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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>As filed with the Securities and Exchange Commission on March 17, 2011 </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </B></FONT></P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="margin-top:2px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Washington, D.C. 20549
</B></FONT></P> <P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:2px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Form S-1 </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Registration Statement </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Under </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>The Securities Act of 1933 </B></FONT></P>
<P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:2px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>Macquarie Equipment Leasing Fund Two, LLC </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>(Exact name of registrant as specified in its charter) </B></FONT></P> <P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>7359</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>27-4650348</B></FONT></TD></TR>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(State or other jurisdiction of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>incorporation or organization)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Primary Standard Industrial Classification Code Number)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(IRS Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Identification Number)</B></FONT></P></TD></TR></TABLE> <P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:2px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>225 Franklin
Street, 17th Floor, Suite 1700 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Boston, Massachusetts 02110 </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(617) 457-0645 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>(Address, including zip code, and telephone number, including area code, of registrant&#146;s principal executive offices) </B></FONT></P>
<P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:2px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>David Fahy </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>President </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Macquarie Asset Management, Inc. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>225 Franklin Street, 17th Floor, Suite 1700 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Boston, Massachusetts 02110
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(617) 457-0645 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>(Name, address, including zip code, and telephone number, including area code, of agent for service) </B></FONT></P> <P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:2px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>With Copies
to: </I></B></FONT></P> <P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Matthew S. Heiter</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Baker, Donelson, Bearman, Caldwell &amp; Berkowitz, PC</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>165 Madison
Avenue, Suite 2000</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Memphis, Tennessee 38103</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>(901) 577-8117</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Robert G. Reedy</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Porter Hedges LLP</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>1000 Main Street, 36<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP> Floor</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Houston, Texas 77002</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(713) 226-6674</B></FONT></P></TD></TR></TABLE> <P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Approximate
date of commencement of proposed sale to the public:</B> As soon as practicable after this Registration Statement becomes effective. </FONT></P> <P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT
STYLE="font-family:Times New Roman" SIZE="1">If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#254;</FONT> </FONT></P> <P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1">If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT> </FONT></P> <P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1">If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT
STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT> </FONT></P> <P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1">If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>
</FONT></P> <P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See the definitions of &#147;large accelerated filer,&#148; &#147;accelerated filer,&#148; &#147;non-accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of the Exchange Act. </FONT></P>
<P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1">Large accelerated filer&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;Accelerated filer&nbsp;&nbsp;<FONT
STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;Non-accelerated filer&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;Smaller reporting
company&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#254;</FONT> </FONT></P> <P STYLE="margin-top:2px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Calculation of Registration Fee </B></FONT></P>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="11%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
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<TD COLSPAN="13" VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
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<TD VALIGN="bottom" ALIGN="center" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Title of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>each class of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>securities to</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>be registered</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Amount</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>to be</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>registered</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Proposed</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>maximum</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>offering</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>price&nbsp;per&nbsp;share</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" NOWRAP ALIGN="center" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Proposed</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>maximum</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>aggregate</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>offering price</B></FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Amount of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>registration</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>fee </B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Shares of Limited Liability Company Interest</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="right" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">20,000,000</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">10.00</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">200,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="right" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$23,220.00</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Shares of Limited Liability Company Interest (1)</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="right" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">1,555,556</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">14,000,004</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="right" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$1,625.40</FONT></TD></TR>
<TR>
<TD VALIGN="top" STYLE="BORDER-TOP:1px solid #000000"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Total</FONT></P></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="right" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">21,555,556</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">N/A</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">214,000,004</FONT></TD>
<TD NOWRAP VALIGN="bottom" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-LEFT:1px solid #000000; BORDER-TOP:1px solid #000000"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="right" STYLE="BORDER-TOP:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">$24,845.40</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD COLSPAN="13" VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR>
<TR STYLE="font-size:1px">
<TD COLSPAN="13" VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Represents shares that may be sold pursuant to the registrant&#146;s Distribution Reinvestment Plan. </FONT></TD></TR></TABLE>
<P STYLE="font-size:2px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:2px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant files a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section&nbsp;8(a) of the Securities Act of 1933 or until the Registration Statement becomes
effective on such date as the Commission, acting pursuant to said Section&nbsp;8(a), may determine.</B> </FONT></P> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:ARIAL" SIZE="2" COLOR="#de1a1e"><B>The information in
this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any State where the offer or sale is not permitted. </B></FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2" COLOR="#de1a1e">SUBJECT TO COMPLETION, DATED
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 </FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">

<IMG SRC="g147678g76e41.jpg" ALT="LOGO"> </P>
 <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>Macquarie Equipment Leasing Fund Two, LLC </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>A Minimum of 120,000 and a Maximum of 21,555,556 Limited Liability Company Shares </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1">We are an equipment leasing program that will acquire a diversified portfolio of equipment, equipment leases and other equipment related
investments. The majority of our equipment will be leased to corporate clients. We will generate income through the collection of lease rentals and other revenues and through the sale of leased equipment and other portfolio investments. We
anticipate approximately 88.0% of the proceeds from this offering will be available to purchase our portfolio, to create capital reserves of 1.0% of our initial capital and to pay acquisition fees, after deducting total public offering and
organization expenses. In no event will our organization and offering expenses exceed 15% of our gross offering proceeds. Macquarie Asset Management Inc. is our manager. Our manager is a member of the Macquarie Group, a diversified international
provider of banking, financial, leasing, advisory and investment services. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>A purchase of shares involves high risks. You
should purchase these securities only if you can afford a complete loss of your investment. See &#147;<A HREF="#toc147678_8">Risk Factors</A>&#148; beginning on page 18. Risk Factors include: </B></FONT></P>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">All or a substantial portion of distributions you receive from us may be a return of capital rather than a return on capital. Rates of distribution
will not necessarily be indicative of profitable returns of the program. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">This is a &#147;blind pool&#148; offering. We have not identified any specific investments as of the date of this prospectus and therefore cannot
determine all of the potential risks associated with our portfolio at this time. Our manager&#146;s limited operating history decreases your ability to evaluate your investment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">If a client is in default under a lease with us, we may incur losses. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">We may invest in equipment indirectly through non-lease transactions which expose us to additional risks not present when acquiring equipment that will
be wholly-owned by us directly. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">Your shares are effectively illiquid and you may not be able to sell your shares. You should be prepared to hold your shares for the life of our fund,
which is anticipated to be approximately eight years but may be longer. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">Uncertainties associated with the equipment leasing industry may have an adverse effect on our business and may adversely affect our ability to give
you any economic return from our shares or a complete return of your capital. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">There are material income tax risks associated with this offering. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">You will have limited voting rights. Our manager will make all of our management decisions. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">Our manager will receive substantial fees from us. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">Our use of debt financing means our losses may be greater than if debt financing were not used. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:3px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;</FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1">There are potential conflicts of interest between us and our manager and its affiliates. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities nor has
any state securities commission opined upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:3%"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Investments in Macquarie Equipment Leasing Fund Two, LLC are not deposits with or other liabilities of Macquarie Bank Limited ABN 46 008 583 542, or of any entity in the Macquarie Group and are subject
to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie Bank Limited nor any other member company of the Macquarie Group guarantees any particular rate of return or the performance of the
Macquarie Equipment Leasing Fund Two, LLC nor do they guarantee the repayment of capital from Macquarie Equipment Leasing Fund Two, LLC. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:3%"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>The use of forecasts in this offering is prohibited. Any representations to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax
consequence which may flow from an investment in this program is not permitted. </B> </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="65%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Price to<BR>Public</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Selling<BR>Commissions</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Proceeds to<BR>Fund<BR>Before&nbsp;Expenses</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Per Share</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">10.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">1.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Total Minimum</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">1,200,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">120,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">1,080,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Total Maximum</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">200,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">20,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">180,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">DRP per Share</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1"> N/A</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Total DRP</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">14,000,004</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1"> N/A</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">14,000,004</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:3%"><FONT STYLE="font-family:Times New Roman" SIZE="1">We are offering a
total of 20,000,000 shares of limited liability company interest for a price of $10.00 per share, subject to certain reductions. An investor must purchase a minimum of 500 shares. We will deposit subscriptions in a bank escrow account at Wells Fargo
Bank and no shares will be sold unless a minimum of $1,200,000 in cash is received within one year from the start of the offering. If the minimum offering is not achieved, the escrow agent will send you a refund of your investment along with any
interest earned thereon and without deduction for escrow expenses. We are also offering up to 1,555,556 shares pursuant to our distribution reinvestment plan, or DRP, at a public offering price of $9.00 per share. The offering will be made by
unaffiliated broker dealers, or selling dealers, in a selling group managed by Macquarie Capital (USA) Inc., a broker dealer affiliated with our manager, acting as dealer manager. The offering is being made on a &#147;best efforts&#148; basis and
the selling dealers and dealer manager selling the shares are not required to sell any specific number of shares. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>MACQUARIE
CAPITAL (USA) INC.&#150;Dealer Manager </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">THE DATE OF THIS PROSPECTUS IS
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc"></A>TABLE OF CONTENTS </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="95%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Page</B></FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_1">WHO MAY INVEST</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_2">General Suitability Standards</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_3">Additional Information for Residents of Certain States</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_4">QUESTIONS AND ANSWERS ABOUT THIS OFFERING</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_5">QUESTIONS AND ANSWERS ABOUT OUR DISTRIBUTION REINVESTMENT PLAN</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">7</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_6">PROSPECTUS SUMMARY</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_7">ESTIMATED USE OF PROCEEDS</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">16</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_8">RISK FACTORS</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">18</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_9">Risks Associated With This Offering</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">18</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_10">Risks Associated With Our Equipment Leasing Activities</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">21</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_11">Risks Associated With Our Equipment Trading and Other Activities</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">25</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_12">Risks Associated With Our General Business Operations</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">26</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_13">Risks Associated With the Tax Treatment of Us and Our Shares</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">29</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_14">MANAGEMENT COMPENSATION</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">33</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_15">Offering Compensation</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">33</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_16">Operating Compensation</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">35</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_17">INVESTMENT OBJECTIVES AND POLICIES</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">40</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_18">Principal Investment Objectives</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">40</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_19">Equipment Considerations</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">41</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_20">Types of Transactions and Transaction Strategies</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">43</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_21">Lease Provisions</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">47</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_22">Types of Clients and Client Considerations</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">47</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_23">Borrowing Strategies and Limitations</A></FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">48</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_24">Warehousing of Transactions by our Manager or our Manager&#146;s Affiliates</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">48</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_25">Co-Investments</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">49</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_26">Transaction Review and Approvals</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">49</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_27">Portfolio Review</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">50</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_28">ALTERNATIVE INVESTMENT STRATEGIES</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">51</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_29">THE EQUIPMENT LEASING INDUSTRY</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">52</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_30">MANAGER&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">54</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_31">FIDUCIARY DUTIES AND CONFLICTS OF INTEREST</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">55</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_32">Potential Conflicts of Interest</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">55</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_33">Managing Conflicts of Interest</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">58</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_34">THE MACQUARIE GROUP</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">62</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_35">The Macquarie Group&#146;s Leasing Expertise</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">62</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_36">The Macquarie Group&#146;s Leasing Team</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">63</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_37">MANAGEMENT</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">65</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_38">Organizational Diagram</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">66</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_39">Our Board of Directors and Investment Committee</A></FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">66</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_40">Transaction Sources</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">68</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_41">CAPITALIZATION</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">69</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_42">INCOME, LOSSES, DISTRIBUTIONS AND DISTRIBUTIONS POLICY</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">70</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_43">FEDERAL INCOME TAX CONSEQUENCES</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">73</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_44">Opinion of Counsel</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">73</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_45">Classification as a Partnership</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">74</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_46">Allocations of Profits and Losses</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">76</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_47">Taxation of Investors</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">77</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_48">Limitation on Deduction of Losses</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">79</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_49">Need for Independent Advice</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">91</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR></TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="95%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Page</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_50">ERISA CONSIDERATIONS</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">91</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_51">SUMMARY OF OUR OPERATING AGREEMENT</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">94</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_52">REDEMPTION OF SHARES</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">103</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_53">PLAN OF DISTRIBUTION</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">104</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_53a">General</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">104</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_54">Compensation of the Dealer Manager and Selling Dealers</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">104</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_54a">Termination of Dealer Manager and Selling Dealer Agreements</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">106</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_54b">Indemnification of Dealer Manager and Selling Dealers</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">107</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_55">Distribution Reinvestment Plan</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">107</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_56">Subscription Process and Escrow Agreement</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">107</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_56a">Automatic Investment Program </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">108</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_56b">Shares by Assignment</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">109</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_57">SUPPLEMENTAL SALES MATERIAL</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">110</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_58">LEGAL OPINIONS</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">110</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_59">EXPERTS</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">110</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_60">FORWARD-LOOKING STATEMENTS</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">111</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_61">WHERE YOU CAN FIND MORE INFORMATION</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">112</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_62">GLOSSARY</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">113</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_63">FINANCIAL STATEMENTS</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_64">APPENDIX A LIMITED LIABILITY COMPANY OPERATING AGREEMENT</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_64a">APPENDIX B PRIOR PERFORMANCE TABLES </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">B-1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_65">APPENDIX C HOW TO INVEST</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_65a">APPENDIX D ADDITIONAL INVESTMENT SUBSCRIPTION AGREEMENT </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">D-1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#toc147678_66">APPENDIX E DISTRIBUTION REINVESTMENT PLAN</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">E-1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR></TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>In this prospectus, &#147;we,&#148; &#147;us,&#148; &#147;our,&#148; &#147;company&#148;
and &#147;fund&#148; refer to Macquarie Equipment Leasing Fund Two, LLC. References to &#147;our manager&#148; refer to Macquarie Asset Management Inc. </I></FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_1"></A>WHO MAY INVEST </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_2"></A>General Suitability
Standards </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">An investment in our shares is only appropriate for investors who meet the suitability standards set forth
below. We are requiring that investors meet these standards due to the long-term nature of, and lack of liquidity in, an investment in us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Unless you reside in a state for which more stringent suitability standards are required, you must meet our basic suitability requirements in order to purchase our shares, being either: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a minimum gross income of $70,000 and a minimum net worth of $70,000, calculated exclusive of your home, home furnishings and automobiles; or
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a minimum net worth of $250,000, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition, you must be either a U.S. citizen with a resident address in the U.S. (individuals only) or a U.S. resident alien with a
resident address in the U.S. in order to purchase our shares. If you are an individual and you become a &#147;foreign partner&#148; for purposes of Section&nbsp;1446 of the Internal Revenue Code of 1986, or the Code, as amended, at any time during
the life of our fund, we have the right but not the obligation to repurchase all of your shares pursuant to the terms of our operating agreement. See &#147;Summary of Our Operating Agreement.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">When evaluating your suitability for this investment using the standards listed above and below, keep in mind that net worth does not
include the value of your home furnishings, personal automobiles and the equity in your home. Also, you must value the assets included in your net worth calculation at their fair market value. For fiduciary accounts, such as IRAs and HR-10, or Keogh
plans, and other benefit plans or trusts, these suitability standards must be met by the beneficiary, the IRA, plan or trust or the donor or grantor who directly or indirectly supplies the funds to purchase the units, if that donor or grantor is the
fiduciary of the IRA, plan or trust. Our manager will maintain your suitability records for a period of six years. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">It is the
responsibility of our manager, the dealer manager and each person selling our shares on behalf of our manager or dealer manager to make every reasonable effort to determine that the purchase of our shares is a suitable and appropriate investment for
subscribers. We and the selling dealers will rely on what you tell us in your subscription agreement about your financial situation and investment objectives, and the selling dealers must maintain documents in their files disclosing the basis on
which they made the suitability determination of an investment in us by the investors to whom they sold our shares. Thus, it is important that you provide complete and accurate information on your subscription agreement. See &#147;Plan of
Distribution.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_3"></A>Additional Information for Residents of Certain States </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Residents of certain states are required to meet suitability standards that differ or are in addition to the general suitability standards
stated above. In addition, we are required to make certain disclosures regarding an investment in the shares and their transferability. If you are a resident of one of the following states, the differing suitability standards and/or disclosures
apply to you. Any additional requirements imposed by a state after the date of this prospectus will be disclosed in a supplement to this prospectus. You are urged to review any supplement to this prospectus to determine whether more restrictive
standards apply to your investment. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Alabama Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us and similar equipment
leasing programs may not exceed 10% of your liquid net worth. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">1 </FONT></P>


