EFTA01451593

SOF III - 1081 Southern Financial LLC Section 7: Summary of Terms and Conditions Secondary Opportunities Fund III. LP Diversification Indebtedness Hedging Absent the consent of the Fund Advisory Committee and following the Final Admission Date (i) no more than 5% of the aggregate Commitments will be invested in any single Co- Investment, (ii) no more than 20% of the aggregate Commitments will be invested in any single Fund Secondary or Direct Secondary and (iii) no more than 15% of the aggregate Commitments invested in Co-Investments will be made on a primary basis. The Fund, either directly or through intermediate holding vehicles under its control, is expected to borrow on a short-term basis in order to facilitate the closing of an investment in advance of a drawdown. The Manager generally expects such borrowings to be outstanding for less than 180 days. The Fund, either directly or through intermediate holding vehicles under its control, is also expected to borrow on a short-term basis in order to fund the payment of the Fund's expenses or the General Partners Share in advance of a drawdown. The Manager generally expects to repay such borrowings from drawdowns or distributions from investments. The Fund, either directly or through intermediate holding vehicles under its control. may also borrow on a long-term basis to create leveraged capital structures in portfolio investments with appropriate cash flow characteristics. The Fund will not borrow for such purpose amounts that in aggregate exceed 25% of the aggregate Commitments. Assets of the Fund may be posted as collateral against such borrowings including its investments, and by pledges of unfunded Commitments. Such borrowings may be incurred on a portfolio-wide basis or against specific securities and may be secured by drawdowns of Commitments. The Fund may engage in hedging transactions. such as hedging for currency. interest rate and equity market risks. Hedging techniques could involve a variety of derivative transactions. including transactions in forward contracts and swaps. Confrdenbal Private Placement Memorandum 55 CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0108284 CONFIDENTIAL SDNY_GM_00254468 EFTA01451593