substantial losses. These non-exhaustive risks include, but are not limited to, the following:

The process of obtaining and maintaining regulatory approvals may vary and involves substantial regulatory discretion, is expensive and often takes many years, if approval is obtained at all. Failure to obtain and maintain regulatory approval for a product candidate following a business combination would have an adverse effect on value of the underlying securities of a healthcare company; Certain of these companies may become involved in lawsuits related to their patents or products; Government policies and regulations applicable to certain of these companies may change in ways that adversely affect them; Investor sentiments and preferences with regard to healthcare sector investments, some of which are generally perceived as risky, may change, which may have an adverse effect on the price of underlying securities;

U.S. stock markets may become more volatile, which may affect the prices of healthcare company securities and, in turn, may cause the performance of the Master Fund to experience substantial volatility; Scrutiny of U.S. drug pricing practices may result in increased government oversight and regulation, which could adversely affect the profitability of certain healthcare companies. Dramatic changes in pricing may adversely affect a healthcare company's valuation; Certain healthcare companies derive a large portion of their revenues from reimbursement by national governments and commercial insurers. Dramatic changes in reimbursement policies or additional government regulation may adversely affect a healthcare company's valuation; Medical product development is an inherently risky endeavor due to the relative unpredictable nature of biological systems. Success rates are generally low and medical products in the pipeline may fail despite success of an initial product. Spruce Street's ability to predict outcomes of biological trials and estimate the probability of success is also subject to imprecision and errors; Many healthcare companies face high research and development costs and long development timeframes resulting in persistent losses. As a result, significant ongoing financing may be necessary, which may result in shareholder dilution. An inability to obtain any such financing may have a significant adverse effect on the financial condition of such healthcare companies; Early-stage healthcare companies may not have a material amount of revenue for many years, if ever. Valuation of these companies is highly imprecise and subject to significant volatility in their share prices, particularly as a result of negative news related to the company; A healthcare company's revenue stream may be largely dependent upon such company's intellectual property patent estates. Loss of critical patents, inability to obtain such patents or infringement on patents of others (i.e., no freedom to operate) may adversely affect such company's valuation; A healthcare company's revenue stream may be highly dependent upon such company's technology. Rapid innovation by others in the industry may render such company technology obsolete which may adversely affect such company's valuation; Due to the highly profitable nature of successfully bringing a drug to market, many drug targets and therapeutic approaches are being pursued concurrently by multiple companies which, if all are successful, could limit the value to any one company; The viability of many healthcare companies depends largely on whether such companies can obtain and maintain various regulatory approval of their products or services. Failing to obtain or maintain regulatory approval for one or more of its products or services may have a significant adverse effect on the financial condition of a company and threaten its ability to operate as a going concern; Many new therapeutic approaches (i.e., gene therapy) require highly complex commercial manufacturing processes. The inability of a company to adequately manufacture sufficient quantities of the product to supply the market at scale could result in a significant adverse effect on the financial condition of such healthcare companies; Successful medical product development is highly dependent on clinical trial results showing therapy is both safe and effective. If clinical trials are not successful, or if new scientific knowledge causes a product to be unsafe to patients or uncompetitive in the market, a company may lose most of its market value; Products with seemingly favorable profiles in clinical trials may fail to provide a clinically meaningful benefit in practice, resulting in decreased patient and physician demand. Such decreased demand may result in lower-than-expected company revenues which would adversely affect the financial condition of the company; Many healthcare companies are highly dependent on a single product or technology. If for some reason such product or technology is impaired there may be little or no residual value in the company; Except in certain situations, small healthcare companies are not able to effectively market products on their own and thus are often required to partner with larger companies. Failure to forge strategic

partnerships with larger companies may limit the revenue potential of the company's products which may adversely affect the financial condition of the company; In the case of any direct investments by the Master Fund in biotechnology assets, Spruce Street may not be successful in structuring these investments in a way that shields the Master Fund, and in turn the Feeder Funds, from liability in the event of lawsuits relating to any products or rights in which the Master Fund has a direct interest, thereby potentially resulting in the Master Fund bearing such liabilities and, in such event, the Master Fund may suffer potentially significant losses beyond its investment, which would have an adverse impact on the Feeder Funds; The prices at which investments by the Master Fund will be made may be based, in part, on assumptions that a limited number of other products will compete with the relevant underlying products in the markets in which they are sold, or that the underlying products will otherwise command a pricing premium in these markets, which assumptions may prove to be inaccurate; Some of the licensing agreements or other rights relating to the investments held by the Master Fund may be terminated, which may have a material adverse effect on the value of such investments; Certain of the companies in which the Master Fund may invest may also experience adverse impact from reliance on third party manufacturers, collaborators, and clinical research organizations who may fail to perform according to agreed specifications; inability to control the development of out-licensed drug compounds or drug candidates; inability of collaborators' to develop and commercialize product candidates; inability to maintain or obtain adequate product liability and other insurance coverage; inability to compete against third parties with greater resources; inability to in-license potential drug compounds or drug candidates or other technology; excessive leverage; limitations on their ability to incur additional indebtedness and incur liens on their assets restricting their ability to obtain additional capital when needed; cost of goods sold remaining high enough that it is difficult to achieve profitability; third-party payors for drugs or diagnostics rescinding or modifying their contracts or reimbursement policies or delaying payments; inability to expand as expected outside the United States; failure of physicians to prescribe a drug or diagnostic to the extent anticipated; inability to obtain inputs necessary to the manufacture of a drug or diagnostic at the anticipated cost; failure of information technology and telecommunications systems that are critical to their business; failure to appropriately handle or dispose of biological and hazardous materials; misplaced reliance on third-party distributors; difficulties in integrating legacy companies from a merger or acquisition; and inability to recruit talented personnel, including scientists; The healthcare industry is (i) highly regulated at both the federal and state levels in the United States and internationally (and may become more regulated over time) and (ii) subject to frequent regulatory change. As noted above, certain segments may be highly dependent upon various government (or private) reimbursement programs. An adverse review or determination by any applicable judicial or regulatory authority of any such law or regulation, or an adverse change in applicable regulatory requirements or reimbursement programs, could have a material adverse effect on the operations and/or financial performance of the companies in which the Master Fund invests. The healthcare industry has been, and will likely continue to be, significantly impacted by legislative changes, and various U.S. federal, state or local or non-U.S. legislative proposals have been, and will be, introduced from time to time, which, if adopted, could have a significant impact on the healthcare industry in general and/or on companies in which the Master Fund may invest; The Master Fund may invest in the securities of healthcare companies engaged in the development of products or technologies or that are conducting clinical trials on products. Obtaining product approval often requires the submission of extensive preclinical and clinical data, information about product manufacturing processes, and inspection of facilities and supporting information for each therapeutic indication to establish a product candidate's safety and efficacy. Varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent regulatory approval of a product candidate. Spruce Street will generally rely on company provided information to make decisions about a company, including an expectation that companies will accurately state financial or