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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>California Investors. </B>The offering is limited to suitable investors only. You must have either (1)&nbsp;a liquid net worth of not less than
$100,000 and a gross annual income of not less than $75,000, or (2)&nbsp;a liquid net worth of $250,000, in both instances exclusive of your home, home furnishings and automobiles. In addition, your investment in us may not exceed 10% of your net
worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Iowa Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates may not
exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Kansas Investors. </B>Under suitability guidelines of the Office of the Kansas Securities Commissioner, you are cautioned to carefully evaluate
whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash
equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early
distribution. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Kentucky Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Michigan Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliated
programs may not exceed 10% of your liquid net worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Missouri Investors. </B>You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of
your net worth, calculated exclusive of home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Ohio Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us and in affiliated programs
may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Oklahoma Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Oregon Investors. </B>You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of your
net worth, calculated exclusive of home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Pennsylvania Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates
may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. Because the minimum offering amount is less than $20,000,000, which represents 10% of the maximum offering amount, you are cautioned to
carefully evaluate the program&#146;s ability to fully accomplish its stated objectives and to inquire as to the current dollar volume of program subscriptions. In addition, subscription proceeds of Pennsylvania investors will be held in an escrow
account until we receive and accept subscriptions for at least $10,000,000 in offering proceeds. We must offer you the opportunity to rescind your subscription if we have not received subscriptions for $10,000,000 within 120 days of the date the
escrow agent receives your subscription proceeds. We must repeat this offer to you every 120 days during the offering period until we have received and accepted subscriptions for $10,000,000. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Tennessee Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us must not exceed ten
percent (10%)&nbsp;of your liquid net worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Vermont Investors</B>. You must meet the general suitability standards set forth above. In addition, your maximum investment in us and our
affiliates may not exceed 10% of your net worth. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Who May Invest </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">You should purchase our shares only if you: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">meet the minimum income, net worth standards and other basic suitability requirements established for us specified above; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">can reasonably benefit from us based on your overall investment objectives and portfolio structure; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">are able to bear the economic risk of the investment based on your overall financial situation; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">have understanding of: </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the fundamental risks of the investment; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the risk that the subscriber may lose the entire investment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the lack of liquidity of the shares; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the restrictions on transferability of the shares; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the background and qualifications of our manager; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the tax consequences of the investment; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">have had our final prospectus for at least five business days, </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">and if you believe an investment in us is otherwise suitable for you. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_4"></A>QUESTIONS AND ANSWERS ABOUT THIS OFFERING </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q1. What is Macquarie Equipment Leasing Fund Two, LLC and what does it do? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;We are an investment vehicle that will make investments in equipment and equipment leases. We may also make investments in other equipment related transactions which will allow
us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. Those transactions may include equipment trading transactions, residual value guarantees, forward purchase agreements, investments in companies which
lease equipment, total lease return swaps, participation agreements, equipment purchase options and other transactions involving equipment. We will not enter into stock, bond or other exchange traded derivative contracts. See &#147;Investment
Objectives and Policies&#150;Types of Transactions and Transaction Strategies.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We are commonly referred to as an
&#147;equipment leasing fund&#148; or &#147;equipment leasing program.&#148; Equipment leasing funds are often considered to be an alternative asset class, being non-correlated to traditional assets like stocks and bonds. Investments into
alternative assets may provide diversification benefits for investors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">When you purchase shares of membership or limited
liability company interests in Macquarie Equipment Leasing Fund Two, LLC, the capital you invest is pooled with the capital contributions of other investors. Those capital contributions are combined with borrowings and, after payment of fees and
expenses, invested in equipment, equipment leases and other equipment related transactions. The transactions in which we invest will be originated and managed by Macquarie Asset Management Inc., our manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We anticipate that the majority of our revenue will be derived from: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">income received under lease agreements and other equipment related investments; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the proceeds received from the sale of equipment that had been subject to a lease or other equipment related investment. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q2. What are our investment objectives? </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Our principal investment objectives are to: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">preserve, protect and return your invested capital; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">generate regular monthly cash distributions; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">reduce our overall risk through diversification of our portfolio; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">generate investment returns that are not correlated to returns from investments in listed stock and bond markets; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">generate a favorable total return on your investment. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">There is no assurance, however, that we will be able to meet our investment objectives. See &#147;Investment Objectives and Policies.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Q3. What types of equipment and other transactions will be in our portfolio? </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Although the composition of our portfolio cannot be determined at this stage, we expect to invest in equipment classes which may
include rail equipment, such as freight cars or locomotives, maritime equipment, aviation equipment, such as commercial jet engines and aircraft, road transportation equipment, manufacturing equipment, mining and construction equipment,
technological and communications equipment, utilities equipment and/or other types of equipment that our manager determines may meet our investment objectives. We expect to invest in equipment located both within and outside the United States.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The majority of our equipment investments will be accompanied by a corresponding lease with
a corporate client. Typically, a client will select an item of equipment it requires for its business operations. We will then purchase that equipment and simultaneously lease it to that client for a fixed period. At the end of the lease period, the
equipment is either returned to us, purchased by our client or is leased for a further period. To a lesser extent, we may purchase equipment for resale without a corresponding lease, or enter into other types of equipment related investments which
will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. Those transactions may include equipment trading transactions, residual value guarantees, forward purchase agreements, investments in
companies which lease equipment, total lease return swaps, participation agreements, equipment purchase options and other transactions involving equipment. We will not enter into stock, bond or other exchange traded derivative contracts. See
&#147;Investment Objectives and Policies&#150;Types of Transactions and Transaction Strategies.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">When contemplating
investments in equipment, our manager may consider a range of factors including the remaining economic useful life of the equipment, the anticipated residual value of the equipment, whether the equipment is new or used and the condition of the
equipment, equipment registration and regulatory considerations, portfolio diversification, client considerations such as available financial information about the client and how essential the equipment is to the operations of the client, the cash
flow profile of the equipment and the depth of the equipment market and exit mechanisms. See &#147;Investment Objectives and Policies&#151;Equipment Investment Considerations.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Q4. Who is our manager, Macquarie Asset Management Inc.? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Our
manager, Macquarie Asset Management Inc., is a member of the Macquarie Group Limited group of companies, which we refer to as the &#147;Macquarie Group.&#148; The Macquarie Group is a diversified international provider of banking, financial,
leasing, advisory and investment services. As of September 30, 2010, the Macquarie Group operated in more than 70 offices in 28 countries and had approximately 15,500 employees, over 3,700 of whom were located across 28 offices in North America. As
of September&nbsp;30, 2010, the Macquarie Group had assets under management of approximately $307 billion. The Macquarie Group manages assets which provide valuable services in markets around the world. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager is operated by the Macquarie Group&#146;s equipment leasing group. As of September&nbsp;30, 2010, the Macquarie Group&#146;s
leasing group had approximately $8.6 billion of equipment leases under management with over 700 employees located in North America, Europe, Asia and Australia / New Zealand across six different leasing business lines. These employees variously
specialize in all aspects of equipment leasing operations, from transaction origination to asset management and equipment remarketing. See &#147;Management&#148; and &#147;Fiduciary Duties and Conflicts of Interest.&#148; </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q5. What happens after you invest and when can you expect to receive distributions? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Once our manager has accepted your subscription, you will receive a confirmation letter indicating our acceptance of your investment. We will hold our initial closing and our
shares will be sold once a minimum of $1,200,000 in cash has been received within one year from the start of the offering. Generally, we intend to begin making monthly cash distributions in the month following the first full month after we have
received a total of $1,200,000 in cash subscriptions. We may, however, elect not to make distributions until subscription funds have been invested, which could take as long as two years. If we elect to make distributions before funds have been fully
invested, those distributions may be a return of uninvested capital rather than a return on capital. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We anticipate that our
operations will continue for approximately eight years. Our operations are divided into three phases: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our &#147;offering period&#148; is anticipated to last up to two years from the date of this prospectus. We will raise money from investors during the
offering period. The more quickly we raise money, the greater the likelihood that we will raise the maximum amount in this offering and the greater the likelihood </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


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that the offering period will be shorter. After we have raised $1,200,000, we will begin investing the offering proceeds into equipment, equipment leases and other equipment related transactions.
Until offering proceeds are used for the acquisition or operation of our portfolio, the offering proceeds will be held in short-term, highly liquid investments which afford appropriate safety of principal. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our &#147;operating period&#148; is anticipated to last five years from the end of the offering period, but may last longer. During this period we will
invest and re-invest in equipment, equipment leases and other equipment related transactions. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our &#147;liquidation period&#148; is anticipated to last one year from the end of the operating period, but not more than 36 months from the end of
the operating period. During this period we will dispose of the remainder of our portfolio and make final distributions to our investors. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Cash distributions are expected to continue each month for the duration of the offering and operating periods. However, the amount and rate of cash distributions could vary and are not guaranteed.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q6. Are there tax consequences and potential benefits of investing in us? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;We do not anticipate that we will pay federal income taxes. Instead, you will be taxed on your share of our net income. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">All of our income or losses and other tax items will be passed through to you and our other members. Our manager anticipates that during
our early years, income taxes with respect to your distributive share of income may be tax-deferred by operating losses and depreciation deductions available from equipment leased to clients under operating leases. The total depreciation deductions
available will be reduced to the extent that our equipment is located outside the U.S. and to the extent that we hold indirect interests in equipment. The passive activity rules under the Code will apply to individuals and most likely to our other
members. Thus, you should anticipate that your share of our net income or net loss in each of our taxable years generally will be characterized as passive activity income or loss. Under the passive activity rules, you may deduct your passive
activity losses only against passive activity income, and not against active income or interest, dividends and other forms of portfolio income. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Employee benefit plans, such as qualified pension and profit sharing plans, Keogh plans and IRAs, are generally exempt from federal income tax, except that any net unrelated business taxable income, or
UBTI, that exceeds a specific deduction of $1,000 in any taxable year is subject to tax. Other charitable and tax-exempt organizations are also subject to tax on UBTI. Most of our net income, if any, in a given year will constitute UBTI, either
because the income is rental income from personal property or because we intend to use leverage to help build our portfolio. For a detailed discussion of the tax consequences of the offering, see &#147;Federal Income Tax Consequences.&#148; You are
urged to seek advice based on your individual circumstances from an independent tax advisor with respect to the tax consequences to you of an investment in us. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Q7. Will you be able to sell your investment in our shares? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;An
investment in our shares is an illiquid investment and your ability to sell our shares will be extremely limited. You should only invest money that you can afford to have unavailable for at least eight years, net of distributions that are expected
to be made to you during those years. Our shares will not be listed on any national securities exchange at any time and we will take steps to ensure that no public trading market develops for our shares. Our operating agreement allows you to request
that we repurchase your investment in our shares from time to time, at a redemption price determined according to a pre-set formula. See &#147;Redemption of Shares.&#148; You should assume that the proceeds from a repurchase or sale, consisting of
repurchase proceeds and distributions you received prior to repurchase, may be less than your original investment. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q8. Where can you find more information? </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;We have filed a registration statement on Form S-1 with the SEC regarding the shares we are offering by this
prospectus and we will file periodic reports and other information with the SEC. These documents are available from the SEC&#146;s website at http://www.sec.gov. Once you invest in us, you may contact our manager&#146;s Investor Relations department
regarding your account information. The telephone number is 866-965-7622. The address is Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> Floor, Suite 1700, Boston MA 02110. You are urged to thoroughly discuss an investment in us with your financial, tax
and legal advisors. See &#147;Where You Can Find More Information.&#148; </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_5"></A>QUESTIONS AND ANSWERS
ABOUT OUR DISTRIBUTION REINVESTMENT PLAN </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We have a distribution reinvestment plan, or DRP, that will allow you to have
part or all of your distributions received from us during our offering period invested in additional shares. See &#147;Plan of Distribution&#150;Distribution Reinvestment Plan.&#148; A copy of our DRP is included as Appendix E to this prospectus.
You should read our DRP in its entirety before making any decision to participate. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q1. What is the benefit of participating in the DRP?
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;The benefit of participating in the DRP is that the issue of shares under the DRP will not be subject to selling
commissions or the dealer manager fee. This will allow you to purchase shares under the DRP at a price of $9.00 instead of $10.00. The monthly distributions that we expect to pay per share issued under our DRP will be the same as the distributions
paid on our other shares. This effectively means that our rate of distribution on shares issued under our DRP, expressed as a percentage of the purchase price of the shares, will be higher than for our other shares. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q2. Who may participate in the DRP? </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Once you have made a minimum investment of $5,000 in our offering, you are eligible to participate in our DRP. Our DRP becomes
effective once we receive our minimum offering amount of $1,200,000 in cash. In addition, until the end of our DRP period, members of Macquarie Equipment Leasing Fund, LLC (an existing equipment leasing program sponsored by our manager) may elect to
invest all the distributions that they receive with respect to their investment in that fund in our shares issued under our DRP. You may elect to have all or a portion of the cash distributions you receive during our offering period invested in
additional shares pursuant to our DRP. We reserve the right to prohibit qualified plan investors from reinvesting their distributions if that participation would cause our underlying assets to constitute &#147;plan assets.&#148; See &#147;ERISA
Considerations.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q3. When will additional shares be purchased? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;We will invest distributions in additional shares as soon as administratively possible after the distribution date, but in any event not later than 30 days from the distribution
date, to the extent that our shares are available for purchase. Investment of distributions in our shares will begin with the next distribution payable after we receive your enrollment form. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Q4. What is the purchase price of the shares purchased under our DRP? </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Our dealer manager and selling dealers will not receive selling commissions or dealer manager fees with respect to shares
purchased through our DRP, so the purchase price will be $9.00. Our DRP allows the purchase of fractional shares. You are likely to receive fractional shares. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q5. How long will our DRP last? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Our manager may terminate our DRP at any time in its sole discretion, although our DRP requires that participants receive ten business days notice of any termination that would
have an adverse effect on the rights or obligations of a participant. Our DRP will terminate upon the earlier of the end of our offering period and the issuance of 1,555,556 shares under our DRP. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q6. How can you participate in our DRP? </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;You may choose to invest all or a portion of your distributions during the offering period at any time by marking the applicable
box in your subscription agreement or by completing any other form provided to you by our manager, the dealer manager or a selling dealer. Your participation in our DRP will begin with the next distribution payable after receipt of your enrollment
form. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q7. How can you withdraw from our DRP? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px;padding-bottom:0px;"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;You may withdraw from our DRP at any time by providing written notice to Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> Floor, Suite 1700, Boston MA, 02110. Your withdrawal from our DRP
will not affect shares committed for purchase prior to the date of the withdrawal notice. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q8. Who will administer our DRP? </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Our DRP will be administered by our manager, who can be contacted at: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Investor Relations </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">225 Franklin St, 17</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> Floor, Suite 1700 </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Boston MA 02110 </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telephone: 866-965-7622 </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q9. Will you be able to sell your investment in our DRP shares? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;Shares purchased through our DRP will be subject to the same transfer restrictions as all other shares sold in this offering. See &#147;Summary of Our Operating
Agreement&#150;Transfer of Our Shares and Substitute Members&#148; and &#147;Redemption of Shares.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Q10. Where can you find more
information? </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">A. We have filed a registration statement on Form S-1 with the SEC regarding the DRP shares we are
offering by this prospectus and we will file periodic reports and other information with the SEC. These documents are available from the SEC&#146;s website at http://www.sec.gov. Once you invest in us, you may contact our manager&#146;s Investor
Relations department regarding your DRP account information. The telephone number is 866-965-7622. The address is Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> Floor, Suite 1700, Boston MA 02110. You are urged to thoroughly discuss an investment in us with your financial, tax
and legal advisors. See &#147;Where You Can Find More Information.&#148; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_6"></A>PROSPECTUS SUMMARY </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>The following is a summary of important information contained elsewhere in this prospectus. You should read the entire prospectus,
including the section entitled &#147;Risk Factors,&#148; carefully before making a decision about investing in our shares. This summary does not contain all of the information that you may consider important in making your investment decision.
</I></FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Our Company </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We are a Delaware limited liability company formed on January&nbsp;19, 2011. We will pool the capital you invest with capital contributed by other investors and borrowings to acquire a diversified
portfolio of equipment and equipment leases. We may also make investments in other equipment related transactions which will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage, such as trading
transactions, residual value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options and joint ventures. See &#147;Investment Objectives and Policies&#150;Types of Transactions and
Transaction Strategies.&#148; The pooled capital contributions will also be used to pay fees and expenses associated with this offering and our operations and to fund a reserve. The majority of equipment that we purchase will be accompanied by a
lease of that equipment to third parties, though we may also invest in other types of equipment related transactions. As of the date of this prospectus we have not yet identified any specific equipment investments. We are managed by Macquarie Asset
Management Inc., a member of the Macquarie Group. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our operations will be divided into three separate phases: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Offering Period</U>: We will raise money from investors during this period, which we expect to last for up to two years from the date of this
prospectus. We expect to invest most of the net proceeds from this offering during this period. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Operating Period</U>: We expect this period will last for five years from the end of the offering period. During this period, we will continue to
reinvest the cash generated from our initial investments to the extent that cash is not needed for distributions to our members or expenses and reserves. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Liquidation Period</U>: This period is anticipated to last one year from the end of the operating period, but may last longer, as adverse market
conditions for some kinds of equipment may exist and require a longer period to dispose of the equipment. The liquidation period can last no longer than 36 months from the end of the operating period. During this period we will dispose of the
remainder of our portfolio. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You should expect to hold your shares for at least eight years from the time
you invest, though the actual duration of your investment may be longer or shorter. Each subscriber has the right to cancel his or her subscription within a period of five business days after receiving a final prospectus. After that time, unless
otherwise approved by our manager in its sole discretion, an investment in our shares is irrevocable and investors will have no right to revoke their subscriptions prior to us achieving our minimum offering amount. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investment Objectives </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our principal investment objectives are to: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">preserve, protect and return your invested capital; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">generate regular monthly cash distributions; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">reduce our overall risk through diversification of our portfolio; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">generate investment returns that are not correlated to returns from investments in listed stock and bond markets; and </FONT></P></TD></TR></TABLE>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P></div></div>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9 </FONT></P>


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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">generate a favorable total return on your investment. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">There is no assurance, however, that we will be able to meet our investment objectives. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Our
Manager </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager is Macquarie Asset Management Inc. Our investment decisions will be made by our manager&#146;s
investment committee, which at the date of this prospectus is comprised of Messrs Fahy and Edghill, or by our manager&#146;s board of directors, which at the date of this prospectus is comprised of Messrs Fahy, Edghill and Pitts. See
&#147;Management.&#148; The manager and the persons making our investment decisions can be contacted at: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s principal office at 225 Franklin St, 17th Floor, Suite 1700, Boston, Massachusetts, 02110; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s telephone number, 866-965-7622. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager&#146;s website address is www.macquarie.com/mami. The information contained on our manager&#146;s website is not part of this prospectus. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager is a member of the Macquarie Group. The Macquarie Group is a diversified international provider of banking, financial,
leasing, advisory and investment services. The parent entity of the Macquarie Group, Macquarie Group Limited, is listed on the Australian Stock Exchange. As of September&nbsp;30, 2010, the Macquarie Group operated in more than 70 offices in 28
countries and had approximately 15,500 employees, over 3,700 of whom were located across 28 offices in North America. Our manager is operated by the Macquarie Group&#146;s equipment leasing group. It has operated leasing businesses since 1987,
specializing in a range of equipment including ground transportation, aviation, technology, utility and other equipment. As of September&nbsp;30, 2010, the Macquarie Group&#146;s leasing group had approximately $8.6 billion of equipment leases under
management with over 700 employees located in North America, Europe, Asia and Australia / New Zealand. These employees variously specialize in all aspects of equipment leasing operations, from transaction origination to asset management and
equipment remarketing. Our manager is the sponsor of Macquarie Equipment Leasing Fund, LLC, an equipment leasing program which completed its offering period on June &nbsp;&nbsp;&nbsp;&nbsp;, 2011 and is currently in its operating period. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will provide or arrange all services necessary and desirable for our operations, including those relating to equipment
acquisitions and disposals, lease management and administrative, reporting and regulatory services. We describe the background and experience of our manager&#146;s directors, as well as other executives within leasing businesses of our
manager&#146;s affiliates who may provide advice and assistance to us, in &#147;Management.&#148; Also see &#147;Fiduciary Duties and Conflicts of Interest.&#148; In managing us, our manager will have access to the experienced leasing and other
resources of the Macquarie Group. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The relationship between our members and our manager is governed by our operating
agreement, which is attached as Appendix A to this prospectus. You should be particularly aware that under our operating agreement you will have limited voting rights and our shares will not be freely transferable. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Summary of Risk Factors </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">An investment in our shares involves significant risks, including the following: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">All or a substantial portion of your distributions may be a return of capital and not a return on capital. Rates of distribution will not necessarily
be indicative of our overall performance. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">This is a &#147;blind pool&#148; offering. We have not identified any specific investments as of the date of this prospectus. We cannot determine all
of the potential risks associated with our portfolio at this time. </FONT></P></TD></TR></TABLE>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P></div></div>

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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Investments in our shares are effectively illiquid. There is no active trading market for our shares. You should be prepared to hold your shares for
the duration of the fund, which is anticipated to be approximately eight years, but may be longer. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will manage our operations and may make decisions with which you do not agree or which do not achieve our business objectives. You will
have limited voting rights and limited ability to remove our manager. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will receive substantial fees from us which will reduce the cash available for distribution or investment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">If a client is in default under a lease contract with us, we may incur losses. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The future market value of our equipment may be lower than anticipated, resulting in a loss on our investment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">There may be conflicts of interest between us and our manager and its affiliates, including: </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the receipt of fees and other compensation by our manager and its affiliates from us; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager and its affiliates may compete with us; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we may engage in related party transactions; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager or its affiliates may purchase shares as an investor; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s decisions regarding the use of leverage and reserves will affect our cash distributions and our manager&#146;s compensation;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we will rely on the employees of our manager&#146;s affiliates; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the resolution of conflicts will be undertaken by employees of our manager&#146;s affiliates; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">no independent underwriter conducted due diligence with respect to this offering; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we and our manager are not represented by separate counsel; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager will act as our tax matters partner. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our use of debt financing means our losses may be greater than if debt financing were not used. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The equipment leasing industry is highly competitive, which may hinder our ability to source appropriate or attractive investments.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">There are material income tax risks associated with this offering. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">See &#147;Risk Factors.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investor Suitability </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You must meet our basic suitability requirements to invest in our shares. In general, you must either have: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a net worth of at least $70,000 plus at least $70,000 of annual gross income, calculated exclusive of your home, home furnishings and automobiles; or
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a net worth of at least $250,000, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition, you must meet certain state requirements. Basic suitability requirements vary from state to state. </FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P></div></div>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">11 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<div style ="BORDER-BOTTOM:1pt solid #000000;BORDER-LEFT:1pt solid #000000;BORDER-RIGHT:1pt solid #000000;BORDER-TOP:1pt solid #000000;MARGIN-LEFT:0px;MARGIN-RIGHT:0px;WIDTH:100%"><div style="width:97%; margin-top:1.5%; margin-left:1.5%; margin-right:-1.25%">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You should purchase our shares only if: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">you meet our basic suitability requirements; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">you are or will be in a financial position appropriate to enable you to realize to a significant extent the potential benefits described in this
prospectus; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">you are able to bear the economic risk of the investment based on your overall financial situation and have a net worth sufficient to sustain those
risks, including loss of investment and lack of liquidity; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">you have an understanding of the fundamental risks of our business, the risk that you may lose your entire investment, the lack of liquidity of the
shares, the restrictions on transferability of the shares, the background and qualifications of the manager, and the tax consequences of your investment; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">your investment in us is otherwise suitable for you. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">See &#147;Who May Invest.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Federal Income Tax Consequences </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This prospectus contains a discussion of material federal income tax issues that may impact you. We have obtained an opinion from our
counsel, Baker, Donelson, Bearman, Caldwell&nbsp;&amp; Berkowitz, a professional corporation, that we are classified as a partnership for federal income tax purposes and on a number of other matters. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Counsel&#146;s opinion is based upon the facts described in this prospectus and upon additional facts that we provided to counsel about
our operations. Any alteration of our activities from the description we gave to counsel may render the opinion unreliable. Furthermore, the opinion of counsel is based upon law as of the date of the opinion, which is subject to change either
prospectively or retroactively. You should note that the tax opinion represents only our counsel&#146;s best legal judgment and has no binding effect or official status of any kind, on the IRS or otherwise; and neither we nor our counsel has
requested a ruling from the IRS on any of the tax matters discussed in this prospectus. See &#147;Federal Income Tax Consequences.&#148; </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>The Offering </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
information provided below, unless otherwise indicated, does not include any shares to be sold pursuant to our DRP. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Offering </I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">A minimum of $1,200,000 in offering proceeds and a maximum of 20,000,000 shares. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager has determined that the minimum offering amount represents a level of subscription proceeds which will enable our portfolio to be sufficiently diversified.
Our maximum offering amount has been determined by our manager with reference to the subscription proceeds it believes we may be able to raise over our offering period. </FONT></TD></TR></TABLE>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Offering Price </I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">$10.00 per share, with the following exceptions: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the offering price will be $9.30 per share sold to our manager or its affiliates or to a selling dealer or certain of their affiliates; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the offering price will be $9.00 per share sold pursuant to our DRP. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Reduced selling commissions and volume discounts may also apply. </FONT></TD></TR></TABLE>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P></div></div>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">12 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<div style ="BORDER-BOTTOM:1pt solid #000000;BORDER-LEFT:1pt solid #000000;BORDER-RIGHT:1pt solid #000000;BORDER-TOP:1pt solid #000000;MARGIN-LEFT:0px;MARGIN-RIGHT:0px;WIDTH:100%"><div style="width:97%; margin-top:1.5%; margin-left:1.5%; margin-right:-1.25%">

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2">See &#147;Plan of Distribution.&#148; </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The price of $10.00 per share has been determined by our manager by dividing our maximum offering amount of $200,000,000, excluding our DRP, by 20,000,000 shares, the
maximum amount of shares that we are offering excluding our DRP. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Minimum Investment </I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">The minimum number of shares you must purchase is 500. </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Escrow</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">Your subscription monies will be deposited and held in an interest bearing escrow account at Wells Fargo Bank, National Association until: </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the minimum offering size of $1,200,000 has been achieved; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">one year after the offering begins, whichever comes first. If we have not received the minimum offering amount by the date which is one year after the
date of this prospectus, all of your funds will be returned to you with any interest earned and without deduction for any fees. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Estimated Use of Proceeds</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">Assuming that the maximum offering of 20,000,000 shares being offered is sold, we expect that we will use approximately 88.0% of the gross offering proceeds we receive to purchase our portfolio,
to create a working capital reserve and to pay acquisition fees. We will use the balance of our offering proceeds to pay the dealer manager fee, selling commissions, due diligence expense reimbursements and our manager&#146;s organization and
offering expense allowance. See &#147;Estimated Use of Proceeds.&#148; </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Depreciation</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">The availability of depreciation and method of depreciation used will depend upon factors including the type of equipment, location of equipment and the type of transaction we have entered into.
Depreciation will only be available for equipment we own subject to leases where those leases are considered to be &#147;true leases&#148; according to IRS guidelines. Generally, we expect to be eligible to claim accelerated depreciation deductions
under the Modified Accelerated Cost Recovery System using the declining balance method on equipment owned by us in the U.S. which is subject to non-full payout leases. Equipment which we own and lease that is used predominantly outside the U.S. may
be required to be written off for federal income tax purposes using the straight-line method of depreciation over a period corresponding to the equipment&#146;s class life. Depreciation may not be available for equipment under full-payout leases or
under transactions in which we indirectly invest in the equipment, including through total lease return swaps, participation agreements and other similar transactions. </FONT></TD></TR></TABLE>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Leverage</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">Until we are fully invested, we do not anticipate that the level of debt across our portfolio at any one time will exceed 40.0% of the total purchase price of all equipment in our portfolio.
Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio. </FONT></TD></TR></TABLE>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P></div></div>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13 </FONT></P>



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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Compensation of our manager, its affiliates and certain third parties</I><I>.</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager, affiliates of our manager, including Macquarie Capital (USA) Inc. in its capacity as the dealer manager, and the selling dealers will receive fees and compensation from the offering
of our shares, including the following: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Selling Commission and Dealer Manager Fee</U>: We will pay the dealer manager fee of 3.0% of the aggregate offering proceeds from shares sold. We will pay a selling
commission to the selling dealers of up to a further 7.0% of the aggregate offering proceeds from shares sold. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>O&amp;O Expense Allowance</U>: Our manager will receive an organization and offering expense allowance on a sliding scale of between 1.72% and 2.40% of our offering
proceeds to reimburse it for expenses incurred in preparing us for registration or qualification under federal and state securities laws and subsequently offering and selling our shares. The O&amp;O Expense Allowance will not exceed the actual fees
and expenses incurred by our manager and its affiliates. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Acquisition Fees</U>: We will pay our manager acquisition fees of 3.0% of the purchase price we pay for each item of equipment or direct or indirect interest in
equipment that we acquire, subject to a cap as detailed in the operating agreement. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Asset Management Fees</U>: We will pay our manager asset management fees of between 2.0% and 7.0% of the gross rental payments from our equipment lease investments
held directly or indirectly for the ongoing management of those equipment lease investments. We anticipate that we will pay our manager asset management fees of 5.0% of the gross rental payments from the majority of our leases.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Re-Leasing Fees</U>: We may pay our manager re-leasing fees of 2.0% of the gross rental payments from the re-leasing of our equipment portfolio, up to a maximum of
7.0% when combined with the asset management fees, payable as each rental payment is made over the term of the lease. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Re-Marketing Fees</U>: We may pay our manager re-marketing fees of up to 3.0% of the purchase price we receive for each item of equipment or direct or indirect
interest in equipment sold by us. Re-marketing fees payable to our manager will be subordinated until you have received a pre-tax 8.0%&nbsp;per annum internal rate of return compounded daily on all capital contributed to us, calculated on the date
of distribution and taking into account all capital contributions and all distributions, which we refer to as &#147;investor return.&#148; Investor return includes a return equal to all capital contributions we have received from you.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:0%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Outperformance Fee</U>: Prior to the
time that investor return is achieved, distributions will be made 99.0% to our members and 1.0% to our manager. After the time that investor return is achieved, distributions will be made 81.0% to our members and 19.0% to our manager. We refer to
the increased percentage of distributions payable to our manager as the &#147;outperformance fee.&#148; See &#147;Management Compensation.&#148; </FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P></div></div>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">14 </FONT></P>



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<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Potential Conflicts of Interest </I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">Various conflicts of interest will arise out of the relationship between us and our manager and its affiliates, including: </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">fees will be payable by us to our manager; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager and its affiliates may compete with us; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s decisions on our use of leverage will affect our distributions and our manager&#146;s compensation; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we will rely on the employees of our manager&#146;s affiliates; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager or its affiliates may purchase shares as an investor. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Distribution Reinvestment Plan</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">Our distribution reinvestment plan, or DRP, provides you with the opportunity to reinvest all or a portion of the cash distributions that you receive from us into additional shares during the
offering period. In addition, until the end of our DRP period, members of Macquarie Equipment Leasing Fund, LLC may elect to invest all the distributions that they receive with respect to their investment in that fund in our shares issued under our
DRP. The purchase price for shares purchased through our DRP is $9.00, which is the public offering price minus the dealer manager fee and selling commissions. See &#147;Plan of Distribution&#150;Distribution Reinvestment Plan.&#148;
</FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Subscription Procedure</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">To purchase our shares, fill out and sign our subscription agreement, the form of which is included as Appendix C to this prospectus. Send your subscription agreement and the purchase price for
the shares, by either check or wire, to us as directed in Appendix C. Wire transfer instructions are available upon request. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="38%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">After you become a member, you may purchase additional shares by completing and signing an additional investment subscription agreement, similar to the one included as
Appendix D to this Prospectus. See &#147;Plan of Distribution&#150;Automatic Investment Program&#148; for more information regarding our automatic investment program. </FONT></TD></TR></TABLE>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="TOP">
<TD WIDTH="38%"> <P STYLE="margin-bottom:1px; margin-left:2%; text-indent:-2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Glossary</I> </FONT></P></TD>
<TD><FONT STYLE="font-family:Times New Roman" SIZE="2">In general, defined terms used in this prospectus have the meanings assigned to them in the Glossary to this prospectus, or if not defined therein, in our operating agreement.
</FONT></TD></TR></TABLE>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P></div></div>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">15 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_7"></A>ESTIMATED USE OF PROCEEDS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The table below sets forth information about our expected use of the proceeds from this offering, assuming we pay the maximum
compensation, fees and expense reimbursements permitted under our operating agreement. Columns 2 and 3 in the table below set out our best estimate of the use of the gross offering proceeds if only the minimum offering amount of $1,200,000 is
received in the offering, excluding any shares sold pursuant to our DRP. Columns 4 and 5 in the table below set out our best estimate of the use of the gross offering proceeds assuming the maximum number of our shares, 20,000,000, is sold in the
offering at the public offering price of $10.00 per share, excluding any shares sold pursuant to our DRP. We will use proceeds from the sale of shares pursuant to our DRP to make investments in equipment, establish reserves and pay our organization
and offering expenses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Because we have not yet acquired any of our investments, we cannot precisely calculate some of the
expenses referred to in the tables below, so the amounts may vary. If the maximum amount of this offering is raised, we expect to use approximately 88.0% of our offering proceeds to acquire leased equipment, invest in other transactions meeting our
investment objectives, pay acquisition fees and establish reserves. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="56%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Minimum Offering</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Maximum Offering</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>120,000<BR>Shares<BR>(1)(4)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Fees and<BR>Expenses<BR>As a<BR>Percentage&nbsp;of<BR>Total&nbsp;Offering<BR>Proceeds (2)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>20,000,000<BR>Shares (3)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Fees and<BR>Expenses<BR>As a<BR>Percentage&nbsp;of<BR>Total&nbsp;Offering<BR>Proceeds (2)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Offering proceeds/assets (4)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,200,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">N/A</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">200,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">N/A</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Maximum offering expenses based on the amount of the offering proceeds/assets shown in the table:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Selling commissions and related fees (5)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">84,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">14,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dealer Manager fees (6)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">36,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">6,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Reimbursement for accountable due diligence expenses&nbsp;(7)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">840</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.07</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">140,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.07</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Organization expenses (8)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">28,800</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.40</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3,860,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.93</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total public offering and organization expenses (9)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">149,640</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">12.47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">24,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">12.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Amount available after total public offering and organization expenses</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>$</B></FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1,050,360</B></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>87.53</B></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>%&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>$</B></FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>176,000,000</B></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>88.00</B></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>%&nbsp;</B></FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition fees (10)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">30,743</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.56</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">5,123,777</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.56</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Reserves (11)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">12,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total Fees and expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">192,383</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">16.03</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">31,123,777</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">15.56</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total proceeds available for investment</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,007,781</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">83.97</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">168,876,223</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">84.44</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE> <P STYLE="line-height:8px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our minimum offering amount is $1,200,000 in cash. This table assumes the minimum offering is achieved through the sale of 120,000 shares at $10.00 per share to the
public. </FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The percentages in these columns were calculated by dividing the corresponding dollar amount in the columns by the amount of offering proceeds, respectively, as set
forth in the table. </FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The table assumes the maximum number of our shares, 20,000,000, are all sold at the public offering price of $10.00 per share, excluding any shares sold pursuant to our
DRP. </FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Excludes $2,000 contributed to us by our manager at the time of our formation. </FONT></TD></TR></TABLE>
<P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay our dealer manager and the selling dealers a selling commission of 7.0%&nbsp;per share sold by them, subject to certain exceptions. See &#147;Management
Compensation,&#148; &#147;Plan of Distribution&#148; and &#147;How to Invest.&#148; </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">16 </FONT></P>