clinical results. Any error or misrepresentation in such information could negatively impact the financial condition of the company; Intellectual property rights in the fields of medical devices, diagnostics, pharmaceuticals and biotechnology are highly uncertain and may involve complex legal and scientific questions. Healthcare companies may not be able to obtain additional issued patents relating to their products, methods, processes, services or other technologies. Even if issued, patents may be challenged, narrowed, invalidated or circumvented, or others may obtain patents claiming aspects similar to those covered by such patents and patent applications, which factors could limit a company's ability to stop competitors from marketing similar products or services, limit the length of term of patent protection they may have for their products or services, and expose them to substantial costs and risks in litigation and administrative proceedings and drain resources. Changes in either patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of a company's intellectual property or narrow the scope of its patent protection; and The testing and marketing of medical products and technologies entail an inherent risk of product liability. Accordingly, companies in the healthcare industry may be exposed to potential liability risks inherent in the testing, manufacturing, marketing and sale of healthcare products and/or the provision of healthcare services. A liability claim or the imposition of liability may have an adverse effect on the market prices of a company's securities.

Investment and Trading Out of Sector The Master Fund may trade in sectors other than the life sciences and healthcare sector, including for hedging purposes and/or on an opportunistic basis. Further, the Master Fund's view of life sciences and healthcare may not align with standard industry classifications of the life sciences and healthcare sector. The profit or loss from those positions could have a material impact on the Master Fund's performance.

Micro-, Small- and Medium-Capitalization Companies Investments in securities of micro- and small-capitalization companies involve higher risks in some respects than do investments in securities of larger "blue-chip" companies. For example, prices of securities of microand small-capitalization and even medium-capitalization companies are often more volatile than prices of securities of large-capitalization companies and may not be based on standard pricing models that are applicable to securities of large-capitalization companies. Furthermore, the risk of bankruptcy or insolvency of many smaller companies (with the attendant losses to investors) may be higher than for larger, "blue-chip" companies. Finally, due to thin trading in the securities of some micro- and small-capitalization companies, an investment in those companies may be illiquid.

Risks Relating to Specific Investments Equity Securities Generally The value of equity securities of public and private, listed and unlisted companies and equity derivatives generally varies with the performance of the issuer and movements in the equity markets. As a result, the Master Fund may suffer losses if it invests in equity instruments of issuers whose performance diverges from Spruce Street 's expectations or if equity markets generally move in a single direction and the Master Fund has not hedged against such a general move. The Master Fund also may be exposed to risks that issuers will not fulfill contractual obligations such as, in the case of convertible securities or private placements, delivering marketable common stock upon conversions of convertible securities and registering restricted securities for public resale.

American Depositary Receipts and Global Depositary Receipts

American Depositary Receipts ("ADRs") are receipts issued by a U.S. bank or trust company evidencing ownership of underlying securities issued by non-U.S. issuers. ADRs may be listed on a national securities exchange or may be traded in the over-the-counter market. Global Depositary Receipts ("GDRs") are receipts issued by either a U.S. or non-U.S. banking institution representing ownership in a non-U.S. company's publicly traded securities that are traded on non-U.S. stock exchanges or non-U.S. over-the-counter markets. Holders of unsponsored ADRs or GDRs generally bear all the costs of such facilities. The depository of an unsponsored facility frequently is under no obligation to distribute investor communications received from the issuer of the deposited security or to pass through voting rights to the holders of depositary receipts in respect of the deposited securities. Investments in ADRs and GDRs pose, to the extent not hedged, currency exchange risks (including blockage, devaluation and non-exchangeability), as well as a range of other potential risks relating to the underlying shares, which could include expropriation, confiscatory taxation, imposition of withholding or other taxes on dividends, interest, capital gains, other income or gross sale of disposition proceeds, political or social instability or diplomatic developments that could affect investments in those countries, illiquidity, price volatility and market manipulation. In addition, less information may be available regarding the underlying shares of ADRs and GDRs, and non-U.S. companies may not be subject to accounting, auditing and financial reporting standards and requirements comparable to, or as uniform as, those of U.S. companies. Such risks may have a material adverse effect on the performance of such investments and could result in substantial losses.

Convertible Securities A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security's governing instrument. If a convertible security held by the Master Fund is called for redemption, the Master Fund will be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party. Any of these actions could have an adverse effect on the Master Fund's ability to achieve its investment objective.

Currencies A principal risk in trading currencies is the rapid fluctuation in the market prices of currency contracts. Prices of currency contracts traded by the Master Fund are affected generally by relative interest rates, which in turn are influenced by a wide variety of complex and difficult to predict factors such as money supply and demand, balance of payments, inflation levels, fiscal policy, and political and economic events. In addition, governments from time to time intervene, directly and by regulation, in these markets, with the specific effect, or intention, of influencing prices which may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations.

Debt Securities Debt securities of all types of issuers may have speculative characteristics, regardless of whether they are rated. The issuers of such instruments (including sovereign issuers) may face significant ongoing uncertainties and exposure to adverse conditions that may undermine the issuer's ability to make timely payment of interest and principal in accordance with the terms of the obligations.

Interest Rate Risk Changes in interest rates can affect the value of the Master Fund's investments in fixed-income instruments. Increases in interest rates may cause the value of the Master Fund's debt investments to decline. The Master Fund may experience increased interest rate risk to the extent it invests, if at all, in lower-rated instruments, debt instruments with longer maturities, debt instruments paying no interest (such as zero-coupon debt instruments) or debt instruments paying non-cash interest in the form of other debt instruments.