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<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(6)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay a dealer manager fee of 3.0% of our offering proceeds to our dealer manager. See &#147;Management Compensation.&#148; </FONT></TD></TR></TABLE>
<P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(7)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will reimburse our dealer manager and the selling dealers for bona fide, detailed and itemized accountable due diligence expenses, which we anticipate to be 0.07% of
our offering proceeds. However we may reimburse higher amounts of bona fide, detailed and itemized accountable due diligence expenses up to a maximum of 0.5% of the gross offering proceeds of the offering, or up to $1,000,000 if the maximum number
of shares are sold, and up to $1,070,000 if the maximum number of shares and all of the shares offered under our DRP are sold. See &#147;Management Compensation,&#148; &#147;Plan of Distribution&#148; and &#147;How to Subscribe.&#148;
</FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(8)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay our manager an organization and offering expense allowance, or O&amp;O expense allowance, up to between 1.72% and 2.40% based on the amount of our gross
offering proceeds. Our O&amp;O expense allowance will not exceed the actual fees and expenses incurred by our manager or its affiliates in connection with our organization and this offering. The O&amp;O expense allowance will be payable on shares
purchased by our manager or its affiliates. See &#147;Management Compensation.&#148; Our organization expenses do not include the selling commissions, dealer manager fee or reimbursements described above. Our organization expenses, however, do
include legal, accounting, auditing, tax service and escrow fees, printing costs, filing and qualification fees, certain overhead costs of our manager in organizing us and preparing us for the offer and sale of our shares and similar fees and
expenses. </FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(9)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our total organization and offering expenses, which includes the dealer manager fee, the selling commissions, due diligence expenses and the O&amp;O expense allowance,
will not exceed 15.0% of our gross offering proceeds. </FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(10)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The acquisition fees in the above table are attributable to the portion of equipment investments financed through capital contributions. The acquisition fees have been
calculated by first calculating the net offering proceeds available for investment and payment of the acquisition fees, shown above as the &#147;amount available after total offering and organization expenses,&#148; then subtracting the amount shown
for reserves. </FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">This amount was then apportioned between acquisition fees and net proceeds attributable to the purchase price of investments so that the acquisition fees represent 3.0%
of the purchase price of investments. We anticipate that we will borrow 40.0% of the acquisition costs of our portfolio, and once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all
equipment in our portfolio. With borrowings, the total acquisition fees that would be paid by us would be approximately $51,238 in the minimum offering and $8,539,628 in the maximum offering. </FONT></TD></TR></TABLE>
<P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(11)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Initially, we intend to establish working capital reserves equal to approximately 1.0% of our offering proceeds for normal repairs, replacements and contingencies. The
amount of our reserves may vary from time to time as our manager determines the appropriate amount of reserves for our operations. The amount of reserves our manager establishes will depend on its analysis of: </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the timing and amount of lease payments we receive; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our debt service payments on our borrowings; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our costs and expenses and other existing liabilities; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s expectations regarding our potential future liabilities, if any; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">whether our manager determines a reserve is needed for our future investment acquisitions. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">17 </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_8"></A>RISK FACTORS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>This investment involves a high degree of risk. You should carefully consider the following risks and uncertainties together with all
of the other information included in this prospectus in evaluating the purchase of our shares. Our business, financial condition, prospects and operating results could be materially adversely affected by any of the following risks. As a consequence,
you may lose part or all of your investment if any of the following risks and uncertainties actually occur. </I></FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_9"></A>Risks Associated With this Offering </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our manager&#146;s limited operating history decreases your ability to evaluate your investment, and the operating history of our manager&#146;s affiliates are not necessarily indicative of how we
will perform. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We were formed on January 19, 2011. Our manager was formed on August&nbsp;21, 2008. Our manager&#146;s
senior management team and its affiliates, which are members of the Macquarie Group, are experienced in equipment leasing. As a new company, however, we have no prior operations that you can use to help evaluate the desirability of purchasing our
shares. Also, we cannot predict whether our intended operations will meet our stated investment objectives. In addition, our manager has only limited experience in managing an equipment leasing fund. This is only the second equipment leasing fund
our manager has managed. The first equipment leasing fund managed by our manager, Macquarie Equipment Leasing Fund, LLC, is still in its operating phase, and in any event the results of this prior Fund will not necessarily be indicative of our
results. See &#147;Management.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>All or a substantial portion of your distributions may be a return of capital and not a return on
capital. Rates of distributions will not necessarily be indicative of our overall performance. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The taxable income we
report to you each year will not equal the distributions you receive. The proportion of distributions which represent returns of capital, or a return of your initial subscription, and the proportion of which represent income earned by us, or returns
on capital, will vary over time for a variety of reasons, including depreciation deductions which reduce our taxable income but not our distributable cash. Consequently, taxable income is not indicative of our performance, which cannot be determined
until all of our investments have ended and assets have been disposed. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">To the extent that distributions we make to you are
distributions of uninvested capital from this offering, the remaining value of your investment in us will be reduced. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>We have not
identified any specific investments as of the date of this prospectus. We cannot determine all of the potential risks associated with our portfolio at this time. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">This is a &#147;blind pool&#148; offering because we have not identified any specific investments as of the date of this prospectus. Thus, you are not able to fully assess all of the potential risks
associated with an investment in our shares as you do not have information about the transactions we will enter into, including: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the exact type, age, condition, location or manufacturer of equipment we may purchase; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the exact clients with whom we will transact with and their ability to pay; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the duration, rental rates, currency, governing laws and other terms of leases and other contracts we may enter into; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the price we will pay for equipment and the residual value investment we will make into equipment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the amount of debt that will be used in our portfolio; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the diversification of equipment, industry and client types within our portfolio. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may invest in the types of equipment listed in &#147;Investment Objectives and Policies.&#148; We anticipate investing directly and
indirectly in a diversified portfolio of equipment and equipment related transactions in accordance with our investment objectives. However, you must rely upon our manager&#146;s judgment and ability to,
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">18 </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
among other things, select the equipment to purchase, evaluate the equipment&#146;s condition, evaluate the appropriate residual value investment to make into the equipment, determine appropriate
levels of debt to be incurred, evaluate the ability of our clients to continue paying rent and negotiate purchase documents. We cannot guarantee that our manager will achieve our investment objectives. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Investments in our shares are effectively illiquid. There is no active trading market for our shares. You should be prepared to hold your shares
for the duration of the fund, which is anticipated to be approximately eight years but which may be longer. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our shares
will not be listed on any national securities exchange at any time and we will take steps to ensure that no public trading market develops for our shares. See &#147;Federal Income Tax Consequences.&#148; Your ability to sell or transfer your shares
will be very limited. You should be prepared to hold your shares for the life of the fund, which is anticipated to be approximately eight years but which may be longer, as adverse market conditions for some kinds of equipment may exist and require a
longer period to dispose of the equipment. Moreover, even if you are able to transfer some or all of your shares, you may receive less than the amount of your original investment or suffer adverse tax consequences. In addition, under our operating
agreement, our manager has the discretion under certain circumstances to prohibit transfers of shares, or to refuse to consent to the admission of a transferee as a member. See &#147;Summary of Our Operating Agreement&#150;Transfer of Our Shares and
Substitute Members.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>If you request that we repurchase your shares, the price you receive may be substantially less than you would
receive if you were to hold your shares for the duration of the fund. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You may request that we repurchase some or all
of your shares at any time. However, we are under no obligation to redeem any of your shares and we will not maintain a cash reserve for this purpose. If we do agree to redeem your shares, the redemption price has been unilaterally set. Depending
upon when you request a repurchase, the repurchase price may be less than the unreturned amount of your investment. See &#147;Redemption of Shares.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>The amount and timing of monthly distributions may vary over time. Cash distributions may not be made every month. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">From time to time, our manager may vary the amount of, or completely suspend, cash distributions to investors if it believes it to be in the best interests of the fund to do so. Losses from fund
investments or unavailability of liquid assets may also result in reductions or suspensions of distributions. Furthermore: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">during the liquidation period, cash distributions may be irregular while fund investments are being disposed; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">large returns of capital during the life of the fund will reduce the cash available for future distributions. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">While our manager anticipates making monthly cash distributions, you should not rely on the cash distributions from your shares as a
regular source of cash. See &#147;Income, Losses and Distributions.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>If we raise less than our maximum offering amount, our
portfolio may be less diversified than would otherwise be the case. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may begin operations with a minimum
capitalization of $1,200,000. Should we raise less than our maximum offering amount of $200,000,000, our portfolio and our clients may be less diversified than would otherwise be the case. At our minimum capitalization or at low levels of
capitalization, we will purchase only low cost items of equipment, such as information technology, gas meters or individual rail cars, rather than high cost items of equipment. As we will be limited in the types and number of transactions we may
enter into, a single transaction may have a greater impact on the overall performance of our portfolio. If we only raise the minimum offering, or have a low level of capitalization, a loss on any single transaction may have a greater negative impact
on our financial performance. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">19 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>If we do not raise our minimum offering amount, we will not commence operations. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We require a minimum capitalization of $1,200,000 to commence operations. If the amount of proceeds raised in the 12 months after the
effective date of the registration statement of which this prospectus is a part are insufficient to constitute the minimum offering, all subscription funds deposited by you into our escrow account will be returned to you, together with any interest
earned and without deduction for fees, commissions or expenses. In such a case we will not begin any business operations, we will not make any investments and we will not make any distributions. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our manager will manage our operations and may make decisions with which you do not agree or which do not achieve our business objectives. You will
have very limited voting rights or ability to remove our manager. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will have all management control over
our operations. Our success will significantly depend upon: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the ability of our manager to source appropriate transactions for us in a timely manner; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the quality of the investment decisions our manager makes, especially relating to the types of equipment into which we invest, the timing and
management of those investments, assessments of our potential clients and the residual value investments we make in equipment; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s ability to extract maximum value from equipment once that equipment reaches the end of its lease term. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not grant our manager or its affiliates an exclusive right to sell equipment on our behalf. However, given the relationship
between our manager and other members of the Macquarie Group, we anticipate that most, if not all, of our equipment will be remarketed by our manager or our manager&#146;s affiliates. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">An affirmative vote of members owning not less than a majority of our shares is required to remove our manager or anyone else as manager.
You should not purchase our shares unless you are willing to entrust all aspects of our management to our manager. You will have only limited voting rights and you are not permitted to take part in managing, establishing or changing our investment
objectives or policies. See &#147;Summary of Our Operating Agreement.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our manager will receive substantial fees from us which
will reduce the cash available for distribution. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay our manager, its affiliates and third party selling
dealers fees and expense reimbursements. See &#147;Management Compensation.&#148; The rate of fees has been unilaterally determined by our manager in accordance with guidelines set forth in the NASAA Guidelines. The NASAA Guidelines are a set of
protocols administered by the North American Securities Administrators Association that address the formation and operation of direct participation programs, such as us. See &#147;Glossary.&#148; Certain of these fees, including the selling
commissions, the dealer manager fee and acquisition fees, as well as the organization and offering expense allowance, may be paid without regard to the profitability of our operations or the cash available for distribution to investors. Because we
will use leverage to acquire our investments, the amount of fees and expense reimbursements payable by us to our manager and its affiliates will be higher than if we did not use leverage. The payment of those fees will reduce the overall cash
available for distribution to you over the life of the fund. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>An investment in our shares is not a complete hedge against high
inflation. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">An investment in our shares is not a complete hedge against periods of high inflation. During periods of
high inflation, we expect that the value of equipment in our portfolio may be higher than would otherwise be the case. Also, rental payments we receive may increase under floating, as opposed to fixed, rate leases where interest rates rise in
conjunction with higher inflation. However, our inflation-adjusted returns may be adversely affected where rental payments made by clients are fixed throughout the lease term and there are no adjustments in the rental payments for inflation.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">20 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our assets may be plan assets for ERISA purposes, which could subject our manager to additional
restrictions on its ability to operate our business. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under the look-through rule applied under ERISA and the Code, the
assets of an entity in which an employee benefit plan or other tax-exempt investor has made an equity investment may constitute assets of that investor. If you are a fiduciary of a qualified plan or IRA, you should consult with your advisors and
carefully consider the effect of that treatment if that were it to occur. See &#147;ERISA Considerations.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>The price of the shares
offered by this prospectus has been arbitrarily determined. You should not rely on this price as an indication of the value of the shares. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The offering price per share has been determined arbitrarily and is not based upon our actual or potential earnings or any other traditional criteria for determining value. No representation is made
hereby that a share has a market value equal to the purchase price or could be sold at the price or at any other price. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_10">
</A>Risks Associated With Our Equipment Leasing Activities </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>If a client is in payment default under a lease contract with us, we may
incur losses. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our lease contracts will require our clients to make periodic rental payments to us. Leases and other
associated contracts may, in some circumstances, also require clients to pay other amounts to us in the form of equipment purchase option prices, extended term rentals, late payment interest and damages. If a client fails to make required payments
to us under a lease: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we may lose rental or other revenue which we may not be able to recover; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we may incur legal and other costs in taking enforcement action against a client or in repossessing, storing and transporting the equipment;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we may incur costs in breaking financing arrangements associated with the lease, including costs associated with the early termination of loans or
hedging arrangements; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we may incur losses when selling equipment earlier than originally anticipated. This risk is greater for equipment which depreciates rapidly in market
value, such as computer equipment. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The risk of payment default under a lease is greater for clients with
lower or no credit ratings. Although we will seek to enter into transactions where we believe the likelihood or consequence of client payment default is acceptable under the circumstances or where acceptable security is available, we will not
necessarily require our clients to have a minimum credit rating determined by an independent rating agency. See &#147;Investment Objectives and Policies.&#148; We may incur losses if one of our clients defaults on a lease with us, which could have a
material adverse effect on our financial condition. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>In addition to payment defaults, if a client is in another form of default under a
lease contract with us, we may incur losses. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition to the requirement for our clients to make payment to us, our
clients will have other obligations to us under a lease. These may include obligations to maintain and service the leased equipment; to ensure there is no material adverse change in our client&#146;s financial position; to insure the equipment; to
furnish certain information to us; and to allow us to inspect the equipment. If a client fails to maintain equipment in accordance with the terms of its lease, we may have to make unanticipated expenditures to repair the equipment in order to
protect our investment. We are likely to have rights against the client to compensate us for any failure to maintain equipment to the appropriate standard. However, we cannot assure you that this compensation would make us whole for losses in our
investment or that the client will be able to pay us. If a client is in default under a lease contract, it may not be economically feasible for us to take legal action against the client, terminate the lease and/ or repossess the equipment. Should
this occur, we may incur losses associated with legal, repossession and other costs. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">21 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Adverse general economic conditions may negatively impact our clients&#146; ability to pay us, causing
us losses. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Adverse general economic conditions may cause financial distress to our leasing clients, which in turn may
increase the likelihood that they will fail to meet their contractual obligations to us, including the obligation to make rental payments or restitution for damages. We may incur losses if one of our clients defaults on a lease with us, which could
have a material adverse effect on our financial condition. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Any delays in the investment of the offering proceeds may diminish the
returns on our investments. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will receive only minimal, if any, returns on the offering proceeds until the time the
offering proceeds are invested in equipment lease or other equipment related transactions. If we do not invest the offering proceeds promptly, the delay may diminish the returns that the investment would have otherwise realized had a given
investment been made earlier. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Some of the equipment that we purchase may be used equipment which, if not in proper condition, may
reduce its resale value. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Some of the equipment that we purchase may be used equipment. For example, this will occur
where we enter into a &#147;sale and leaseback&#148; transaction with a lessee that is also the seller of the equipment. While we may inspect used equipment prior to purchase, there is no assurance that any inspection of used equipment prior to its
purchase will reveal any or all defects and problems with the equipment that may occur after it is acquired by us. We will seek to obtain representations from the sellers and lessees of used equipment that the equipment has been maintained in
compliance with the terms of their leases, including: that neither the seller, as lessor, nor the lessee, is in violation of any material terms of those leases; that the equipment is in good operating condition and repair; and that the lessee has no
defenses to the payment of rent for the equipment as a result of its condition. We would have rights against the seller of the equipment for any losses arising from a breach of representations made to us, and against the lessee for any default under
the lease. However, we cannot assure you that these rights would make us whole with respect to our entire investment in the equipment or that our expected returns on the equipment, including legal costs, costs of repair and lost revenue from the
delay in being able to sell or re-lease the equipment due to undetected problems or issues. Losses incurred due to reduced resale value could have a material adverse effect on our financial condition. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>If a client files for bankruptcy, we may have difficulty enforcing the terms of the lease and may incur losses. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In the event that a client files for protection under bankruptcy laws, a bankruptcy court may reject, reduce the term or alter the
provisions of our lease with that client. If this happens, we may not receive the full amount of rental payments contemplated by that lease. We may also experience difficulties, legal costs and delays in recovering equipment from a bankrupt client
that is involved in a bankruptcy proceeding or has been declared bankrupt by a bankruptcy court. The sales proceeds we receive from disposing of recovered equipment may not cover our outstanding investment in that equipment. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Movements in foreign currency rates may result in losses. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We may enter into purchase, sale and lease contracts for equipment where the payments to be made or received are not in U.S. dollars. Foreign exchange hedging contracts are, for a fee, a means of
protecting against fluctuations in foreign currency exchange rates. While we intend to enter into foreign exchange hedging contracts where it is both possible and economically appropriate to do so, our portfolio may not be fully hedged against
foreign currency fluctuation risk. If we are due to receive payments from a client or purchaser in a currency other than U.S. dollars, a strengthening of the U.S. dollar against that currency will mean we are receiving less, as expressed in U.S.
dollars, than initially anticipated, which would have a negative impact on our returns. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">22 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>We may suffer losses as a result of transacting business in foreign countries, dealing with foreign
clients or having our equipment located in a foreign jurisdiction. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">It is likely that we will enter into transactions:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">with foreign clients; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">where the equipment is permanently or temporarily located outside the U.S.; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">where the contracts are governed by foreign laws. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">These transactions involve a number of risks, including the following: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may have difficulty enforcing our rights under foreign contracts. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may have difficulty repossessing our equipment outside the U.S. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Legal costs may be more expensive outside the U.S. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Foreign governments may confiscate equipment, nationalize equipment, retrospectively change laws, impose new or changed fees, duties or taxes or impose
foreign exchange restrictions which hamper our ability to receive payment in the U.S. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Foreign courts may not recognize judgments obtained in U.S. courts. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may have documentary risks where contracts are written in a language other than English. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Complications may arise from interpretations of tax or legal codes and any regulatory registration requirements. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Changes in, or interpretations of, foreign laws and regulations may adversely affect our ability to enter into leases, sell equipment or repatriate
profits to the U.S. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The income earned in foreign jurisdictions may be subject to withholding and/or income taxes, and depending on the foreign country, the U.S. may not
have a tax treaty in place to reduce or eliminate the tax. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Code imposes restrictions on the use of foreign tax credits, which may prevent you from claiming full credit for your share of foreign taxes. See
&#147;Federal Income Tax Consequences&#150;Foreign Tax Considerations for U.S. Investors.&#148; </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Furthermore, foreign jurisdictions and clients may be more prone to corruption, unsavory business practices, conflict, sanctions or civil
unrest. All of these risks may impair our ability to receive amounts due to us or to remarket equipment in a satisfactory manner. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>The
market value of our equipment may be lower than anticipated, resulting in a loss on our investment. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">It is likely that
the majority of our leases will be &#147;operating&#148; or &#147;non-full payout&#148; leases. Under non-full payout leases, the total sum of all the rental payments made by our client over the duration of the lease, on a present value basis, will
be less than the original price paid by us for the initial purchase of the equipment. The difference between the original purchase price of the equipment and the sum of the rentals we receive over the lease term, adjusted for the time value of
money, is known as our &#147;residual value&#148; investment. In general, a client will return the leased equipment to us at the end of the lease. We will then sell or re-lease the equipment for an amount that we refer to as the &#147;remarketing
price.&#148; We hope to make a return on our investment by obtaining a remarketing price that is in excess of our residual value investment in that equipment. This is where we expect to make a significant portion of our overall returns. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">When we enter into a lease, we will not know what the remarketing price of the leased equipment will be when the lease ends and the
equipment is returned to us. If the remarketing price is lower than anticipated, we </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">23 </FONT></P>



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will either lose money or receive lower returns than anticipated. There are numerous factors beyond our control which can materially adversely affect the remarketing price we can achieve for
equipment, including: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the general market value for the equipment at the time we are attempting to remarket that equipment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the cost of new equipment at the time we are remarketing the used equipment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">technological and regulatory developments since our initial purchase of the equipment which could reduce the market value of the equipment;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">general economic conditions and the conditions in industry-specific market sectors; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the condition of the equipment returned to or repossessed by us. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Additionally, there is a risk that the best remarketing price available is only obtainable in a market where we do not have appropriate
or adequate remarketing resources. We cannot assure you that our assumptions with respect to value will be accurate or that the equipment will not lose value more rapidly than we anticipate. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>We may not require clients to insure equipment, clients may not insure equipment in breach of their lease contract, or it may not be feasible to insure some risks, resulting in loss of our
investment and additional losses. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may not require clients to insure equipment against loss, damage, theft,
destruction or injury or against damage caused through the use of the equipment. For example, we may not require insurance where the value of equipment is relatively low or where it is not customary for the client to obtain insurance. Other risks
may not be insurable or may not be economically feasible to insure. Furthermore, clients who are obliged to insure equipment may nevertheless fail to do so in breach of their lease contract. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our clients will generally be responsible for risk of loss or damage to or caused by equipment, regardless of whether insurance is in
place. However, where losses or damage are not covered by insurance, there is a risk that the client will be unable to compensate us for those losses. In this case, we may lose all or part of our investment or incur losses significantly in excess of
our investment, which could have a material adverse effect on our financial condition. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>In leasing some types of equipment, we may be
exposed to environmental tort liability. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In leasing some types of equipment, such as transportation assets designed to
carry hazardous materials, we may be exposed to environmental tort liability. Although we will use reasonable efforts to minimize the possibility of and exposure to environmental tort liability, including by means of attempting to obtain insurance,
we cannot assure you that our assets will be protected against those claims. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Failure to maintain equipment registrations and unexpected
regulatory compliance costs may result in losses. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Certain types of transportation equipment are subject to
registration requirements by governmental agencies in the U.S. and abroad. Should we fail to properly maintain registration of that equipment, we may lose the ability to own or operate that equipment. In addition to impairing our ability to earn
rentals from that equipment, penalties may be imposed upon us and we may be forced into a sale of that equipment on unfavorable terms. Furthermore, governmental agencies may require changes or improvements to equipment resulting in increased costs
and loss of rental revenue while the changes are made. This would adversely affect our anticipated returns from that investment. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our
returns may be lower than anticipated under pay per use agreements. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under a pay per use agreement, the regular rental
payments due from the client are not fixed or determined solely by reference to an underlying interest rate. Instead, the amount the client pays for the use of the equipment is based upon their actual usage of the equipment. Under these agreements,
a client will typically pay more for the equipment the more often it uses the equipment. Where a client under a pay per use agreement uses the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">24 </FONT></P>



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equipment less than we anticipated, this may possibly result in a higher resale value for the equipment which may in turn benefit us. However, we will receive lower payments from clients from
their usage of the equipment and this may in turn reduce our returns from that investment. While our manager anticipates that pay per use agreements will be a small part of our portfolio, there is no restriction on the proportion of our portfolio
that may be invested in pay per use agreements. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_11"></A>Risks Associated With Our Equipment Trading and Other
Activities </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The risks outlined above in &#147;Risks Associated with our Equipment Leasing Activities&#148; and elsewhere in
this section and prospectus are also applicable to our equipment trading and other activities, including risks relating to our clients&#146; ability to pay, general economic conditions and foreign currency rates. In addition to these risks, the
following risks are also applicable: </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Equipment trading transactions and investments in equipment purchase options, total lease return
swaps, participation agreements or other similar transactions related to equipment may be riskier than equipment lease transactions. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We may purchase equipment without any concurrent lease agreement or sale agreement being in place. In those transactions, we are anticipating that purchased equipment can be sold or leased at a later date
at a profit. These transactions may be inherently more risky than equipment purchases concurrently combined with a lease being entered into with a client. Should the market for equipment purchased by us on such a basis drop after our purchase, we
may incur losses on the resale of the equipment and costs in storing and remarketing that equipment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may acquire equipment
purchase options or obligations to purchase equipment. We anticipate that these transactions would be for a pre-determined price at a future date, usually at the end of an underlying lease term. In the event of a bankruptcy by the party granting the
option or obligation, we might be unable to enforce the option or obligation or recover the option price paid. If the option grantor or seller defaults under the transaction contract, we may incur legal and other costs to enforce our rights but may
not ultimately gain ownership of the equipment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may also enter into total lease return swaps, participation agreements and
other transactions related to equipment. Under those arrangements, we may not have a direct ownership interest in equipment. Instead, we will have a right to receive, and an obligation to make, payments associated with, or with reference to, the
underlying equipment or equipment lease. In the event of default or bankruptcy by the other party to the transaction, we may not be able to recover payments we are owed or have recourse to the underlying equipment. We will not enter into stock, bond
or other exchange traded derivative contracts. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Investment in joint ventures, special purpose companies or companies which own equipment
may subject us to risks relating to our co-investors or underlying companies that could adversely impact the financial results of those investments. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We may invest in joint ventures with other businesses operated by our manager, our manager&#146;s affiliates, including Macquarie Equipment Leasing Fund, LLC, or with unrelated third parties. We may also
invest, either on our own account or with others, in special purpose companies created specifically for equipment investments or to invest in companies which own or operate equipment. We will not, however, invest in the shares or partnership
interests of other equipment leasing programs. Investing in joint ventures, special purpose companies and other companies involves additional risks not present when acquiring equipment that will be wholly-owned by us directly. These risks include
the possibility that our co-investors might declare bankruptcy or otherwise fail to meet financial commitments, thereby obligating us to pay all of the debt associated with the joint venture. Additionally, the co-investors or underlying companies
may have objectives which are not wholly consistent with </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">25 </FONT></P>



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our investment objectives. This may result in ineffective decision making, impasses on joint venture decisions, disputes and failure to maximize our returns. Furthermore, even if we have the
right to purchase equipment from another joint venturer, we may not have the resources to do so. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_12"></A>Risks
Associated With Our General Business Operations </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Key personnel may leave our manager&#146;s organization, diminishing the expertise
and resources available for management of us and our business activities. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our success will be dependent upon our
manager utilizing sufficient and appropriately skilled resources and personnel to manage us and our business affairs. We will require resources and personnel including transaction origination, lease and asset management, equipment remarketing,
accounting, tax, legal, compliance, operational, investor relations and marketing resources and personnel. These resources and personnel may be provided exclusively by our manager or utilized on an as-needed basis from affiliates of our manager.
Many of these personnel will be difficult to replace on short notice where the departing personnel hold special relationships, such as relationships with potential clients, or special technical knowledge, such as knowledge about the likely future
resale value of specific types of equipment. The departure of key personnel from our manager or affiliates of our manager may result in business disruptions, poor investment decisions and reduced returns from our portfolio. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>There may be conflicts of interest between us and our manager and its affiliates. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager&#146;s decisions will be subject to various conflicts of interest arising out of its relationship to us and its affiliates. As
of the date of this prospectus, affiliates of our manager are engaged in equipment lease and trading activities on their own behalf and on behalf of other investors. Our manager sponsors another equipment leasing program currently in its operating
phase, and our manager may sponsor additional equipment leasing programs in the future. See &#147;Fiduciary Duties and Conflicts of Interest&#148; and our operating agreement attached hereto as Appendix A for more detailed information. Conflicts of
interest that may affect us and our members include: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the receipt of fees and other compensation by our manager and its affiliates from us; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager and its affiliates, including other equipment leasing programs sponsored by our manager, may compete with us for investments in equipment;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s decisions regarding the use of leverage and reserves will affect our cash distributions and our manager&#146;s compensation;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager or its affiliates may purchase shares as an investor; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we will rely on the employees of our manager&#146;s affiliates; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the resolution of conflicts will be undertaken by employees of our manager&#146;s affiliates; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">no independent underwriter conducted due diligence with respect to this offering; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we and our manager are not represented by separate counsel; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager will act as our tax matters partner, and will negotiate with the Internal Revenue Service, or IRS, to settle tax disputes that would bind
us and our members; those negotiations might not be in your best interest given your individual tax situation. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In particular, our manager may cause us to enter into transactions with its affiliates. These related party transactions may include: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">agreements for services to be provided to our manager or to us by our manager&#146;s affiliates; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">agreements for the sale of equipment, equipment leases and/or other transactions to, or from, us from, or to, our manager or affiliates of our manager.
This category of transaction includes transactions </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">26 </FONT></P>



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<TD VALIGN="top"> <P><FONT STYLE="font-family:Times New Roman" SIZE="2">
where we are buying equipment or transactions from our manager or our manager&#146;s affiliates which were specifically purchased by our manager or our manager&#146;s affiliates for sale to us,
which we refer to as &#147;warehousing&#148; of transactions on our behalf. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Related party transactions may
provide advantages to us, including the possibility of accessing appropriate lease transactions otherwise unavailable to us, or making investments in equipment that was purchased by our manager&#146;s affiliates prior to us having sufficient capital
to make the purchase ourselves. However, these related party transactions provide our manager and its affiliates with an economic incentive to negotiate the transaction in a manner which is disadvantageous to us, for example, by selling equipment to
us for a price above its market value. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing conflicts could result in materially adverse effects on us and our
members. Our manager, in its sole discretion, will attempt to manage those potential conflicts by the exercise of its business judgment and through policies and procedures designed to minimize the possibility of conflicts of interest. There is no
assurance that these measures will prevent adverse consequences resulting from the numerous potential conflicts of interest. Additionally, should the manager be in breach of its fiduciary duty to us, it is unlikely that we will initiate legal action
against our manager as our manager controls our operations. See &#147;Fiduciary Duties and Conflicts of Interest.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Directors and
other personnel or resources associated with our manager will manage or be involved with other businesses and activities and will not devote their time exclusively to managing us and our business. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not employ our own full-time officers, managers or employees. Instead, our manager will supervise and control our business
affairs. Our manager&#146;s officers and staff providing services to our manager will also be spending time supervising the affairs of other equipment leasing programs now and in the future. They may also spend time on other projects and businesses
of our manager and its affiliates. They will devote the amount of time necessary to conduct our business, which may not be the same amount of time that would be devoted to us if we had separate officers and employees. See &#147;Fiduciary Duties and
Conflicts of Interest.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Furthermore, our manager will be reliant upon its affiliates introducing potential transactions
to our manager which we may or may not invest in. Our manager&#146;s affiliates will devote their time and resources primarily to their own businesses and not to us or our manager. This may result in us receiving fewer opportunities than if we had
our own full-time employees. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>We and our manager do not have independent audit and compensation committees </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Although our manager believes that the fees and other compensation we will pay to it and its affiliates are reasonable and competitive in
the industry, they were established by our manager and were not determined by an independent compensation committee composed of persons who are not affiliates of our manager. See &#147;Management Compensation.&#148; Also, our manager, rather than an
independent audit committee composed of persons who are not affiliates of our manager, will select our independent registered public accounting firm and supervise the preparation of our audited financial statements included in our annual reports to
you. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our use of debt financing means our losses may be greater than if debt financing were not used. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will use debt, or leverage, when we acquire equipment and may also use debt for working capital purposes. Debt finance we use may
include: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">debt which is used to purchase specific items of equipment. In the event of payment default by the underlying lessee, the third party debt provider may
or may not have recourse against us to make good the payment default. The third party debt provider may also have priority over us in its security interest in the equipment or proceeds from the equipment; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">debt which is secured against all or part of our portfolio. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">27 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We anticipate that the level of debt across our portfolio will be approximately 40.0% of the
total purchase price of all equipment in our portfolio, and once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio. This means that the total value of
equipment that we purchase may be significantly higher than the actual capital we raise. While the use of debt can enhance our returns, it also carries material risks, including the following: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">If we are unable to pay our debt obligations because of the failure of our clients to make timely payments to us, or due to other factors, we may lose
the underlying equipment and our investment. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">For any given lease or other transaction, using debt will increase the sensitivity of our investments to changes in the resale value of equipment in
which we have invested. A negative movement in the resale value of equipment will have a greater negative impact on our returns than had we not used debt. This in turn will negatively impact our ability to pay distributions to you.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Lenders may require covenants that could restrict our flexibility in making business and financing decisions in the future, and in order to repay our
financing, we may be required to dispose of our assets at a time when we would otherwise not do so. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A highly leveraged capital structure may significantly increase the cost at which we can borrow additional funds, which will in turn negatively impact
our ability to pay distributions to you. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The use of debt will also increase the fees that we will pay our
manager. See &#147;Investment Objectives and Policies&#150;Borrowing Strategies and Limitations.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Debt finance may be unavailable
on appropriate terms resulting in our portfolio being leveraged at a sub-optimal level. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We intend to incur
indebtedness in purchasing our portfolio. The use of leverage can assist in enhancing returns and is a commonly used strategy in equipment financing. During periods of general illiquidity in financial markets, such as existed during 2008 and 2009,
it may not be possible for our manager to source debt at an appropriate interest rate, on appropriate terms or at appropriate levels. Furthermore, we are prohibited from obtaining permanent debt facilities from our manager or its affiliates. This
may mean our portfolio is sub-optimally leveraged, reducing overall returns to our investors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If debt on appropriate terms is
not available to us at all, the reduced leverage of our portfolio may significantly reduce overall returns and distributions to our members. It may also result in us not completing otherwise attractive equipment acquisition opportunities, further
reducing our overall returns. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Disruptions to our information technology systems may result in business disruptions and losses.
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will rely upon multiple information technology systems that it or its affiliates operates to effectively
manage our business operations, including lease management systems, accounting systems, invoicing systems, investor and sales databases, website and client relationship systems. Furthermore, our manager may be reliant upon the information technology
systems of third party service providers. Failure of any of these systems may disrupt our ability to bill for or collect payments, pay distributions, meet regulatory requirements or track our assets. Those disruptions may result in additional costs
and damage to relationships with key clients, in turn hampering our ability to source future lease transactions. Accordingly, any information technology disruptions could have a material adverse effect on our financial condition. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">28 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>The equipment leasing industry is highly competitive, which may hinder our ability to source
appropriate or attractive investments. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The equipment leasing industry both in the U.S. and abroad, and across
different equipment classes, is highly competitive. In particular: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">it is often relatively easy for new entrants to enter the equipment leasing industry as lessor; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">leasing companies often act irrationally or unprofitably to gain market share, reducing the availability of attractive lease transactions to other
lessor in the market; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">lease transactions are not always written in a manner which provide the lessor with an appropriate rate of return for the risk being assumed.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Although certain affiliates of our manager are experienced leasing companies, the existence of a high
number of competitors in the equipment leasing industry may hinder the ability of affiliates of our manager to introduce attractive or appropriate lease transactions to our manager. It may also hamper the ability of our manager to source those
transactions directly itself. This may result in lower than anticipated returns from our investments or acceptance of greater levels of risk in our investments. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Changes in interest rates may negatively affect our returns </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Changes
in interest rates may have a negative effect on our returns. We primarily intend to enter into lease agreements which are &#147;fixed-rate,&#148; whereby the rental payments are fixed for the duration of the lease. We may also enter into lease
agreements which are &#147;floating rate,&#148; whereby rental payments during the lease vary with reference to an underlying interest rate. Interest rate hedging contracts are, for a fee, a means of protecting against fluctuations in interest rates
associated with floating rate leases. While we intend to enter into interest rate exchange hedging contracts for floating rate leases where it is both possible and economically appropriate to do so, our portfolio may not be fully hedged against
interest rate fluctuation risk. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">During periods of high or rising interest rates, we may be able to enter into lease
transactions whereby the lessee is obliged to make higher fixed rental payments to us. Under unhedged floating rate contracts we will also effectively receive higher rental payments. However, higher interest rates may be more likely to result in
lessee payment defaults and bankruptcies which in turn may result in losses on our investment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">During periods of low or
falling interest rates, rental payments that we receive under unhedged floating rate leases will effectively be reduced. Fixed rate lease contracts and hedged floating rate leases will also be written at lower rental rates. This may also reduce our
investment returns. Furthermore, periods of low interest rates may be combined with general economic periods of &#147;high liquidity&#148; or easier access to debt. In those instances, the economic benefit for lessees of leasing compared to other
forms of financing may be diminished, thus adversely affecting our ability to enter into appropriate lease transactions. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_13">
</A>Risks Associated With the Tax Treatment of Us and Our Shares </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Adverse tax consequences will result if the IRS classifies us as a
corporation rather than a partnership. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our counsel has rendered an opinion to us that we will be taxed as a
partnership and not as a corporation as long as we meet certain requirements set forth in the opinion; however, that opinion is not binding on the IRS and the IRS may challenge that classification. We will not apply for an IRS ruling that we will be
classified as a partnership for federal income tax purposes. If we are treated for federal income tax purposes as a corporation in any year, then: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we would be required to pay federal income taxes on our taxable income; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">state and local income taxes could be imposed on us; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our losses would not be reportable by our members on their personal income tax returns; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">any distributions would be taxable to our members; and </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">29 </FONT></P>



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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">distributions would be classified as portfolio income which would not be available to offset passive activity losses. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition, a change in status from a partnership to a corporation could result in taxable income to a member. To minimize the
possibility that we will be treated as a corporation, our operating agreement places restrictions on your ability to transfer our shares. You and your advisors should not only review the &#147;Federal Income Tax Consequences&#148; section with care,
but also carefully review your own individual tax circumstances. See &#147;Federal Income Tax Consequences&#150;Classification as a Partnership.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>We and our members could lose deductions if the IRS treats our operating leases as sales or finance leases. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">No assurance can be given that our leases of equipment will be treated as operating leases by the IRS rather than as sales or finance leases. An operating lease is one where, in present value terms, the
sum of the rentals paid by the lessee over the lease term is less than the original purchase price paid by the lessor for the leased equipment. A finance lease is one where the rentals paid by the lessee, plus any other fixed payments the lessee is
obliged to make under the lease, compensate the lessor in full for the purchase price paid by the lessor for the equipment at the outset of the lease, plus a satisfactory return. If our leases are treated as sales or finance leases instead of
operating leases, we and our members will not be entitled to cost recovery, depreciation or amortization deductions with respect to those leases and our leasing income might be deemed to be interest which would constitute portfolio income instead of
passive income. The denial of the cost recovery, depreciation or amortization deductions could cause your tax liabilities to increase. We do not intend to apply to the IRS for a ruling that any leases of equipment will be treated as leases for
federal income tax purposes. See &#147;Federal Income Tax Consequences&#150;Tax Status of Leases&#148; and &#147;Federal Income Tax Consequences&#150;Limitation on Deduction of Losses.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>You may incur tax liability in excess of the cash distributions you receive in a particular year. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Your tax liability from owning our shares may exceed the cash distributions you receive from your investment. For example, to the extent any of our debt is repaid with rental income or proceeds from
equipment sales, taxable income could exceed the related cash distributions. Also, our use of the accrual method of accounting may require us to include rental income before the rental payments are received and available for distribution. Further,
sales of our investments may result in taxes in any year that are greater than the amount of cash from the sale and result in tax liability to you in excess of cash distributions. Therefore, you will have to pay any excess tax liability out of other
funds. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>You may be subject to greater income tax obligations than originally anticipated. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We expect that some of the equipment that we purchase may be eligible for accelerated depreciation under the Modified Accelerated Cost
Recovery System. See &#147;Federal Income Tax Consequences&#150;Cost Recovery Deductions.&#148; However, a significant portion of our equipment may be used predominately outside the U.S. and will therefore not be eligible for accelerated
depreciation. That equipment is generally depreciated over longer cost recovery periods than comparable equipment used inside the U.S. In addition, if we acquire equipment that the Code deems to be tax-exempt use property, losses attributable to the
equipment will be suspended and may be deducted only against income we receive from that equipment or when we dispose of the equipment. Furthermore, depreciation deductions may not be available under total lease return swaps, participation
agreements and other transactions in which we invest. Depending on the equipment that we acquire and its eligibility for accelerated depreciation under the Code, we may have less depreciation deductions to offset gross lease revenue, thereby
increasing our taxable income. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Your ability to deduct our losses will be limited. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In general, the amount that you have at risk with respect to our shares is deemed to be the amount of your investment, plus any profit
allocations and minus any loss allocation and distributions. The amount that you have at risk will limit your ability to deduct our losses. A tax rule further limits your ability to deduct losses from an
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">30 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
activity to the amount at risk in that activity and treats equipment placed in service in separate years as separate activities. Because our operations will constitute passive activities, you
will also be restricted to using our losses to offset passive income in calculating tax liability. Furthermore, passive losses may not be used to offset portfolio income. See &#147;Federal Income Tax Consequences&#150;Limitation on Deduction of
Losses.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>The IRS may allocate more taxable income to you than our operating agreement provides. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The IRS might successfully challenge our allocations of profits or losses. If so, the IRS would require reallocation of our taxable income
and loss, resulting in more taxable income or less loss for you than our operating agreement would otherwise allocate. See &#147;Federal Income Tax Consequences&#150;Allocations of Profits and Losses.&#148; </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>If you are a tax-exempt organization, you will have unrelated business taxable income from this investment. </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Tax-exempt organizations are subject to income tax on unrelated business taxable income, or UBTI, and are required to file federal income
tax returns if they have UBTI from all sources in excess of $1,000 per year, less directly connected allowable deductions. Our leasing income will constitute UBTI. Furthermore, a charitable remainder trust that recognizes UBTI will be subject to an
excise tax equal to 100% of that income. All tax-exempt entities are urged to obtain the advice of a qualified tax advisor on the effect of an investment in our shares. See &#147;Federal Income Tax Consequences&#150;Investment by Employee Benefit
Plans and Other Tax-Exempt Organizations.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Ownership of our shares may cause you to pay alternative minimum tax.
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">With limited exceptions, taxpayers must pay an alternative minimum tax if it exceeds the taxpayer&#146;s regular
federal income tax for the year. As you will be allocated a proportionate share of our tax preference items, you may be required to pay alternative minimum tax. The principal partnership tax items that may have an impact on your alternative minimum
tax as a result of investing in us are (1)&nbsp;cost recovery deductions on the portion of our equipment leased to others under operating leases, and (2)&nbsp;deductions relating to our interest expense on borrowings. See &#147;Federal Income Tax
Consequences&#150;Alternative Minimum Tax.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>You may incur state tax and foreign tax liabilities and have an obligation to file
state or foreign tax returns. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Prospective investors should consider applicable state and local taxes which may be
imposed by various jurisdictions. Investors may be subject to state tax rules which are less favorable than federal tax rules. Investors should consult their own tax advisors to fully determine the impact to them of U.S. federal, state and local
income tax laws, including laws requiring withholding on our income and/or distributions. See &#147;Federal Income Tax Consequences&#150;State and Local Taxes.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Some of the distributions on our shares will be a return of capital, in whole or in part, which will complicate your tax reporting and could cause unexpected tax consequences at liquidation.
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As the value of our portfolio decreases over the term of our existence, a portion of each distribution will be
considered a return of capital, rather than income. Therefore, the dollar amount of each distribution should not be considered as necessarily being all income to you. The Schedule K-1 statement you receive from us each year will specify the amounts
of capital and income you received throughout the prior year. Further, your capital in our shares is reduced for tax purposes over the life of your investment, and you will not receive a lump sum distribution upon liquidation that equals the
purchase price you paid for our shares. Payments made upon our liquidation will be taxable to the extent that those payments are not a return of capital. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">31 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Challenges by domestic and international taxation authorities could result in additional taxes and
further examination. </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will be subject to income taxes and other taxes in both the U.S. and the foreign jurisdictions
in which we operate. We are also subject to review and audit by both domestic and foreign taxation authorities. The determination of our worldwide provision for income and other taxes and current and deferred tax assets and liabilities requires
judgment and estimation. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">An adjustment to our tax return as the result of an audit could result in an examination of other items in your returns unrelated to us, or an examination of your tax returns for prior years. You could
incur substantial legal and accounting costs in contesting any challenge by the IRS or any foreign jurisdiction, regardless of the outcome. Further, because you will be treated for federal income tax purposes as a partner in a partnership by
investing in our shares, an audit of our tax return could potentially lead to an audit of your individual tax return. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">32 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_14"></A>MANAGEMENT COMPENSATION </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following tables summarize the types and estimates of all compensation, fees, profits and other payments that our manager and its
affiliates, including the dealer manager, may earn or receive, directly or indirectly, in connection with the offering of the shares or our operations. The compensation of our manager and its affiliates, including the dealer manager, was not
determined by arm&#146;s-length negotiation, but is consistent with the guidelines set forth in the NASAA Guidelines. Our operating agreement does not permit the manager to receive more than the maximum fees or expenses stated for each type of
compensation by reclassifying those items under a different category. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_15"></A>Offering Compensation </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following table sets forth compensation payable by us in connection with the sale of our shares. Our total organization and offering
expenses, which includes the dealer manager fee, the selling commissions, due diligence expenses and the O&amp;O expense allowance, is anticipated to be 11.79% of our gross offering proceeds assuming we raise our maximum offering amount, but in any
event will not exceed 15.0% of our gross offering proceeds. Footnotes are contained under the table in &#147;&#150;Operating Compensation.&#148; </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="23%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="38%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="37%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Type and Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Selling Commissions</I>&#150;payable to the dealer manager and selling dealers during the offering period.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.0% of the offering proceeds from each share sold by the dealer manager or selling dealers. We do not expect the dealer manager to
sell any of the shares offered.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not pay selling commissions for
shares sold:</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to investors whose broker-dealer waives the selling commission in whole
or in part;</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to investors by registered investment advisors affiliated with a
selling dealer who do not charge a commission in connection with an investment in the shares;</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to our manager or its affiliates;</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
selling dealers participating in this offering or any of their affiliates purchasing for their own account or their IRAs or qualified plans; or</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;pursuant to the DRP.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling dealers may provide a volume discount to investors who purchase
a large number of shares, which will reduce the selling commissions paid by us. See &#147;Plan of Distribution.&#148;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The total amount of selling commissions cannot be determined because it is based on the number of shares sold. If the minimum amount of $1,200,000 is raised, the total amount of
selling commissions will be up to $84,000. If the maximum number of 20,000,000 shares is sold, the total amount of selling commissions will be up to $14,000,000.</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">33 </FONT></P>



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<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Type and Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>