H igh-Yield Bonds or other fixed-income securities that are "higher yielding" (including non-investment grade) debt securities are generally not exchange-traded and, as a result, these securities trade in the over-thecounter marketplace, which is less transparent and has wider bid/ask spreads than the exchange-traded marketplace. High-yield securities face ongoing uncertainties and exposure to adverse business, financial or economic conditions, which could lead to the issuer's inability to meet timely interest and principal payments. High-yield securities are generally more volatile and may or may not be subordinated to certain other outstanding securities and obligations of the issuer, which may be secured by substantially all of the issuer's assets. High-yield securities may also not be protected by financial covenants or limitations on additional indebtedness. The market values of certain of these lower-rated and unrated debt securities tend to reflect individual corporate developments to a greater extent than do higher-rated securities, which react primarily to fluctuations in the general level of interest rates, and tend to be more sensitive to economic conditions than are higher-rated securities. Companies that issue such securities may be highly leveraged and may not have available to them more traditional methods of financing. In addition, the Master Fund may invest in bonds of issuers that do not have publicly traded equity securities, making it more difficult to hedge the risks associated with such investments. The Master Fund may invest in obligations of issuers that are generally trading at significantly higher yields than had been historically typical of the applicable issuer's obligations. Such investments may include debt obligations that have a heightened probability of being in covenant or payment default in the future or that are currently in default and are generally considered speculative. The repayment of defaulted obligations is subject to significant uncertainties. Defaulted obligations might be repaid only after lengthy workout or bankruptcy proceedings, during which the issuer might not make any interest or other payments. Typically, such workout or bankruptcy proceedings result only in partial recovery of cash payments or an exchange of the defaulted security for other debt or equity securities of the issuer or its affiliates, which may in turn be illiquid or speculative.

Corporate Debt Bonds, notes and debentures issued by corporations may pay fixed, variable or floating rates of interest, and may include zero-coupon obligations. Corporate debt instruments may be subject to credit ratings downgrades. Other instruments may have the lowest quality ratings or may be unrated. In addition, the Master Fund may be paid interest in kind in connection with its investments in corporate debt and related financial instruments (e.g., the principal owed to the Master Fund in connection with a debt investment may be increased by the amount of interest due on such debt investment). Such investments may experience greater market value volatility than debt obligations that provide for regular payments of interest in cash and, in the event of a default, the Master Fund may experience substantial losses.

Derivative Instruments Certain swaps, options and other derivative instruments may be subject to various types of risks, including market risk, liquidity risk, credit risk, legal risk and operations risk. The regulatory and tax environment for derivative instruments in which the Master Fund may participate is evolving, and changes in the regulation or taxation of such instruments may have a material adverse effect on the Master Fund.

Regulation in the Derivatives Industry There are many rules related to derivatives that may negatively impact the Master Fund, such as requirements related to recordkeeping, reporting, portfolio reconciliation, central clearing, minimum margin for uncleared over the counter ("OTC") instruments and mandatory trading on electronic

facilities, and other transaction-level obligations. Parties that act as dealers in swaps, are also subject to extensive business conduct standards, additional "know your counterparty" obligations, documentation standards and capital requirements. All of these requirements add costs to the legal, operational and compliance obligations of Spruce Street and the Master Fund, and increase, the amount of time that Spruce Street spends on non-investment-related activities. Requirements such as these also raise the costs of entering into derivative transactions, and these increased costs will likely be passed on to the Master Fund. These rules are operationally and technologically burdensome for Spruce Street and the Master Fund. These compliance obligations require employee training and use of technology, and there are operational risks borne by the Master Fund in implementing procedures to comply with many of these additional obligations. These regulations may also result in the Master Fund forgoing the use of certain trading counterparties (such as broker-dealers and futures commission merchants ("FCMs")), as the use of other parties may be more efficient for the Master Fund from a regulatory perspective. However, this could limit the Master Fund's trading activities, create losses, preclude the Master Fund from engaging in certain transactions or prevent the Master Fund from trading at optimal rates and terms. Many of these requirements were implemented under legislation intended to reform the U.S. financial regulatory system, the EU Regulation on OTC Derivatives, Central Counterparties and Trade Repositories (known as the European Market Infrastructure Regulation, or "EMIR"), and similar regulations globally. In the United States, regulatory responsibility for derivatives is divided between the SEC and the CFTC, a distinction that does not exist in any other jurisdiction. The SEC has regulatory authority over "security-based swaps" and the CFTC has regulatory authority over "swaps". EMIR is being implemented in phases through the adoption of delegated acts by the European Commission. As a result of the SEC and CFTC bifurcation and the different pace at which the SEC, the CFTC, the European Commission and other international regulators have promulgated necessary regulations, different transactions are subject to different levels of regulation. Though many rules and regulations have been finalized, there are others, particularly SEC regulations with respect to securitybased swaps, that are still in the proposal stage or are expected to be introduced in the future. The following describes derivatives regulations that may have the most significant impact on the Master Fund:

Reporting Most swap transactions have become subject to anonymous "real time reporting" requirements, meaning that information relating to transactions entered into by the Master Fund will become visible to the market in ways that may impair the Master Fund's ability to enter into additional transactions at comparable prices or could enable competitors to "front run" or replicate the Master Fund's strategies.

Central Clearing In order to mitigate counterparty risk and systemic risk in general, various U.S. and international regulatory initiatives, including EMIR, are underway to require certain derivatives to be cleared through central clearinghouses. In the United States, clearing mandates affect certain interest rate and credit default swaps. The CFTC and the SEC may introduce clearing requirements for additional classes of derivatives in the future. EMIR also requires OTC derivatives contracts meeting specific criteria to be cleared through central counterparties.

While such clearing requirements may be beneficial for the Master Fund in many respects (for instance, they may reduce the counterparty risk to the dealers to which the Master Fund would be exposed under non-cleared derivatives), the Master Fund could be exposed to new risks, such as the risk that an increasing percentage of derivatives will be required to be standardized and/or cleared through central clearinghouses, and, as a result, the Master Fund may not be able to hedge its risks or express an investment view as well as it would have been able to had it used customizable derivatives available in the over-the-counter markets. The Master Fund may have to split its derivatives portfolio between centrally cleared and over-the-counter derivatives, which may result in operational inefficiencies and an inability to offset risk between centrally cleared and over-the-counter positions, and which could lead to increased costs. Another risk is that the Master Fund may be subject to more onerous and more frequent (daily or even intraday) margin calls from both the Master Fund's FCM and the clearinghouse. Virtually all margin models utilized by the clearinghouses are dynamic, meaning that unlike traditional bilateral swap contracts where the amount of initial margin posted on the contract is typically static throughout the life of the contract, the amount of the initial margin that is required to be posted in respect of a cleared contract will fluctuate, sometimes significantly, throughout the life of the contract. The dynamic nature of the margin models utilized by the clearinghouses and the fact that the margin models might be changed at any time may subject the Master Fund to an unexpected increase in collateral obligations by clearinghouses during a volatile market environment, which could have a detrimental effect on the Master Fund. Clearinghouses also limit collateral that they will accept to cash, U.S. treasuries and, in some cases, other highly rated sovereign and private debt instruments, which may require the Master Fund to borrow eligible securities from a dealer to meet margin calls and raise the costs of cleared trades to the Master Fund. In addition, clearinghouses may not allow the Master Fund to portfolio-margin its positions, which may increase the Master Fund's costs. Although standardized clearing for derivatives is intended to reduce counterparty risk (for instance, it may reduce the counterparty risk to the dealers to which the Master Fund would have been exposed under OTC derivatives), it does not eliminate risk. Derivatives clearing may also lead to concentration of counterparty risk, namely in the clearinghouse and the Master Fund's FCM, subjecting the Master Fund to the risk that the assets of the FCM are insufficient to satisfy all of the FCM's payment obligations, leading to a payment default. The failure of a clearinghouse or FCM could have a significant impact on the financial system. Even if a clearinghouse does not fail, large losses could force significant capital calls on FCMs during a financial crisis, which could lead FCMs to default and thus worsen the crisis.