<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Due Diligence Expense
Reimbursement</I></FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">&#150;payable to the selling dealers
or the dealer manager during the offering period.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will reimburse the dealer manager and selling dealers for detailed and itemized bona fide accountable due diligence expenses. Bona fide accountable due diligence expenses will be
reimbursable only to the extent that they are presented in an itemized statement to the dealer manager, or to us in the case of the dealer manager&#146;s expenses.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The total amount of due diligence expense reimbursement cannot be determined because it is based on the amount of detailed and itemized bona fide accountable due diligence expenses
actually incurred by the dealer manager and selling dealers.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Those expenses may only include actual costs, including overhead, associated with the dealer manager&#146;s or selling dealers&#146; due
diligence activities and may not include a profit margin.</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We estimate
that bona fide, detailed and itemized accountable due diligence expenses will be approximately 0.07% of the gross proceeds of the offering. However, we may reimburse higher amounts of bona fide, detailed and itemized accountable due diligence
expenses up to a maximum of 0.5% of the gross offering proceeds of the offering.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the minimum amount of</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">$1,200,000 is raised, we estimate that the total amount of detailed and itemized due diligence expense reimbursement will be $840. If the maximum number
of 20,000,000 shares is sold, we estimate that the total amount of due diligence expense reimbursement will be $140,000.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Dealer Manager Fees</I>&#150;payable to the dealer manager during the offering period</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.0% of the offering proceeds from each share sold, including shares sold to our manager or its affiliates.</FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not pay the dealer manager fee for shares sold pursuant to the
DRP.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The total amount of dealer manager fees cannot be determined because it is based on the number of shares sold. If the minimum amount of $1,200,000 is raised, the total amount of
dealer manager fees will be $36,000. If the maximum number of 20,000,000 shares is sold, the total amount of dealer manager fees will be $6,000,000.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>O&amp;O expense allowance</I>&#150;payable to our manager during the offering period.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay our manager an allowance for our organization and offering expenses. The amount of our manager&#146;s O&amp;O expense
allowance is based upon the number of shares that are sold, including shares sold to our manager or its affiliates, as follows:</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;up to 2.40% of the offering proceeds from each share sold for the first
3,500,000 shares;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The total amount of O&amp;O expense allowance cannot be determined because it is based on the number of shares sold and the total amount of organization and offering expenses
incurred by our manager. If the minimum amount of $1,200,000 is raised, the total amount of O&amp;O expense allowance will be $28,800. If the maximum number of 20,000,000 shares is sold, the total amount of O&amp;O expense allowance will be
$3,860,000.</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">34 </FONT></P>



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<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

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<TD WIDTH="23%"></TD>
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<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Type and Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated<SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>


<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;up to 2.00% of the offering proceeds from each
share sold for shares sold that exceed 3,500,000 but amount to 10,000,000 or fewer shares; and</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;up to 1.72% of the offering proceeds from each share sold for shares
sold that exceed 10,000,000 shares.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our O&amp;O expense allowance will not
exceed the actual fees and expenses incurred by our manager or its affiliates in connection with our organization and this offering.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_16"></A>Operating Compensation </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following table sets forth compensation payable by us in connection with our investing activities, including during the offering
period, operating period and liquidation period. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="21%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="38%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="37%"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation is Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated Dollar Amount of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Acquisition Fees</I></FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(2) </SUP></FONT><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#150; payable to our manager, its affiliates and third-parties during the offering period and operating period.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.0% of the purchase price that we pay for each item of equipment or direct or indirect interest in equipment we acquire, including
under lease agreements, trading transactions, residual value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options, joint ventures and special purpose vehicles and companies. The
purchase price includes the indebtedness incurred to finance the acquisition of equipment, an interest in equipment, such as a residual interest or a joint venture interest, or an option to acquire a residual value interest in equipment assuming
that the option was concurrently exercised.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">If we pay acquisition fees to
third parties, that amount will be deducted from acquisition fees otherwise payable to our manager and its affiliates. Our manager will reduce or refund acquisition fees if our investment in equipment is less than the greater of (a) 80.0% of the
gross offering proceeds reduced by 0.0625% for each 1.0% of borrowings encumbering our equipment, or (b) 75.0% of the gross offering proceeds.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the minimum amount of $1,200,000 is raised, the total amount of acquisition fees attributable to the initial investment of offering
proceeds will be $30,743. If the maximum number of 20,000,000 shares is sold, the total amount of acquisition fees attributable to the initial investment of offering proceeds will be $5,123,777.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In calculating the estimates of acquisition fees, we have assumed that, on average,
the total indebtedness encumbering our portfolio will equal 40.0% of the total purchase price for the equipment, and that the amount available for investment in equipment, to pay acquisition fees and to create reserves, after paying total public
offering and organization expenses, will be approximately 88.0% of gross offering proceeds. We do not anticipate that the level of debt across our portfolio at any one time will exceed 40.0% of the total purchase price of all equipment in our
portfolio, and once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may also pay acquisition fees arising out of reinvestment of proceeds received from equipment sales during the offering and operating periods, up to
the limits set forth in our operating agreement.</FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">35 </FONT></P>



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<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="21%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
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<TD WIDTH="37%"></TD></TR>

<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation is Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated Dollar Amount of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>


<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Asset Management Fees</I>&#150;payable to our manager during the offering period, operating period and liquidation period.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay our manager for actively managing the leasing of our equipment in the amount equal to the lesser of:</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)(a) 5.0% of gross rental payments from non full payout leases</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> except non-full payout leases for which management services are
performed by non-affiliates under the manager&#146;s supervision for which 1.0% of annual gross rental payments will be payable; (b) 2.0% of gross rental payments from full payout leases </FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> with net lease provisions; and (c) 7.0% of gross rental payments from equipment operated on our behalf by our
manager&#146;s personnel; and</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) management fees which are competitive
and/or customarily charged by others rendering similar services as an on going public activity in the same geographic location for similar equipment transactions.</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The asset management fees continue to be payable to our manager during any extension of a term of a lease or when a new lease is entered into with the
same client or its affiliates or a different client.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The amount of asset management fees will depend upon the rental payments generated by our equipment. Since the composition and size of the equipment we will own will primarily be a
function of the amount of gross offering proceeds raised and the amount of indebtedness incurred in connection with equipment acquisitions, the total amount of asset management fees is not determinable at this time.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Re-Leasing Fees</I>&#150;payable to our manager and its affiliates during the offering period and operating period</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(4)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may pay re-leasing fees to our manager for re-leasing equipment that we own. The re-leasing fees will not exceed the lesser
of:</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) 2.0% of gross rental payments derived from the re-lease of
equipment; and</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) the competitive rate charged by others rendering
comparable services for similar equipment transactions.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The amount of re-leasing fees will depend upon the rental payments generated from equipment that is re-leased after lease expiration. The rental amounts for which equipment can be
re-leased in the future is presently unknown, as is the size and composition of the equipment that may be re-leased. For these reasons, the total amount of re-leasing fees is not determinable at this time</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Re-leasing fees will be paid as each rental payment is received over the term of the lease.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The re-leasing fee is only payable if:</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) the equipment is not re-leased to the same client or its affiliates;</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) our manager has provided substantial re-leasing services in connection with the
re-lease; and</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) our manager also performs equipment management services that entitle it to asset management fees.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not pay our manager a re-leasing fee if the manager receives a 7.0% asset
management fee.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">36 </FONT></P>



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<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation is Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated Dollar Amount of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>


<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Re-Marketing Fees</I>&#150;payable to our manager and its affiliates during the offering, operating and liquidation periods, subordinate to investor return.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may pay our manager re-marketing fees for the resale of our equipment equal to the lesser of:</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) 3.0% of the purchase price paid to us by the purchaser for each item of equipment
or direct or indirect interest in equipment acquired from us, including under lease agreements, trading transactions, residual value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase
options, joint ventures and special purpose vehicle and companies. The purchase price includes indebtedness incurred, assumed or associated with the sale of the equipment or interest in the equipment, such as a residual interest or a joint venture
interest, and in the case of equipment purchase options to acquire residual value interests, debt which would be assumed so long as the options can be immediately exercised; and;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The amount of re-marketing fees will depend upon the amount of proceeds received from equipment sales. The price at which equipment can be sold in the future is presently unknown,
as is the size and composition of the equipment that may be sold. For these reasons, the amount of re-marketing fees is not determinable at this time.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) One-half of reasonable, customary and competitive brokerage fees paid for services rendered in connection with the sale of
equipment of similar size, type and location.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our payment of re-marketing
fees to our manager is subordinate to a pre-tax 8.0% per annum internal rate of return compounded daily on all capital contributed to us, calculated on the date of distribution and taking into account all capital contributions and all distributions,
which we refer to as &#147;investor return.&#148; Investor return includes a return equal to all capital contributions we have received from you. If the manager participates with an independent broker on the resale of our equipment, the
aforementioned subordination will only apply to that part of the commission payable to our manager.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Any re-marketing fees that are not paid to our manager or its affiliates when earned because investor return has not yet been achieved will be deferred, without interest, and paid to them after investor
return is achieved.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">37 </FONT></P>



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<TD WIDTH="37%"></TD></TR>

<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation is Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated Dollar Amount of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>


<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Outperformance Fee and Distributions of Cash</I>&#150;payable to our manager during the offering period, operating period and liquidation period, with a percentage subordinate to
investor return.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Prior to the time that investor return is achieved, distributions will be made 99.0% to our members and 1.0% to our manager.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">After the time that investor return is achieved, distributions will be made to 81.0%
our members and 19.0% to our manager. We refer to the increased percentage of distributions payable to our manager as the &#147;outperformance fee.&#148;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The outperformance fee will depend upon the extent to which equipment rental payments and sales proceeds exceed our expenses, including any indebtedness obligations, as well as
whether investor return has been achieved. Therefore, the outperformance fee is not determinable at this time.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Reimbursement of Operating Expenses and Acquisition Expenses </I>&#150;payable to our manager, its affiliates and third parties during the offering period, operating period and
liquidation period.</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay third parties directly, and reimburse our manager and its affiliates for amounts paid on our behalf, for operating expenses
and acquisition expenses.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Operating expenses include the actual cost of
goods and materials obtained from unaffiliated third parties, and also include reimbursement to our manager and its affiliates for administrative services reasonably necessary or advisable in its discretion to our prudent operation, for example,
legal, accounting and audit fees, printing costs, filing and qualification fees, certain costs of our manager in our ongoing operations and similar fees and expenses. The reimbursement of operating expenses may not exceed the lesser of:</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
actual cost of the services; or</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the amount we would be required to pay to independent parties for comparable
services</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition expenses are those expenses related to the selection,
acquisition and documentation of investments in equipment and include legal fees and expenses; travel and communications expenses; costs of credit reports, appraisals, valuations, inspections, searches and reference materials used to evaluate
transactions; non-refundable option payments on equipment and other personal property; administrative and clerical expenses; accounting, tax and auditing fees and expenses; and miscellaneous other expenses.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The amount of expenses reimbursed will depend upon the scope of services the manager provides to us. Reimbursement amounts for the entirety of our operations are not determinable at
this
time.</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(6)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"></FONT></TD></TR>
</TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">38 </FONT></P>



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<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="21%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="38%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="37%"></TD></TR>

<TR>
<TD VALIGN="top" NOWRAP ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Entity Receiving</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation and Period</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation is Payable</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Method of Compensation</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Estimated Dollar Amount of</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Compensation<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></B></FONT></P></TD></TR>


<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">No reimbursement is permitted for services for which the manager or its affiliates is entitled to compensation by way of a separate fee, including the O&amp;O expense allowance.
We may not reimburse the manager or its affiliates for salaries, fringe benefits, travel expenses or other administrative items incurred by or allocated to any controlling person of the manager or expenses for rent, depreciation and utilities or for
capital equipment.</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(5)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR></TABLE> <P STYLE="line-height:8px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unless otherwise stated, excludes shares sold under our DRP. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total acquisition fees paid from all sources is limited to the difference between the maximum front-end fees (explained below) and all other front-end fees (the selling
commissions, dealer manager fees, due diligence expense reimbursements and O&amp;O expense allowance). Pursuant to our operating agreement, the maximum front-end fees that we may pay may not cause our direct or indirect investment in equipment to be
less than the greater of: (i)&nbsp;80.0% of the gross offering proceeds, reduced by .0625% for each 1.0% of indebtedness encumbering our investment, or (ii)&nbsp;75.0% of the gross offering proceeds. For example, if we incur 65.0% indebtedness on
our portfolio, we must directly or indirectly invest at least 75.9375% of our gross offering proceeds in equipment. Assuming that we sell all 20,000,000 shares in this offering and assuming our anticipated portfolio leverage of 40%, we estimate that
our total front-end fees will constitute approximately 14.35% of the gross offering proceeds, including estimated total acquisition fees attributable to offering proceeds. See &#147;Estimated Use of Proceeds.&#148; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">See &#147;Glossary&#148; for the definition of &#147;full payout leases&#148; and &#147;non-full payout leases.&#148; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(4)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the manager provides both equipment management and additional services relating to the continued and active operation of our equipment, such as ongoing marketing and
re-leasing of equipment, hiring or arranging for the hiring of crews or operating personnel for our equipment and similar services, the manager may charge us a management fee not to exceed 7.0% of the gross rental payments from equipment operated by
us. If the manager receives an asset management fee of 7.0% pursuant to this provision, the manager will not be entitled to the 2.0% re-leasing fee. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(5)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Controlling persons include the chairmen, directors, presidents, or other executive or senior officers of our manager or its affiliates, any holder of a 5% or larger
equity interest in our manager or its affiliates, or any person having the power to direct or cause the direction of our manager or its affiliates, whether through the ownership of voting securities, by contract or otherwise.
</FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(6)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following table sets forth our estimate of the total amount of expenses that we will reimburse our manager for administrative services provided during our first
full year of operations and assumes that we sell the maximum number of shares. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="92%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="88%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Administrative Expense Reimbursements</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">General Administrative</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The administrative expenses include
costs incurred by our manager and its affiliates that are necessary to our operations. General administrative expenses include audit, legal and tax expenses incurred by our manager and its affiliates. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">39 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_17"></A>INVESTMENT OBJECTIVES AND POLICIES </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_18"></A>Principal Investment Objectives </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our principal investment objectives are to: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Preserve, protect and return your invested capital</I>. We intend to build a portfolio of equipment, equipment leases and other equipment related
investments with the objective of preserving, protecting and returning your invested capital. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Generate regular monthly cash distributions</I>. We will develop a portfolio of varied equipment types, transaction types, clients and transaction
durations with the objective of receiving regular cash from our investments. We intend to generate cash through rental payments from our clients, from the sale of equipment, from the sale of leases and from other investments. In turn, we intend to
make regular monthly cash distributions beginning the month after the initial closing date of this offering and up to the end of our operating period. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Reduce our overall risk through diversification of our portfolio. </I>We intend to diversify our portfolio by acquiring, directly or indirectly,
different types of assets, by entering into or acquiring leases of different durations and by acquiring equipment and investing in other equipment related transactions in different geographies and industries. Diversification of our portfolio will
reduce our risk of changes in any particular market sector or of any particular client&#146;s willingness or ability to make payments under a lease. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Generate investment returns that are not correlated to returns from listed stock and bond markets</I>. We intend to generate investment returns for
our investors that will not be correlated to listed stock and bond markets. Our shares will not be traded on any listed exchange and the value of our shares will not be subject to fluctuations on those exchanges. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Generate a favorable total return on your investment</I>. Our portfolio will be structured with the objective of providing our investors with a
favorable total return on their investment. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">To achieve our investment objectives, we will acquire, directly
or indirectly, equipment that is leased to third parties. We may also invest in other types of transactions which will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. Those transactions may
include equipment trading transactions, residual value guarantees, forward purchase agreements, investments in companies which lease equipment, total lease return swaps, participation agreements, equipment purchase options and other transactions
involving equipment. We will not enter into stock, bond or other exchange traded derivative contracts. See &#147;Investment Objectives and Policies&#150;Types of Transactions and Transaction Strategies.&#148; Equipment leases and other equipment
related investments are likely to be located in, or subject to the laws of, the U.S., but may also be located elsewhere. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">40 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_19"></A>Equipment Considerations </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Equipment Categories </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We may acquire, directly or indirectly, a variety of different types of equipment, including transportation, construction, mining, manufacturing, utilities and technological equipment. Examples of the
types of equipment that we may acquire include the following: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="21%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD WIDTH="76%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:71pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Equipment&nbsp;Category</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Example Equipment</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Transportation Equipment</B></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Aeronautical</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Aircraft engines (jet or turbo-prop), aircraft and engine parts, machinery and tooling, commercial aircraft, private aircraft, police or military aircraft, aircraft simulators,
aircraft manufacturing equipment, ground handling equipment.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Maritime</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Containerships, bulkers, barges, tankers, tugs, anchor handling, crew transport, rigs, passenger transport, cruise ships, sub-sea ships, off-shore supply vessels, gas carriers,
floating production storage and offloading vessels, maritime engines, shipping containers, spare parts, loading and handling equipment.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Rail</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Locomotives, passenger cars, freight cars, trams, signaling equipment, spare parts, rail construction, maintenance equipment.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Road Transportation</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Buses, coaches, trucks, road containers, armored cars, taxis, passenger vehicles, trailers, forklifts, tractors, emergency service vehicles.</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Construction,&nbsp;Mining&nbsp;and&nbsp;Manufacturing</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Construction</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cranes, bulldozers, earthmoving equipment, backhoes, compressors, excavators, lifting equipment, front-end loaders, cement spreaders, transportable buildings, rollers and
compactors, concrete equipment, rock breakers.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Mining</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dozers, graders, loaders, conveyers/elevators, boring and drilling equipment, crushing and screening equipment, draglines, haul trucks, pumps, sheds, transportable buildings,
trenchers.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Manufacturing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Machine tools, computer and mechanically controlled lathes, materials handling equipment, drill presses, milling machines, grinders, metal fabrication equipment, general plant,
robotics, molding equipment, process controllers, materials handling equipment, tanks and vessels, inspection tools and instruments, heating and cooling equipment and cutting and forming tools.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Utilities</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Utilities Equipment</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Smart and conventional gas, electricity and water meters, power generators, turbines, wind farms, solar panels, gas and water leak detection equipment, boilers, heat exchangers
and control systems.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Technological</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Semiconductor</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Wafer fabrication equipment including deposition, diffusion, etch, implant, lithography and metrology tools. Automated test equipment including testers, handlers and probers.
Printed circuit board assembly equipment including placement systems, glue dispensers, screen printers, optical inspection, x-ray inspection, cleaners and ovens. Solar cell and solar panel manufacturing equipment including wet chemistry,
texture/clean, deposition, furnaces, screen printers, handling, conveyors, measurement and inspection tools. Flat panel display manufacturing equipment.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Information Technology</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Desktop computers, laptops, notebooks, servers, data centers, routers, firewalls, printers, fax machines, scanners, multi-function devices and photocopying
equipment.</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">41 </FONT></P>



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<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="20%"></TD>
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<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:71pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Equipment Category</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Example Equipment</B></FONT></P></TD></TR>


<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Telecommunications</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commercial mobile telephony equipment, antennae and base stations, emergency services telecommunications, radio masts and towers, telephone systems, hubs, modems, gateways,
switches, fixed line systems, communications servers.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Scientific and Medical</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Medical and dental diagnostic and testing equipment including MRI, X-ray, ultrasound, cardiology, radiology, patient monitoring equipment, analyzers, laboratory test equipment
and other equipment used in hospitals, clinics and medical laboratories.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other Technological</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Automatic teller machines, point of sale devices, customer self-serve kiosks, cinema equipment, broadcasting equipment, outside broadcast vans, television set-top-boxes,
fiber-optic cable, navigation systems, graphic processing equipment, air conditioning, CAD equipment and gaming machines.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Other</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Other Equipment</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other equipment that our manager determines may meet our investment objectives, including but not limited to furniture and fixtures, advertising billboards and intangible costs
associated with equipment, such as installation, warranty, transportation and software costs.</FONT></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Equipment Investment
Considerations </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager may consider a range of factors when reviewing potential investments in equipment,
including: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Remaining economic useful life</I>. The remaining economic useful life of an item of equipment will be taken into account in determining the
appropriate residual value investment in, and lease duration for, that equipment. For example, a new laptop computer may have three years of economic useful life remaining whereas a 10 year old rail box-car may have more than 30 years of economic
useful life remaining. We will make investments where we believe that the individual item of equipment has sufficient economic useful life remaining for us to make an appropriate return on our residual value investment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Anticipated residual value</I>. In determining the size of a residual value investment, it will be necessary to form an opinion as to:
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the likely resale value of the equipment at the time in the future when the equipment is likely to be sold; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">any other revenue sources the equipment may generate at the end of the initial lease term, such as through re-leasing or an extension of the lease
term. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Whether the equipment is new or used and the condition of the equipment</I>. New equipment is more likely to be covered by a manufacturer warranty
and may be more suited to the needs of our clients. Used equipment may be advantageous to purchase from a pricing or availability perspective. When considering investments in used equipment, we will take into account the condition of the equipment
plus any available inspection reports and maintenance and repair schedules. If we are considering an investment in used equipment which is accompanied by an existing lease, we may also consider the lessee&#146;s history of compliance with its
obligations under that lease. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Equipment registration and regulatory considerations. </I>Certain types of equipment, including aircraft and marine vessels, may be subject to
equipment specific registration requirements, export restrictions and other regulations. We will take these registration and regulatory requirements into account when considering investments in those items of equipment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Portfolio diversification</I>. We will look more favorably upon equipment and equipment related investments that add diversification to our existing
portfolio. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Client considerations</I>. We may consider how the equipment will hold its value for collateral purposes in conjunction with any consideration of
the payment risks associated with the proposed client. We may also review any available financial information about the client. See &#147;&#150;Types of Clients and Client Considerations.&#148; </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">42 </FONT></P>