Swap Execution Facilities In addition to the central clearing requirement, certain swap transactions are required to trade on regulated electronic platforms such as swap execution facilities ("SEFs"), which require the Master Fund to subject itself to regulation by these venues and subject the Master Fund to the jurisdiction of the CFTC. CFTC rules governing the operation of SEF's continue to evolve; the SEC has yet to finalize rules related to security-based SEFs. The EU regulatory framework governing derivatives is set not only by EMIR but also a legislative package known as a recast of the Markets in Financial Instruments Directive ("MiFID II"). Among other things, MiFID II requires transactions in derivatives to be executed on regulated trading venues. It is not clear whether these trading venues will benefit or impede liquidity, or how they will fare in times of market stress. Trading on these trading venues may increase the pricing discrepancy between assets and their hedges as products may not be able to be executed simultaneously, therefore increasing basis risk. It may also become relatively expensive for the

Master Fund to obtain tailored swap products to hedge particular risks in its portfolio due to higher collateral requirements on bilateral transactions as a result of these regulations.

Margin Requirements for Non-Cleared Swaps Rules issued by U.S., EU and other regulators globally (the "Margin Rules") impose various margin requirements on all swaps that are not centrally cleared, including the establishment of minimum amounts of initial margin that must be posted, and, in some cases, the mandatory segregation of initial margin with a third-party custodian. Although the Margin Rules are intended to increase the stability of the derivatives market, the overall amount of margin that the Master Fund will be required to post to swap counterparties may increase by a material amount, and as a result the Master Fund may not be able to deploy capital as effectively. Additionally, to the extent the Master Fund is required to segregate initial margin with a thirdparty custodian, additional costs will be incurred by the Master Fund.

Call and Put Options The Master Fund may incur risks associated with the sale and purchase of call options and put options. Under a conventional cash-settled option, the purchaser of the option pays a premium in exchange for the right to receive upon exercise of the option (i) in the case of a call option, the excess, if any, of the reference price or value of the underlier (as determined pursuant to the terms of the option) above the option's strike price or (ii) in the case of a put option, the excess, if any, of the option's strike price above the reference price or value of the underlier (as so determined). Under a conventional physically settled option structure, the purchaser of a call option has the right to purchase a specified quantity of the underlier at the strike price, and the purchaser of a put option has the right to sell a specified quantity of the underlier at the strike price. A purchaser of an option may suffer a total loss of premium (plus transaction costs) if that option expires without being exercised. An option's time value (i.e., the component of the option's value that exceeds the in-the-money amount) tends to diminish over time. Even though an option may be in-themoney to the purchaser at various times prior to its expiration date, the purchaser's ability to realize the value of an option depends on when and how the option may be exercised. For example, the terms of the transaction may provide for the option to be exercised automatically if it is in-the-money on the expiration date. Conversely, the terms may require timely delivery of a notice of exercise, and exercise may be subject to other conditions (such as the occurrence or non-occurrence of certain events, such as knock-in, knock-out or other barrier events) and timing requirements, including the "style" of the option. Uncovered option writing (i.e., selling an option when the seller does not own a like quantity of an offsetting position in the underlier) exposes the seller to potentially significant loss. The potential loss of uncovered call writing is unlimited. The seller of an uncovered call may incur large losses if the reference price or value of the underlier increases above the exercise price by more than the amount of any premiums earned. As with writing uncovered calls, the risk of writing uncovered put options is substantial. The seller of an uncovered put option bears a risk of loss if the reference price or value of the underlier declines below the exercise price by more than the amount of any premiums earned. Such loss could be substantial if there is a significant decline in the value of the underlier.

Index or Index Options The value of an index or index option fluctuates with changes in the market values of the assets included in the index. Because the value of an index or index option depends upon movements in the level of the index rather than the price of a particular asset, whether the Master Fund will realize

appreciation or depreciation from the purchase or writing of options on indices depends upon movements in the level of instrument prices in the assets generally or, in the case of certain indices, in an industry or market segment, rather than movements in the price of particular assets.

Index Futures The price of index futures contracts may not correlate perfectly with the movement in the underlying index because of certain market distortions. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, participants may close futures contracts through offsetting transactions that would distort the normal relationship between the index and futures markets. Second, from the point of view of speculators, the deposit requirements in the futures market are less onerous than margin requirements in the securities market. Therefore, increased participation by speculators in the futures market also may cause price distortions. Successful use of index futures contracts by the Master Fund also is subject to Spruce Street's ability to correctly predict movements in the direction of the market. Credit Default Swaps Credit default swaps can be used to implement Spruce Street's view that a particular credit, or group of credits, will experience credit improvement or deterioration. In the case of expected credit improvement, the Master Fund may sell credit default protection in which it receives a premium to take on the risk. In such an instance, the obligation of the Master Fund to make payments upon the occurrence of a credit event creates leveraged exposure to the credit risk of the referenced entity. The Master Fund may also buy credit default protection with respect to a referenced entity if, in Spruce Street's judgment, there is a high likelihood of credit deterioration. In such instance, the Master Fund will pay a premium regardless of whether there is a credit event.

Futures Contracts The value of futures contracts depends upon the price of the Securities, such as commodities, underlying them. The prices of futures contracts are highly volatile, and price movements of futures contracts can be influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, as well as national and international political and economic events and policies. In addition, investments in futures contracts are also subject to the risk of the failure of any of the exchanges on which the Master Fund's positions trade or of its clearing houses or counterparties. Futures positions may be illiquid because certain commodity exchanges limit fluctuations in certain futures contract prices during a single day by regulations referred to as "daily price fluctuation limits" or "daily limits". Under such daily limits, during a single trading day no trades may be executed at prices beyond the daily limits. Once the price of a particular futures contract has increased or decreased by an amount equal to the daily limit, positions in that contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. This could prevent the Master Fund from promptly liquidating unfavorable positions and subject the Master Fund to substantial losses or prevent it from entering into desired trades. Also, low margin or premiums normally required in such trading may provide a large amount of leverage, and a relatively small change in the price of a security or contract can produce a disproportionately larger profit or loss. In extraordinary circumstances, a futures exchange or the CFTC could suspend trading in a particular futures contract, or order liquidation or settlement of all open positions in such contract.

Non-U.S. Futures Transactions

Foreign futures transactions involve executing and clearing trades on a foreign exchange. This is the case even if the foreign exchange is formally "linked" to a domestic exchange, whereby a trade executed on one exchange liquidates or establishes a position on the other exchange. No domestic organization regulates the activities of a foreign exchange, including the execution, delivery, and clearing of transactions on such an exchange, and no domestic regulator has the power to compel enforcement of the rules of the foreign exchange or the laws of the foreign country. Moreover, such laws or regulations will vary depending on the foreign country in which the transaction occurs. For these reasons, the Master Fund may not be afforded certain of the protections which apply to domestic transactions, including the right to use domestic alternative dispute resolution procedures. In particular, funds received from customers to margin foreign futures transactions may not be provided the same protections as funds received to margin futures transactions on domestic exchanges. In addition, the price of any foreign futures or option contract and, therefore, the potential profit and loss resulting therefrom, may be affected by any fluctuation in the foreign exchange rate between the time the order is placed and the time the foreign futures contract is liquidated or the time the foreign option contract is liquidated or exercised.

Forward Contracts The Master Fund may enter into forward contracts and options thereon, including non-deliverable forwards. The principals who deal in the forward contract market are not required to continue to make markets in such contracts. There have been periods during which certain participants in forward markets have refused to quote prices for forward contracts or have quoted prices with an unusually wide spread between the price at which they were prepared to buy and that at which they were prepared to sell. The imposition of credit controls or price risk limitations by governmental authorities may limit such forward trading to less than that which Spruce Street would otherwise recommend, to the possible detriment of the Master Fund. In its forward trading, the Master Fund will be subject to the risk of the failure of, or the inability or refusal to perform with respect to its forward contracts by, the principals with which the Master Fund trades. Master Fund assets on deposit with such principals will also generally not be protected by the same segregation requirements imposed on certain regulated brokers in respect of customer funds on deposit with them. Spruce Street may order trades for the Master Fund in such markets through agents. Accordingly, the insolvency or bankruptcy of such parties could also subject the Master Fund to the risk of loss.

Contracts for Differences Contracts for differences ("CFDs") are privately negotiated contracts between two parties, buyer and seller, stipulating that the seller will pay to or receive from the buyer the difference between the nominal value of the underlying instrument at the opening of the contract and that instrument's value at the end of the contract. The underlying instrument may be a single security, stock basket or index. A CFD can be set up to take either a short or long position on the underlying instrument. The buyer and seller are both required to post margin, which is adjusted daily. The buyer will also pay the seller a financing rate on the notional amount of the capital employed by the seller less the margin deposit. As is the case with trading any financial instrument, there is the risk of loss associated with trading a CFD. There may be liquidity risk if the underlying instrument is illiquid because the liquidity of a CFD is based on the liquidity of the underlying instrument. A further risk is that adverse movements in the underlying security will require the posting of additional margin. CFDs also carry counterparty risk, i.e., the risk that the counterparty to the CFD transaction may be unable or unwilling to make payments or to otherwise honor its financial obligations under the terms of the contract. If the counterparty were to do so, the value of the contract may be reduced. Entry into a CFD transaction may, in certain circumstances, require the payment of an initial margin and adverse market movements against the underlying stock may require additional margin payments. CFDs may be considered illiquid. To the extent that there is an imperfect correlation between the return on the Master Fund's obligation to its

counterparty under the CFDs and the return on related assets in its portfolio, the CFD transaction may increase the Master Fund's financial risk.

Failure to Enter into Offsetting Trade To the extent the Master Fund invests in a futures contract or long option, unless an offsetting trade is made, the Master Fund will be required to take physical delivery of the commodity underlying the future or option. To the extent Spruce Street fails to enter into such offsetting trade prior to the expiration of the contract, the Master Fund may suffer a loss since neither the Master Fund nor Spruce Street has the operational capacity to accept physical delivery of commodities.

Exotic Options Exotic options are typically, but not always, traded over the counter. OTC contracts may not trade in a liquid market and pricing may be opaque. The illiquidity of these markets can be exacerbated in times of market stress. The Master Fund may incur substantial costs entering into and exiting positions that could have a material impact on performance. Exotic options may be subject to a higher degree of pricing risk as demonstrated by instances in which different counterparties in the market employ different valuation and pricing methodologies to the same exotic option. Because exotic options can often be highly customized, there is lower visibility with respect to the pricing and valuation of these instruments. Exotic options may be subject to high levels of price volatility. For example, in the case of barrier options, as the price of the asset underlying the option trades closer to a barrier level, the delta of the option (i.e., the ratio of the change in the price of the underlying asset to the corresponding change in the price of the option) and the gamma of the option (i.e., the rate of change of the delta with respect to the underlying asset's price) may become very high. Exotic options may be subject to higher levels of model risk than commonly traded options because standard models are not able to adequately capture or predict the risks associated with the exotic options. Exotic options may be "path dependent". This means that their terminal value (at exercise or expiration) depends upon the value of the underlying asset, not only at the time of exercise or expiration, but also at prior points in time. In this sense, the option's terminal value depends upon the "path" taken by the underlying asset over the life of the option. For example, a barrier option's value at expiration depends upon both the value of the underlying asset at expiration and whether the past value of the underlying asset ever satisfied a barrier condition. In contrast, a vanilla option (e.g., a call option) is not path dependent. Its value at exercise or expiration depends on the value of the underlying asset only at that point in time. The additional features incorporated by exotic options require additional judgments regarding the likelihood of certain conditions being satisfied, any one of which can result in loss if made incorrectly. An OTC option may be closed out only with the counterparty, although either party may engage in an offsetting transaction that puts that party in the same economic position as if it had closed out the option with the counterparty; however, the exposure to counterparty risk may differ. OTC options generally involve greater credit and counterparty risk than exchange-traded options.

Exchange-Traded Funds Exchange-traded funds ("ETFs") are publicly traded unit investment trusts, open-end funds or depository receipts that seek to track the performance and dividend yield of specific indexes or companies in related industries. These indexes may be either broad-based, sector or international. However, ETF shareholders are generally subject to the same risk as holders of the underlying Securities they are designed to track. ETFs are also subject to certain additional risks, including the risk that their prices may not correlate perfectly with changes in the prices of the underlying Securities they are designed to track, and the risk of trading in an ETF halting due to market conditions or other reasons, based on the policies of the exchange upon which the ETF trades. Generally, each shareholder of an ETF bears a pro rata portion of the ETF's expenses, including management fees. Accordingly, in addition to bearing their proportionate share of the Master Fund's expenses

(e.g., Management Fees and operating expenses), Limited Partners may also indirectly bear similar expenses of an ETF.