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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>How essential the equipment is to the operations of the client</I>. We will look more favorably upon investments in equipment or equipment related
transactions that are essential to the operations of the underlying client, as there is a greater likelihood that a client will continue to meet lease obligations for equipment that is vital to its business operations. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Cash flow profile of the equipment</I>. We will take into account the timing of the receipt of cash flows generated by equipment or equipment
related transactions when determining a rental payment profile for that equipment or transaction. This in turn will influence the ongoing regular cash distributions we intend to pay to you and our other investors. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>The depth of the equipment market and exit mechanisms</I>. We will look more favorably upon potential direct or indirect investments in equipment
for which a deep and well-established secondary market exists, or where some other investment exit mechanism is likely to exist. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>The applicability and potential impact of environmental laws</I>. Some types of equipment, such as transportation assets which are designed to carry
hazardous materials, have greater potential to be involved in the discharging of pollutants into the environment. This may expose us as the owner of the equipment to penalties under law and environmental tort liability, which could impact our
returns in a materially negative way. We will look more favorably upon investments where these environmental risks are either comparatively smaller, primarily borne by persons other than us or where the environmental risks are insurable.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_20"></A>Types of Transactions and Transaction Strategies </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Lease Transactions </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>General Definition </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">At its most basic, a lease is an arrangement by which one person, <I>the lessor</I>, provides possession and use of an asset for a fixed term to another person, <I>the lessee</I>, in return for
compensation known as <I>rent</I>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">There are different methods for defining a &#147;lease&#148; depending upon whether it is
being defined for accounting purposes, tax purposes, legal purposes, Uniform Commercial Code purposes, bankruptcy purposes, regulatory purposes or commercial purposes. A common theme among these definitions, however, is that the lessor retains at
least some of the risks and rewards of ownership of the leased assets. The degree of risk retained by the lessor depends upon the type of lease agreement and the provisions of individual lease contracts. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>General Terminology </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Leases may sometimes also be referred to as <I>rental agreements, hire agreements, hire purchase agreements, bailment for hires</I>, <I>usage </I>and <I>pay per use agreements</I>. Leases are between a
lessor, who owns or has some other right to an asset, and a lessee, who is granted the possession and right to use the asset by the lessor. The lessor may also be referred to as the <I>owner</I>. The lessee may be referred to as the <I>hirer, renter
</I>or <I>user</I>. In this prospectus, we refer to our lessees as our <I>clients.</I> Rentals may also be known as <I>lease payments, hire payments</I> or<I> usage payments</I>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The terms &#147;present value&#148; or &#147;net present value&#148; are often used in connection with leases. Present value is the
current value of one or more payments to be made in the future. It is based on the concept that an amount today is worth more than the same amount in the future; for example, $100 was more valuable in 1990 than $100 is today. There are various
methodologies and assumptions used when calculating the present value of the future cash flows. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">There are two common forms of
leases: <I>non-full payout leases </I>and <I>full payout leases</I>. Other types of lease arrangements include <I>sale and leasebacks, pay per use </I>and <I>full service leases</I>. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">43 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Non-Full Payout Leases </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A non-full payout lease, also known as an operating lease or a rental agreement, is one where, in present value terms, the sum of the
rentals paid by the lessee over the lease term is less than the original purchase price paid by the lessor for the leased equipment. The difference between the original purchase price of the equipment and the sum of the rentals, in present value
terms, is known as the lessor&#146;s &#147;residual value&#148; investment in the equipment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The lessor under non-full payout
leases cannot typically require the lessee to purchase the leased equipment at the end of the lease. Normally: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the lessee has no right or option to purchase the equipment at the end of the lease; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the lessee does have a right or option to purchase the leased equipment at the end of the lease, but only where the purchase price payable by the
lessee is not fixed up-front. Instead, the purchase price is the fair market value of the equipment at the end of the lease term. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">It is not uncommon at the end of a non-full payout lease for the leased equipment to be returned to the lessor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Lessors enter into non-full payout leases with the expectation that they will make a satisfactory return on their residual value investment. Returns on residual value investments can be achieved by:
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">re-leasing the equipment at the end of the initial lease term to the same or a different lessee; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">selling the equipment at the end of the lease term to the lessee or another party. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Full Payout Leases </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A full payout lease, also known as a finance lease, is one where the rentals paid by the lessee, plus any other fixed payments the lessee is obliged to make under the lease, compensate the lessor in full
for the purchase price paid by the lessor for the equipment at the outset of the lease, plus a satisfactory return. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Usually
under a full payout lease, the lessee becomes the owner of the leased equipment at the end of the lease and the equipment is not returned to the lessor. Lessors enter into full payout leases primarily to earn interest income which forms part of the
rental payments made by the lessee. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Sale and Leaseback </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A sale and leaseback is one where the lessee of the equipment is the same party that initially sells the equipment to the lessor. The
lease commences at the same time that the equipment is sold to the lessee. The &#147;leaseback&#148; may take the form of either a non-full payout lease or a full payout lease. Businesses may enter into sale and leaseback transactions to achieve
desired balance sheet outcomes, for liquidity purposes, for asset management purposes or for a variety of other reasons. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Pay per Use Agreements </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Pay per use agreements are typically a type of non-full payout lease. Under a pay per use agreement, the regular rental payments due from the lessee are not fixed or determined solely by reference to an
underlying interest rate. Instead, the amount the lessee pays for the use of the equipment is based upon their actual usage of the equipment. Under these agreements, a lessee will typically pay more for the equipment the more often it uses\ the
equipment. Pay per use arrangements may differ depending upon the type of equipment being used. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Examples of pay per use
agreements may include a payment per copy for photocopiers, payments based upon running time for aircraft engines or a payment per item produced for manufacturing equipment. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">44 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Full Service Leases </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A full service lease is typically a type of non-full payout lease. Under a full service lease, the lessor may assume certain obligations
or provide certain services associated with the underlying equipment. This may include the obligation to maintain, insure or operate the equipment. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Non-Lease Transactions </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Non-lease, equipment related transactions
are those which will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. We will typically enter into non-lease transactions as a mechanism for making direct or indirect investments in equipment
rather than as a mechanism for transferring risk to other parties. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not enter into stock, bond or other exchange
traded derivative contracts. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The risks we accept in the value of equipment under non-lease transactions will be comparable to
the risks we accept in the variable residual value of equipment under ordinary non-full payout leases. As with lease transactions, we will rely upon the equipment leasing and equipment valuation expertise of our manager, our manager&#146;s
affiliates and other third party experts when assessing non-lease equipment related transactions. See &#147;The Macquarie Group&#148; and &#147;Management.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Examples of non-lease, equipment related transactions are described below. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Trading Transactions </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Trading transactions involve buying an item of equipment with the expectation of re-selling that equipment for a profit. There is no lease associated with a trading transaction. A committed purchaser of
the equipment may or may not have been identified at the time the equipment is initially purchased. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Residual Value
Guarantees and Forward Purchase Agreements </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Forward purchase agreements are agreements whereby one party, referred to as
the <I>purchaser</I>, is committed to purchasing an item of equipment in the future for a pre-determined price. The seller of the equipment is typically another lessor and the equipment is usually subject to a lease. The date for the future purchase
of the equipment is generally the date the underlying lease ends. A residual value guarantee is a guarantee to make payment of any shortfall between a pre-agreed amount, being the residual value, and the actual sales proceeds from the sale of
equipment at the end of the lease. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Total Lease Return Swaps, Participation Agreements and Other Transactions
</I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A total lease return swap is an agreement between two parties in which one party makes set payments, typically an amount
equal to the purchase price of an item of equipment and other costs associated with owning it, while the other party makes payments based on the return of the underlying equipment, which includes both the rental income it generates and any capital
gains. Total lease return swaps allow the party receiving the total return to gain exposure and benefit from the underlying equipment without actually having to own it. In effect, a total lease return swap is a transaction which mirrors the
cashflows from an underlying lease agreement without requiring direct ownership of the underlying equipment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A participation
agreement may take the form of a total lease return swap, with the exception that it relates only to part of the underlying equipment and only part of the cashflows generated by it. Participation agreements may be used for example as we gradually
pay down investments which have been warehoused on our behalf, or where we do not wish to invest an amount equal to the full purchase price of the equipment. See &#147;&#150;Warehousing of Transactions by our Manager or our Manager&#146;s
Affiliates.&#148; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">45 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As an investor will not typically have a direct ownership interest in equipment underlying
total lease return swaps, participation agreements and other similar transactions, tax depreciation deductions are generally not available to members from this type of investment. These transactions can effectively enable participation in the cash
flows from the underlying equipment lease and may also provide for partial participation in a transaction, or for the gradual increase in the size of an investment in equipment as more funds become available. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Equipment Purchase Options </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">An equipment purchase option is a transaction where the option holder has the right, but not the obligation, to purchase equipment in the future, usually for a fixed price. The option holder will normally
exercise the option if it believes that the market value of the equipment is sufficiently greater than the option price so as to provide the option-holder with a satisfactory return. We may either purchase options for equipment held by others, or
grant options for equipment that we hold. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Joint Ventures and Special Purpose Vehicles </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A joint venture is a contractual arrangement between two or more parties, formed for the purpose of executing a particular business
undertaking. A joint venture may be formed to make a direct or indirect investment in equipment. Joint ventures may be formed: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">where the joint venture partners bring different expertise to the transaction; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to diversify risk; or </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">where the investment size is too large for a single party to make. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In equipment financing terms, special purpose vehicles are corporations, or some other form of business entity, formed to hold
investments in specific equipment and achieve particular legal or economic outcomes. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Company Ownership </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Certain companies, including leasing or hire companies, hold a significant portion of their assets directly in equipment. Ownership
interests in those companies can provide indirect exposure to certain categories of equipment or portfolios of equipment. Tax depreciation deductions are generally not available for this type of investment. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Transaction Strategies </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We intend to hold the majority of our portfolio through non-full payout leases; however, we may invest in any type of direct or indirect lease or non-lease transaction. We believe investments in leases
and equipment related non-lease transactions, such as trading transactions, residual value guarantees, forward purchase agreements, total lease return swaps and participation agreements, are those most likely to achieve our investment objectives. We
will not enter into stock, bond or other exchange traded derivative contracts. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">See &#147;Investment Objectives and
Policies&#150;Types of Transactions and Transaction Strategies.&#148; We will seek to sufficiently diversify the duration of our leases to achieve our investment objectives. We may also diversify the types of leases and other transactions we enter
into in the expectation of achieving our investment objectives. Once fully invested, we anticipate that at any one time we will only have a minority of our investments held in non-lease, or trading, transactions. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Given the global reach of the leasing activities conducted by the Macquarie Group, we anticipate that a significant proportion of
transactions we enter into may: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">involve foreign clients; </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">46 </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">involve equipment located or operated in foreign locations; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">be subject to foreign laws. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We may enter into transactions involving foreign jurisdictions which our manager believes may assist us in achieving our investment objectives. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">No member of the Macquarie Group is obligated to introduce transactions to us and there is no assurance that the Macquarie Group will
introduce transactions to us. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_21"></A>Lease Provisions </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Each lease will contain different terms and provisions and will vary depending upon a number of factors including: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the type of equipment and its intended use; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the country in which the client or equipment is to be located; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">whether the lease is a full payout or non-full payout lease; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the type of client and the likelihood or consequences of payment default by the client; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">regulatory considerations; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">tax, legal or accounting treatments for the lease; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the size of our investment in the equipment; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">industry norms or standards. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We anticipate that the majority of our leases will contain provisions requiring our client to: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">pay fixed-rate rent without deduction, set-off or counterclaim; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">maintain insurance or self-insurance over the equipment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">pay sales, use or similar taxes relating to the lease or other use of the equipment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">maintain the equipment in good working order and condition during the term of the lease; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">indemnify us against any liability resulting from any act or omission of the client or its agents relating to the equipment; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">agree not to assign or sub-lease the equipment without our prior written consent. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our leases will usually have terms ranging from two to seven years or will be held with a view to sale by us within two to seven years.
Most leases will not be cancellable during their initial terms, although some leases may provide our client with a termination right in exchange for an agreed one time payment to us. We may agree to allow cancellation of a lease that does not have a
termination right if it appears to be in our best interest if a client pays compensation to us or if a more attractive alternative exists that will enable us to achieve our investment objectives. At the end of each lease term, our client may have or
be given the right to purchase the equipment, return the equipment to us or continue leasing the equipment for an additional period. We may also sell leases, including the underlying equipment, prior to the end of the lease term. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_22"></A>Types of Clients and Client Considerations </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">It is anticipated that the majority of our clients will be corporate lessees. However, we will not be restricted in the types of clients with which we may transact. Each transaction in which we engage
will be subject to consideration of the financial performance of the ultimate client. We will seek to enter into transactions: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">where acceptable collateral is available, including in the form of the underlying equipment; </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">47 </FONT></P>



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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">where the client risk is acceptable in the context of our overall portfolio; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">where our manager otherwise deems our exposure to the client to be acceptable on a risk versus reward basis. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In assessing potential clients, we may consider the following: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The financial performance of the client as demonstrated by financial statements, payment histories, forecasts, business plans or other documents.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any collateral that may be provided in support of the transaction, including parent company guarantees, bank guarantees or other security.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The size of the transaction and its importance to our overall portfolio. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The anticipated resale value of the leased equipment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The anticipated returns to be generated from the investment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The duration of the transaction. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The country where the client or equipment will be located, including any associated political risks. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our existing exposure, if any, to the client. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_23"></A>Borrowing Strategies and Limitations </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may use
debt, also known as leverage, when we acquire equipment. The use of those borrowings will enable us to increase the size and diversification of our portfolio. The application of leverage will reflect the appetite of the debt providers for credit
exposure to our clients and the pricing of the debt in the market. We are prohibited from obtaining permanent debt facilities from our manager or its affiliates. However, our manager or our manager&#146;s affiliates may provide us with short-term
debt facilities to facilitate our direct investment in transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We anticipate that the majority of debt that we incur
will be <I>limited-recourse </I>debt. Under the typical terms of limited-recourse debt, in the event of payment default by the underlying lessee, our obligation to repay the debt will generally be limited to a set of circumstances involving our
breach of contract, our negligence, our willful misconduct and our false or misleading statements. That debt will be combined with your capital contributions to purchase specific items of equipment. In the event of a payment default by our client,
the third party debt provider will have a right of action against our client to recover outstanding payments and generally will have priority over us to any proceeds from the sale of the equipment until it has recovered the outstanding indebtedness,
as well as collection fees and costs. In that event, we may lose some or all of our investment in the equipment. It is also possible that we will enter into other forms of borrowings, such as borrowings secured across all or part of our portfolio or
borrowings which may have recourse to us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Until we are fully invested, we anticipate that the level of debt across our
portfolio will be approximately 40.0% of the total purchase price of all equipment in our portfolio. Assuming that we receive $200,000,000 in capital contributions, this level of leverage will result an initial portfolio value of approximately
$284,650,000. We expect that leverage will be applied on an asset by asset basis across our portfolio. Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our
portfolio. Should disruptions in financial and debt markets occur, this may adversely affect our ability to source debt on attractive terms. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_24"></A>Warehousing of Transactions by our Manager or our Manager&#146;s Affiliates </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager or our manager&#146;s affiliates may &#147;warehouse&#148; transactions for us. &#147;Warehousing&#148; refers to transactions
that our manager or affiliates of our manager may enter into specifically for sale to us in the future. Warehousing transactions will be approved by our manager prior to the investment being made by our manager&#146;s affiliates on our behalf. We
would commit to our manager or manager&#146;s affiliate to purchase that transaction, and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">48 </FONT></P>



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our manager or manager&#146;s affiliate would commit to sell that transaction to us, once we have sufficient available capital. A mechanism will be pre-agreed between us and our manager or our
manager&#146;s affiliate for determining the sale price of the investment to us. The mechanisms may include external enquiries by our manager or the exercise of business judgment by our manager on our behalf. Neither our manager nor its affiliates
guarantee the availability of any warehousing facility and any warehousing facility would be subject to the Macquarie Group&#146;s usual internal approval processes. Any equipment purchased by our manager or our manager&#146;s affiliates for sale to
us in the future will be held by our manager or our manager&#146;s affiliates on a temporary or interim basis only, generally not in excess of six months. We will only commit to purchase equipment from our manager or our manager&#146;s affiliates if
our manager believes it to be in our best interests. Warehousing facilities may also be provided to us by non-affiliates of our manager. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Warehousing of transactions by our manager or its affiliates may provide us with several key benefits, including: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the ability to secure equipment prior to having capital available to make the investment; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">quickly investing our capital into income producing assets. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Where appropriate and desirable, and where acceptable to our manager and our manager&#146;s affiliates, we will seek to have equipment warehoused on our behalf by members of the Macquarie Group. As of the
date of this prospectus, no equipment has been identified as being warehoused by our manager or our manager&#146;s affiliates on our behalf. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_25"></A>Co-Investments </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">It is not uncommon in the equipment leasing industry, particularly for larger transactions, for multiple participants to invest in the same transaction. Co-investments provide benefits which may include:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">access to equipment and equipment related transactions that would be too large for us to enter into alone; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the ability to better diversify our portfolio and limit our exposure to specific clients or equipment; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the ability to co-invest alongside institutional investors. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Where our manager believes it is likely to assist us in achieving our investment objectives, we may co-invest in transactions, either on a majority or minority basis, alongside: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">third-parties; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager or our manager&#146;s affiliates, either directly or in the form of participation agreements or other arrangements; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">other funds managed by our manager or our manager&#146;s affiliates, including other equipment leasing programs. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not, however, invest in the shares or partnership interests of other equipment leasing programs. The terms of our investments
with third-parties, our manager or our manager&#146;s affiliates may differ from the investment terms of those other co-investors, provided our manager believes our investment is consistent with our investment objectives. See &#147;Summary of Our
Operating Agreement&#151;Management.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_26"></A>Transaction Review and Approvals </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Investment Committee </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager will establish an investment committee and set standards and procedures for the review and approval of potential transactions by the investment committee. These standards and procedures may be
revised </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">49 </FONT></P>