Illiquid Securities Certain Securities may be illiquid because, for example, they are subject to legal or other restrictions on transfer or there is no liquid market for such Securities. Valuation of such Securities may be difficult or uncertain because there may be limited information available about the issuers of such Securities. The market prices, if any, for such Securities tend to be volatile and may not be readily ascertainable, and the Master Fund may not be able to sell them when it desires to do so or to realize what it perceives to be their fair value in the event of a sale. The sale of restricted and illiquid Securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of Securities eligible for trading on national securities exchanges or in the over-the-counter markets. The Master Fund may not be able to readily dispose of such illiquid investments and, in some cases, may be contractually prohibited from disposing of such investments for a specified period of time. As a result, the Master Fund may be required to hold such Securities despite adverse price movements. Even those markets which Spruce Street expects to be liquid can experience periods, possibly extended periods, of illiquidity. Occasions have arisen in the past where previously liquid investments have rapidly become illiquid.

Initial Public Offerings Investments in initial public offerings (or shortly thereafter) may involve higher risks than investments issued in secondary public offerings or purchases on a secondary market due to a variety of factors, including the limited number of shares available for trading, unseasoned trading, lack of investor knowledge of the issuer and limited operating history of the issuer. In addition, some companies in initial public offerings are involved in relatively new industries or lines of business, which may not be widely understood by investors. Some of these companies may be undercapitalized or regarded as developmental stage companies, without revenues or operating income, or the near-term prospects of achieving them. These factors may contribute to substantial price volatility for such securities and, thus, for the value of the Feeder Funds' Interests.

Mutual Fund Investments Investments in open-end as well as closed-end mutual funds generally involve the payment of duplicative fees through the indirect payment of a portion of the expenses, including advisory fees, of such mutual funds. Investments in mutual funds will be valued at the net asset values provided by those funds (which may in certain circumstances be unaudited valuations). Such investments may cause the expense of investing in the Feeder Funds to be greater than an investment in other investment vehicles.

Preferred Stock Investments in preferred stock involve risks related to priority in the event of bankruptcy, insolvency or liquidation of the issuing company and how dividends are declared. Preferred stock ranks junior to debt securities in an issuer's capital structure and, accordingly, is subordinate to all debt in bankruptcy. Preferred stock generally has a preference as to dividends. Such dividends are generally paid in cash (or additional shares of preferred stock) at a defined rate, but unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer's board of directors. Dividends on preferred stock may be cumulative, meaning that, in the event the issuer fails to make one or more dividend payments on the preferred stock, no dividends may be paid on the issuer's common stock until all unpaid preferred stock dividends have been paid. Preferred stock may also be subject to optional or mandatory redemption provisions.

Private Equity Investments

Risk of Early-Stage Companies Investments in the private equity of companies at an early stage of development involves a high degree of business and financial risk. Early-stage companies with little or no operating history may require substantial additional capital to support expansion or to achieve or maintain a competitive position, may produce substantial variations in operating results from period to period or may operate at a loss. Such companies may face intense competition, including competition from companies with greater financial resources, more extensive development, better marketing and service capabilities and a larger number of qualified management and technical personnel. Such risks may adversely affect the performance of such investments and result in substantial losses.

Control Issues Although Spruce Street may seek protective provisions, including, possibly, board representation, in connection with certain of its private equity investments, to the extent the Master Fund takes minority positions in companies in which it invests, Spruce Street may not be in a position to exercise control over the management of such companies, and, accordingly, may have a limited ability to protect its position in such companies.

H ighly Leveraged Companies Investments in private equity of highly leveraged companies involve a high degree of risk. The use of leverage may increase the exposure of such companies to adverse economic factors such as downturns in the economy or deterioration in the conditions of such companies or their respective industries. In the event any such company cannot generate adequate cash flow to meet debt service, the Master Fund may suffer a partial or total loss of capital invested in the company, which, depending on the size of the Master Fund's investments, could adversely affect the return on the capital of the Master Fund.

Repurchase and Reverse Repurchase Agreements In a reverse repurchase transaction, the Master Fund "buys" securities issued from a broker-dealer or financial institution, subject to the obligation of the broker-dealer or financial institution to repurchase such securities at the price paid by the Master Fund, plus interest at a negotiated rate. The use of repurchase and reverse repurchase agreements by the Master Fund involves certain risks. For example, if the seller of securities to the Master Fund under a reverse repurchase agreement defaults on its obligation to repurchase the underlying securities, as a result of its bankruptcy or otherwise, the Master Fund will seek to dispose of such securities, which action could involve costs or delays. If the seller becomes insolvent and subject to liquidation or reorganization under applicable bankruptcy or other laws, the Master Fund's ability to dispose of the underlying securities may be restricted. It is possible, in a bankruptcy or liquidation scenario, that the Master Fund may not be able to substantiate its interest in the underlying securities. Finally, if a seller defaults on its obligation to repurchase securities under a reverse repurchase agreement, the Master Fund may suffer a loss to the extent that it is forced to liquidate its position in the market, and proceeds from the sale of the underlying securities are less than the repurchase price agreed to by the defaulting seller. Similar elements of risk arise in the event of the bankruptcy or insolvency of the buyer.

Restricted Securities Restricted securities cannot be sold to the public without registration under the Securities Act. Unless registered for sale, restricted securities can be sold only in privately negotiated transactions or pursuant to an exemption from registration (e.g., under Rule 144A of the Securities Act). Although these securities may be resold in privately negotiated transactions, because there is often little liquidity for these securities, they may be difficult and take a substantial amount of time to sell, and the prices realized from these sales could be less than those

originally paid by the Master Fund. Restricted securities may involve a high degree of business and financial risk which may result in substantial losses.

PIPE Transactions The Master Fund may invest in private investments in public companies that have stocks which are quoted on stock exchanges or which trade in the over-the-counter securities market, a type of investment commonly referred to as a "PIPE" transaction, will generally result in the Master Fund acquiring stock which will be restricted for a period of time following issuance. As with investments in other types of restricted securities, such an investment may be illiquid until registered under the Securities Act and the Master Fund's ability to dispose of securities acquired in PIPE transactions may depend on the registration of such securities for resale. Any number of factors may prevent or delay a proposed registration, which typically occurs 30 to 90 days following issuance. Alternatively, it may be possible for securities acquired in a PIPE transaction to be resold in transactions exempt from registration in accordance with Rule 144 under the Securities Act, or otherwise under the U.S. federal securities laws. Further, even if the Master Fund is able to have securities acquired in a PIPE transaction registered or sell such securities through an exempt transaction, the Master Fund may not be able to sell all the securities on short notice if there is not an active market for such stock, and the sale of the securities could lower the market price of the securities. There is no guarantee that an active trading market for the securities will exist at the time of disposition of the securities, and the lack of such a market could hurt the market value of the Master Fund's investments.

Special Purpose Acquisition Companies A special purpose acquisition company (a "SPAC") is a publicly traded company formed for the purpose of raising capital through an initial public offering to fund the acquisition, through a merger, capital stock exchange, asset acquisition or other similar business combination, of one or more undervalued operating businesses. Following the acquisition of a target company, a SPAC typically would exercise control over the management of such target company in an effort to increase the value of such target company. Capital raised through the initial public offering of securities of a SPAC is typically placed into a trust until the target company is acquired or a predetermined period of time elapses. Investors in a SPAC would receive a return on their investment in the event that a target company is acquired and such target company's value increased. In the event that a SPAC is unable to locate and acquire target companies by the deadline, the SPAC would be forced to liquidate its assets, which may result in losses due to the expenses and liabilities of the SPAC. Investors in a SPAC are subject to the risk that, among other things, (i) such SPAC may not be able to locate or acquire target companies by the deadline, (ii) assets in the trust may be subject to third-party claims against such SPAC, which may reduce the per share liquidation price received by the investors in the SPAC, (iii) such SPAC may be exempt from the rules promulgated by the SEC to protect investors in "blank check" companies, such as Rule 419 promulgated under the Securities Act, so that investors in such SPAC may not be afforded the benefits or protections of those rules, (iv) such SPAC may only be able to complete one business combination, which may cause it to be solely dependent on a single business, (v) the value of any target company may decrease following its acquisition by such SPAC, (vi) the value of the funds invested and held in the trust decline, (vii) the inability to redeem due to the failure to hold the securities in the SPAC on the record date or the failure to vote against the acquisition and (viii) if the SPAC is unable to consummate a business combination, public stockholders will be forced to wait until the deadline before liquidating distributions are made. In addition, most SPACs are illiquid and have a concentrated shareholder base that tends to be comprised of hedge funds (at least at inception). The Master Fund may invest in a SPAC that, at the time of investment, has not selected or approached any prospective target businesses with respect to a business combination. In such circumstances, there may be limited basis for the Master Fund to evaluate the possible merits or risks of such SPAC's investment in any particular target business. To the extent that a SPAC completes a business combination, it may be affected by numerous risks inherent in the business operations of the acquired company or companies. For these and additional reasons, investments in SPACs are speculative and involve a high degree of risk.

Undervalued Securities The identification of investment opportunities in undervalued securities is a difficult task, and there are no assurances that such opportunities will be successfully recognized or acquired. While investments in undervalued securities offer the opportunity for above-average capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses. Returns generated from the Master Fund's investments may not adequately compensate for the business and financial risks assumed.

Unlisted Securities Unlisted securities may involve higher risks than listed securities. Because of the absence of any trading market for unlisted securities, it may take longer to liquidate, or it may not be possible to liquidate positions in unlisted securities than would be the case for publicly traded securities. Companies whose securities are not publicly traded may not be subject to public disclosure and other investor protection requirements applicable to publicly traded securities.

When-Issued and Forward Commitment Securities The purchase of securities on a "when-issued" basis involves a commitment by the Master Fund to purchase or sell securities at a future date (typically one or two months later). No income accrues on securities that have been purchased on a when-issued basis prior to delivery to the Master Fund. When-issued securities may be sold prior to the settlement date. If the Master Fund disposes of the right to acquire a when-issued security prior to its acquisition, it may incur a gain or loss. In addition, there is a risk that securities purchased on a when-issued basis may not be delivered to the Master Fund. In such cases, the Master Fund may incur a loss. Risks Relating to Non-U.S. Investments and Non-U.S. Jurisdictions

Non-U.S. Exchanges The Master Fund may trade on exchanges or markets located outside the U.S. Trading on such exchanges or markets is not regulated by the SEC and the CFTC and may, therefore, be subject to more risks than trading on U.S. exchanges, such as the risks of exchange controls, expropriation, burdensome taxation, moratoria and political or diplomatic events. Risks in investments in non-U.S. Securities may also include reduced and less reliable information about issuers and markets, less stringent accounting standards, illiquidity of securities and markets, higher brokerage commissions and custody fees.

Non-U.S. Investments Investing in the Securities of companies (and, from time to time, governments) outside of the United States involves certain considerations not usually associated with investing in Securities of U.S. companies or the U.S. government, including political and economic considerations, such as greater risks of expropriation, nationalization, confiscatory taxation, imposition of withholding or other taxes on interest, dividends, capital gains, other income or gross sale or disposition proceeds, limitations on the removal of assets and general social, political and economic instability; the relatively small size of the securities markets in such countries and the low volume of trading, resulting in potential lack of liquidity and in price volatility; the evolving and unsophisticated laws and regulations applicable to the securities and financial services industries of certain countries; fluctuations in the rate of exchange between currencies and costs associated with currency conversion; and certain government policies that may restrict the Master Fund's investment opportunities. In addition, accounting and financial reporting standards that prevail outside of the U.S. generally are not as high as U.S. standards and, consequently, less information is typically available concerning companies located outside of the U.S. than for those located in the U.S. As a result, the Master Fund may be unable to structure its transactions to achieve the intended results or to mitigate all risks associated with such markets. It may also be

difficult to enforce the Master Fund's rights in such markets. For example, Securities traded on non-U.S. exchanges and the non-U.S. persons that trade these instruments are not subject to the jurisdiction of the SEC or the CFTC or the securities and commodities laws and regulations of the U.S. Accordingly, the protections accorded to the Master Fund under such laws and regulations are unavailable for transactions on non-U.S. exchanges and with non-U.S. counterparties.

Investment in Emerging Markets Investing in the Securities of companies (and, from time to time, governments) in emerging markets, specifically, involves additional risks and special considerations not typically associated with investing in more established economies or markets. Such risks may include, in addition to the risks listed above in connection with non-U.S. investments generally, some if not all of which are heightened in the case of investments in emerging markets: higher dependence on exports and the corresponding importance of international trade; greater risk of substantial inflation; greater controls on foreign investment and preferential treatment for particular domestic industries or companies or other protectionist acts; increased likelihood of governmental involvement in and control over the economy; governmental decisions to cease support of economic reform programs or to impose centrally planned economies; longer settlement periods for transactions and less reliable clearance and custody arrangements; and less developed corporate laws regarding fiduciary duties of officers and directors and the protection of investors. In addition, both the independence of judicial systems and their immunity from economic, political or nationalistic influences remain largely untested in many emerging markets countries, and the tax systems of some emerging market economies have been marked by rapid change, which has sometimes occurred without warning and has been applied with retroactive effect, and in some cases, there is widespread non-compliance with tax laws, insufficient personnel to deal with the problem and inconsistent enforcement of the laws by inexperienced tax inspectors. All of such risk factors could potentially affect the Master Fund's ability to conduct effective due diligence in connection with its investments and to monitor investments or otherwise impact returns on any such investment.

Dependence on Developing Countries The level of commodity prices can fluctuate widely due to supply and demand disruptions in major producing or consuming regions. In particular, recent growth in industrial production and gross domestic product has made many developing countries, particularly China, disproportionately large users of commodities and has increased the extent to which commodity prices are dependent on the markets of those developing countries. Political, economic and other developments that affect these developing countries may affect the level of certain commodities and, thus, the value of the Master Fund's investments. Because certain commodities may be produced in a limited number of countries and may be controlled by a small number of producers, political, economic and supply-related events in those countries could have a disproportionate impact on the prices of commodity futures contracts and other types of financial instruments in which the Master Fund will invest. Events affecting the prices of commodities tend to affect prices worldwide, regardless of the location of the event.

H andling of Mail Mail addressed to the Feeder Funds and received at its registered office will be forwarded unopened to the forwarding address supplied by the Feeder Funds to be dealt with. None of the Feeder Funds, the General Partner or any of its or their directors, officers, advisors or service providers (including the organization which provides registered office services in the Cayman Islands) will bear any responsibility for any delay howsoever caused in mail reaching the forwarding address. In particular the managers or officers of the General Partner will only receive, open or deal directly with mail which is addressed to them personally (as opposed to mail which is addressed just to the Feeder Funds).

Employees must at all times place the interests of the Clients first; Employees must ensure that all personal securities transactions are conducted consistently with the Code of Ethics’ Employee Personal Investment Policy (described below); and Employees should not take inappropriate advantage of their position at the Firm.

Employees are generally prohibited from participating in Initial Public Offerings (“IPOs”). Employees are a prohibited from personally, or on behalf of a Client, purchasing or selling securities that appear on the Firm’s Restricted List. Employees must obtain pre-approval from the CCO before: (i) engaging in any outside business activities; (ii) making any private investments; (iii) making political contributions or (iv) engaging in transactions in covered securities. We will provide a copy of our Code of Ethics to our Investors, or any prospective investor, upon request, to be viewed on the premises.

financing and securities on loan, hold cash and short balances and provide other services, Spruce Street may consider, among other factors that are deemed appropriate to consider under the circumstances, the following: the ability of the brokers and dealers to effect the transaction; the brokers' or dealers' facilities, reliability and financial responsibility; and the provision by the brokers of capital introduction, talent introduction, marketing assistance, consulting with respect to technology, operations and equipment, commitment of capital, access to company management and access to deal flow. Accordingly, the prices and commission rates (or dealer markups and markdowns arising in connection with riskless principal transactions) charged to the Master Fund by brokers or dealers in the foregoing circumstances may be higher than those charged by other brokers or dealers that may not offer such services. Spruce Street need not solicit competitive bids and does not have an obligation to seek the lowest available commission cost or spread. Generally, neither Spruce Street nor the Master Fund separately compensates any broker or dealer for any of these other services.

Research and Other Soft Dollar Benefits Although it does not currently intend to do so, Spruce Streer may pay a broker-dealer commissions (or markups or markdowns with respect to certain types of riskless principal transactions) for effecting Master Fund transactions in excess of that which another broker-dealer might have charged for effecting the transaction in recognition of the value of the brokerage and research services provided by the broker-dealer. If Spruce Street does decide in the future to utilize soft dollars, Spruce Street will effect such transactions, and receive such brokerage and research services, only to the extent that they fall within the safe harbor provided by Section 28(e) of the Exchange Act and subject to prevailing guidance provided by the SEC regarding Section 28(e). Spruce Streets believes it is important to its investment decision-making processes to have access to independent research. Also, consistent with Section 28(e), research products or services obtained with "soft dollars" generated by the Master Fund may be used by Spruce Street to service one or more Other Accounts, including Accounts that may not have paid for the soft dollar benefits. Spruce Street will not seek to allocate soft dollar benefits to Accounts in proportion to the soft dollar credits the Accounts generate. Where a product or service obtained with soft dollars provides both research and non-research assistance to Spruce Street (i.e., a "mixed use" item), Spruce Street will make a good faith allocation of the cost which may be paid for with soft dollars. In making good faith allocations of costs between administrative benefits and research and brokerage services, a conflict of interest may exist by reason of Spruce Street’s allocation of the costs of such benefits and services between those that primarily benefit Spruce Street and those that primarily benefit the Accounts.

Aggregation of Orders If Spruce Street determines that the purchase or sale of a Security is appropriate with regard to the Master Fund and any Other Accounts, Spruce Street may, but is not obligated to, purchase or sell such a Security on behalf of such Accounts with an aggregated order, for the purpose of reducing transaction costs, to the extent permitted by applicable law. When an aggregated order is filled through multiple trades at different prices on the same day, each participating Account will receive the average price, with transaction costs generally allocated pro rata based on the size of each Account's participation in the order (or allocation in the event of a partial fill) as determined by Spruce Street. In the event of a partial fill, allocations may be modified on a basis that Spruce Street deems to be appropriate, including, for example, in order to avoid odd lots or de minimis allocations. When orders are not aggregated, trades generally will be processed in the order that they are placed with the broker or counterparty selected by Spruce Street. As a result, certain trades in the same Security for one Account (including an Account in which Spruce Street and its personnel may have a direct or indirect interest) may receive more or less favorable prices or terms than another account, and orders placed later may not be filled entirely or at all, based upon the prevailing market prices at the time of the order or trade. In addition, some opportunities for reduced transaction costs and economies of scale may not be achieved.

However, it will not be required to comply (or will be deemed to have complied) with certain requirements of the Custody Rule with respect to the Feeder Funds because it will comply with the provisions of the so-called "Pooled Vehicle Annual Audit Exception", which, among other things, requires that the Feeder Funds be subject to audit at least annually by an independent public accountant that is registered with, and subject to regular inspection by, the Public Company Accounting Oversight Board, and requires that each Feeder Fund distribute its audited financial statements to all investors within 120 days of the end of its Fiscal Year.

Additionally, the Company does not disclose the way it voted proxies to unaffiliated third parties without a legitimate need to know such information.