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from time to time. The investment committee will be comprised of at least two people, each of whom are anticipated to be employees of our manager and may be officers or directors of our manager.
The investment committee will make decisions on whether we should invest in a particular transaction or not by majority vote; in the event of a stalemate, the investment proposal will be referred to the board of directors of our manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any transaction which involves us entering into warehousing arrangements, participation agreements, joint ventures or debt facilities
with our manager&#146;s affiliates must be referred to the board of directors of our manager, whereupon the transaction may only be entered into by us where a majority of the directors of our manager&#146;s board of directors, including a majority
of our manager&#146;s independent directors, have approved the transaction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Initially, the investment committee will be
comprised of Messrs. Fahy and Edghill. See &#147;Management.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Investment Approval </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The investment committee will evaluate all potential equipment acquisitions on the basis of: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the extent to which the transaction appears to satisfy our investment objectives, both singularly and in the context of our existing portfolio;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the proposed client; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">any available collateral and the value of the underlying equipment; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the type of equipment to be acquired and its condition, location and anticipated overall investment return. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_27"></A>Portfolio Review </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager intends to formally review our portfolio at least annually and more frequently if circumstances require, to determine whether individual equipment, leases or other equipment related
transactions should remain in our portfolio or if they should be sold. These reviews will take into account: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">whether the existing portfolio is meeting our investment objectives; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">whether alternative transactions and equipment are readily available which, when combined with the disposal of equipment from our current portfolio and
taking into account any capital re-deployment risks, will better meet our investment objectives. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Where our
investment objectives are being met, our manager will give preference to maintaining the existing portfolio unless there are alternative investments readily available which are more suitable to better meet our investment objectives. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">50 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_28"></A>ALTERNATIVE INVESTMENT STRATEGIES </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Financial planners generally recommend that investors hold a diversified investment portfolio including stocks, bonds and alternative
investments. The objective of this strategy is to reduce the overall portfolio risk and volatility of an investor&#146;s wealth portfolio while achieving acceptable rates of return. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">An investment in an equipment leasing program may be regarded as an alternative investment. The appropriate proportion of an
investor&#146;s wealth portfolio that should be held in alternative investments will vary from investor to investor. You should consult your independent financial advisor regarding asset allocation strategies. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As a wealth management strategy, equipment leasing programs may be appropriate for certain investors for reasons which include:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Portfolio diversification</I>. The investment may provide diversification between alternative and other forms of investments. It may also provide
diversification between your alternative investments. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Non-correlation</I>. Equipment leasing funds that are not traded on stock exchanges may exhibit little or no correlation to listed stock or bond
markets. Furthermore, factors that influence share prices may not be factors which impact the rentals or sales proceeds that are derived from leasing equipment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Regular cash distributions</I>. Equipment leasing funds may generate regular cash distributions. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Potential for capital growth</I>. Equipment leasing funds that invest in equipment under non-full payout leases may offer the potential for the
growth of invested capital as the result of re-selling equipment at the end of the lease term for more than the remaining investment in that equipment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Security in tangible and business essential assets</I>. Equipment leasing funds may provide ownership of, and security in, real items of business
equipment which are essential to the conduct of business. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Partial inflation hedge</I>. The residual value of some equipment may rise in conjunction with higher inflation. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Tax advantages</I>. Equipment leasing programs may provide tax benefits for some investors. See &#147;Federal Income Tax Consequences.&#148;
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We expect to exhibit some or all of the characteristics described above. Before considering any investment
in our shares, however, you should first consult with your independent financial consultant and read and understand this prospectus, including the section &#147;Risk Factors.&#148; You must also meet the general and state specific suitability
standards as set out in this prospectus. See &#147;Who May Invest.&#148; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">51 </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_29"></A>THE EQUIPMENT LEASING INDUSTRY </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Both in the U.S. and abroad, the equipment leasing industry is large, segmented and highly competitive. We anticipate doing business in
the U.S. as well as in foreign jurisdictions. We will operate across a number of segments within the equipment leasing industry. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Industry
and Market Data </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The industry and market data contained in this prospectus are based on independent industry publications,
reports by governmental agencies or market research firms or other published independent sources and, in each case, are believed by us to be reasonable estimates. However, industry and market data is subject to change and cannot always be verified
with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. We have not independently verified
market and industry data from third-party sources. In addition, consumption patterns and customer preferences can and do change. As a result you should be aware that market share, ranking and other similar data set forth herein, and estimates and
beliefs based on that data, may not be verifiable or reliable. The industry and market data sources are publicly available and were not prepared for our benefit or paid for by us, nor were they paid by or prepared for the benefit of our manager or
our manager&#146;s affiliates. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Industry Participants and Segments </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The equipment leasing industry and its participants may be categorized in numerous ways. These categories often overlap. Categorizations
of the equipment leasing industry and its participants include the following: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Lessor Affiliations. </I>Equipment leasing companies may be: </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Affiliates of U.S. banks. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Captive lessors, meaning they only provide lease financing for one brand of equipment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Independents, meaning they are not affiliates of banks and are not captives. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Affiliates of non-U.S. banks. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Equipment Segments. </I>Certain leasing companies may provide lease financing for specific items of equipment, whereas other lease companies may
focus on a broad range of equipment. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Lease Types. </I>Leasing companies may provide full-payout leases only, whereby they are not accepting direct residual value risk in the underlying
equipment. Other leasing companies may accept residual value risk in equipment, most typically by offering non-full payout leases. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Big Ticket versus Small Ticket</I>. Big ticket leasing companies tend to provide lease financing for high value items of equipment, such as maritime
vessels, aircraft or railcars. Small ticket leasing companies focus on providing lease financing for small value items of equipment. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Customer Type</I>. Leasing companies may provide services to a broad client base, although certain leasing companies may focus specifically on the
provision of services either to individuals, small businesses, corporations or public clients. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Geographical Footprint</I>. Leasing companies range from those with a global mandate to purely national or regional leasing companies.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We anticipate that we will be a global, big ticket leasing company with a focus on providing non-full
payout leases to mainly corporate clients across numerous equipment classes. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">52 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Equipment Leasing Figures and Recent Industry Trends </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following figures provide an overview of features of the equipment leasing industry: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Annual world leasing volume is in excess of $557 billion.</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">North America comprises approximately 34.2% of annual world leasing volume, Europe 37.9% and Asia 20.2%. </FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"></FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The top 15 countries, measured by way of annual leasing volume (in parentheses), are as follows: U.S. ($174 billion), Germany ($55 billion), Japan ($53
billion), China ($41 billion), France ($32 billion), Italy ($27 billion), Brazil ($23 billion), United Kingdom ($15 billion), Canada ($13 billion), Russia ($9 billion), Sweden ($8 billion), Spain ($8 billion), the Netherlands ($8 billion), Poland
($7 billion) and South Korea ($6 billion).</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Since 1988, the global aggregate annual leasing volume has grown from $194 billion to over $557 billion.</FONT><FONT
STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Recent trends in the domestic and global equipment leasing industry indicate that leasing volume is impacted by general economic
conditions. In 2007, global aggregate annual leasing volume was more than $780 billion. In December 2007, the U.S. economy entered into a recession caused in part by a deterioration of the U.S. and global credit markets. The recession was compounded
when the general unavailability of credit began to be reflected in a decrease in the global aggregate leasing volume during this period. As businesses began to react to the slowing economy, investments in new equipment also decreased. Global annual
leasing volume decreased from $780 billion in 2007 to $557 billion in 2009. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The global economy began to slowly improve during
2010 and the first half of 2011, and most economists are forecasting continued growth through the remainder of 2011 and 2012. We believe that the global equipment leasing industry will also improve as the global economy improves. Despite the
improving global economy, the credit market continues to be unfavorable with many financial institutions either ceasing or significantly reducing their financing operations. We believe that the improving economy and continued difficult global credit
markets provides us an opportunity to make favorable investments in equipment transactions which will allow us to provide attractive returns to our investors. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Competitive Conditions </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our returns will be influenced by competitive
conditions existing within the equipment leasing industry. Key competitive conditions which will influence our operations will include the following: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The cost of our equipment leasing services, including the rental rates we are able to provide, versus the cost of leasing services offered by our
competitors. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The attractiveness of lease finance to clients versus other forms of equipment finance, including debt financing and the outright purchase of
equipment. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">General economic conditions. Generally, while weaker economic conditions may make lease financing a more attractive financing solution for clients, it
may also result in reduced overall demand for business equipment and higher lease defaults. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our ability to provide associated lease services versus additional services offered by our competitors. Associated lease services may include asset
management, delivery or maintenance services. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The irrational behavior of other competitors. For example, other competitors may enter into unprofitable transactions for the purpose of
&#147;buying&#148; market share. This in turn may lower lease rates across industry segments. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The availability and pricing of debt. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We believe that our association with our manager and its affiliates will enable us to be a competitive participant in the equipment leasing market segments in which we will transact. See &#147;The
Macquarie Group&#148; and &#147;Management.&#148; </FONT></P> <P STYLE="line-height:8px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)</SUP></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Source: World Leasing Yearbook 2011, Euromoney Yearbooks, as of 2009. </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">53 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_30"></A>MANAGER&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We are a newly formed Delaware limited liability company. As of February 28, 2011, we had $2,000 in cash and cash
equivalents from our manager&#146;s initial capital contribution. Until we receive and accept subscriptions for a minimum offering amount of $1,200,000, excluding the initial $2,000 capital contribution from our manager, we will not commence
operations. After receipt and acceptance of subscriptions for our minimum offering amount of $1,200,000, the subscription proceeds will be released to us from escrow and applied to the payment or reimbursement of our organization and offering
expenses, selling commissions, dealer manager fees and due diligence expenses, leaving estimated net proceeds of approximately $1,050,360 available for investment, operations, the creation of reserves and the payment of acquisition fees. Once we
receive the minimum subscription proceeds, we will establish working capital reserves of up to 1.0% of the gross offering proceeds. Until offering proceeds are used for the acquisition or operation of our portfolio, the offering proceeds will be
held in short-term, highly liquid investments which we believe will afford appropriate safety of principal. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">After we receive
the minimum offering amount of $1,200,000 we will continue to sell our shares until the end of the offering period. As additional shares are sold, we will experience an increase in liquidity as cash is received. As we use cash to acquire equipment
or other equipment-related investments, our liquidity will decrease. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager has determined that the minimum offering
amount represents a level of subscription proceeds which will enable our portfolio to be sufficiently diversified. Our maximum offering amount has been determined by our manager with reference to the subscription proceeds it believes we may be able
to raise over our offering period. The price of $10.00 per share has been determined by our manager by dividing our maximum offering amount of $200,000,000, excluding our DRP, by 20,000,000 shares, the maximum amount of shares that we are offering,
excluding our DRP. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">With the net proceeds of this offering, we will primarily invest, directly or indirectly, in equipment on
lease to third parties. We may also allocate a portion of the offering proceeds to other equipment-related investment activities, including those where returns are derived from the use or trading of underlying equipment. We will acquire our
portfolio with cash and debt, and we may leverage assets after acquiring them to fund additional investments. We do not anticipate that the level of debt across our portfolio at any one time will exceed 40.0% of the total purchase price of our
portfolio. Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio. We do not currently have any arrangements with, or commitments from, any lender with
respect to debt financing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our liquidity may be adversely affected by unanticipated or greater than anticipated operating
costs or losses, including a client&#146;s inability to make timely lease payments. We anticipate that we will fund our operations from cash flow generated by operating and financing activities. The manager has no intent to permanently fund any cash
flow deficit of ours or provide other financial assistance to us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We intend to incur indebtedness in purchasing our
portfolio. During periods of general illiquidity in financial markets, such as existed during 2008 and 2009, it may not be possible for our manager to source debt at an appropriate interest rate, on appropriate terms or at appropriate levels. This
may mean our portfolio is sub-optimally leveraged, reducing overall returns to our investors. If debt on appropriate terms is not available to us at all, the reduced leverage of our portfolio may significantly reduce overall returns and
distributions to our members. It may also result in us not effecting attractive equipment acquisition opportunities, further reducing our overall returns. We are prohibited from obtaining permanent debt facilities from our manager or its affiliates.
</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_31"></A>FIDUCIARY DUTIES AND CONFLICTS OF INTEREST </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>In General </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Various
conflicts of interest will arise out of the relationship between us and our manager and its affiliates. Our manager will have sole control over our organization and operations and will resolve conflicts of interest through the exercise of its
judgment. Our manager has fiduciary obligations to us and to you in your capacity as a member that require it to take the best interests of our members into account in managing our affairs and assets. In addition, our operating agreement contains
provisions designed to guard against conflicts of interest. See &#147;Summary of our Operating Agreement&#150;Management.&#148; However, our operating agreement does not directly address each potential conflict and does not provide for any
particular mechanism to fully resolve these conflicts. There is a possibility that not all conflicts will be resolved in a manner favorable to us. Potential conflicts include those set forth below. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_32"></A>Potential Conflicts of Interest </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Receipt of Fees and Other Compensation by Our Manager and its Affiliates </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We will pay substantial fees to our manager and its affiliates, including the dealer manager. Further, we must reimburse our manager and its affiliates for costs incurred by them in managing us and our
portfolio of equipment, equipment leases and other equipment related investments. In addition, we intend to use leverage to acquire equipment, as it will enable us to increase the size and diversification of our portfolio. We anticipate that the
level of debt across our portfolio, once fully invested, will be approximately 40.0% of the total purchase price of all equipment in our portfolio. Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total
purchase price of all equipment in our portfolio. Using borrowings to increase the amount of equipment and leases we acquire will also increase our manager&#146;s acquisition and management fees, which are directly based on the total amount of our
assets. See &#147;Management Compensation.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Subject to its fiduciary duties and the terms of our operating agreement,
our manager has sole discretion with respect to the terms and timing of our investments, although it is anticipated that those investments will be consistent with our investment objectives and policies. The agreements and arrangements, including
those relating to compensation, between us and our manager and its affiliates are not the result of arm&#146;s-length negotiations and may create conflicts between the interests of our manager and its affiliates on the one hand and us and our
members on the other. However, our manager believes that the compensation and fees provided for in our operating agreement are consistent with practices in the industry and the NASAA Guidelines in effect on the date of this prospectus. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our Manager and its Affiliates May Compete With Us </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager, its affiliates and the equipment leasing program already managed by our manager will engage in equipment acquisitions, leasing transactions and other equipment-related activities on their own
behalf or on behalf of other entities. In the future, our manager or its affiliates may sponsor other equipment leasing programs and they will have legal and financial obligations with respect to those programs which are similar to our
manager&#146;s obligations to us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will not, however, publicly offer for sale interests in more than one equipment
leasing and/or finance program simultaneously unless the programs have different investment objectives or unless the interests for sale are for specified equipment programs. Furthermore, our manager will take into account a number of factors when
allocating investment opportunities between public equipment leasing funds it manages. See &#147; &#150;Managing Conflicts of Interests&#150;Allocation of Investment Opportunities.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under the operating agreement, our manager is required to devote to our affairs only that time as is necessary for the proper performance
of its duties under the operating agreement. As a result of its investments in, and management of, other programs and the fact that they have engaged and will continue to engage in other </FONT></P>
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business activities, our manager and its affiliates may not devote their full time to the performance of those duties. Therefore, conflicts may arise in the allocation of the time of our manager
and its affiliates between our activities and other activities in which they are involved. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Subject to its fiduciary duties
and the limitations set forth in our operating agreement, our manager or its affiliates have the right to take for their own accounts, or to recommend to any other program, any particular investment opportunity. They are under no obligation to
introduce potential investments to us. Accordingly, we might be deprived of investment opportunities. Our manager&#146;s investment committee or board of directors will resolve any conflicts in determining and allocating investments between us and
our manager, or between us and any other program managed by our manager or its affiliates. See &#147;Investment Objectives and Policies&#150;Transaction Review and Approvals&#150;Investment Committee.&#148; </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Related Party Transactions </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Related party transactions are those where we, or our manager on our behalf, transact with companies in the Macquarie Group. Our manager and its affiliates are permitted to enter into certain transactions
and perform certain services for us. Although those transactions will be subject to the limitations set forth in this prospectus and our operating agreement, those transactions, or the potential for those transactions, could cause conflicts for our
manager with respect to performing its duties. Related party transactions will not be the result of an arm&#146;s length negotiation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our operating agreement permits us to invest in joint ventures with other programs that are sponsored by our manager or its affiliates and to co-invest in transactions with our manager&#146;s affiliates.
Because the co-venturers in these investments will be in different financial positions, conflicts of interest could result. See &#147;Investment Objectives and Policies&#150;Co-Investments.&#148; We may not have complete control over the equipment
held by joint ventures which could result in an impasse over major decisions. Even if we have the right to buy equipment from other joint venturers or co-investors, we may not have the resources do so. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our Manager&#146;s Decisions Will Affect Our Cash Distributions and Our Manager&#146;s Compensation </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Once we are fully invested, we may borrow up to 65.0% of the total purchase price of all equipment in our portfolio. Our manager&#146;s
decisions regarding leverage will affect the size of our equipment portfolio and our debt repayment obligations, which in turn will affect the net cash we receive from our equipment portfolio. Using borrowings to increase the amount of equipment and
leases we acquire will also increase our manager&#146;s acquisition and management fees, which in turn will affect cash available for distributions. See &#147;Management Compensation.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under our operating agreement, our manager may cause us to establish and maintain cash reserves and has the discretion as to the amount
of those reserves. Our manager may be exposed to liability to our creditors if our reserves and other sources of income are insufficient to pay our contingent liabilities. If our manager increases the amount of cash reserves, the amount of cash
available for distributions to you and our other members will decrease and our manager&#146;s exposure to our contingent liabilities will decrease, creating a conflict of interest between our members and our manager. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our Manager or its Affiliates May Purchase Shares as an Investor </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Prior to the end of the offering period, our manager or its affiliates may, but are not obliged to, purchase shares in our offering. In any event, any investment by our manager in us will not exceed 20%
of the total amount raised in our offering. If our manager or its affiliates purchase our shares, our manager or its affiliates generally will: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">share in our income, losses and distributions on the same basis as you and our other investors as described in the &#147;Income, Losses and
Distributions&#148; section of this prospectus; and </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">56 </FONT></P>



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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">have the same voting rights, except that they are prohibited from voting on the removal of our manager as manager and the appointment of a successor
manager. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any purchase of shares by our manager or its affiliates as investors will dilute the voting rights
of you and our other investors. See the &#147;Summary of Our Operating Agreement&#151;Meetings and Voting Rights of Our Members.&#148; </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>We Will Rely on the Employees of Our Manager&#146;s Affiliates </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We will not have any independent employees or officers, and will rely solely on our manager to manage us and our operations. Our manager will provide us with those administrative services necessary for
our prudent operation in accordance with the terms of our operating agreement. In turn, our manager does not have any employees and will rely solely on the employees of its affiliates to conduct its operations. Those employees are not required to
spend all of their time on our manager&#146;s affairs or on affairs which affect us and in fact may devote significant time to the affairs of our manager&#146;s affiliates and will be compensated by our manager&#146;s affiliates for those services.
Those employees will also devote significant time to an equipment leasing program already managed by our manager, and may also devote significant time to equipment leasing programs our manager comes to manage in the future. The availability, or lack
thereof of these employees to provide services to our manager may create significant conflicts between us and our manager and its affiliates. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager will depend on its ultimate parent company, Macquarie Group Limited, and its subsidiaries for management and administrative functions and interim financing for capital and operational
expenditures and other expenses. Macquarie Group Limited and its subsidiaries are under no obligation to pursue a future business strategy that favors us. The directors and officers of Macquarie Group Limited have a fiduciary duty to make decisions
that are in the best interests of their stockholders. The dependence of our manager on the Macquarie Group for administrative services creates a conflict of interest between us and the Macquarie Group. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>The Resolution of Conflicts Will Be Undertaken by Employees of Our Manager&#146;s Affiliates </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In the event of a conflict between us and our manager or our manager&#146;s affiliates, the conflict will be resolved either by our
manager&#146;s investment committee or by our manager&#146;s board of directors. It is anticipated that the majority of the members of our manager&#146;s investment committee and board of directors will be employees of our manager&#146;s affiliates.
Members of our manager&#146;s investment committee may also be officers and directors of our manager. Although our manager has fiduciary obligations to us and to you that require it to take the best interests of our members into account in managing
our affairs and assets, a conflict of interest relating to the resolution of conflicts between us and our manager and its affiliates does exist. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Distribution of Shares </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">No independent lead underwriter has been
engaged for the distribution of our shares; accordingly, we will not have the benefit of an independent &#147;due diligence&#148; review and investigation of the type normally performed by an unaffiliated, independent lead underwriter in connection
with an offering of securities. Although the dealer manager believes that its investigation of us and the manager for purposes of this offering of shares has been as complete as would be the case in dealing with unaffiliated parties and although the
dealer manager has retained its own separate counsel, there is no assurance that the due diligence has been performed in the same manner as that of an independent managing underwriter. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Independent selling dealers engaged by the dealer manager to sell our shares may perform due diligence on us and our manager and may
engage independent counsel in this regard. However, we cannot assure you that appropriate due diligence has been undertaken by those independent selling dealers or their counsel. The interests of the selling dealers may be in conflict with your
interests. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Lack of Separate Representation </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We and our manager and its affiliates, other than the dealer manager, are not represented by separate counsel. We have not retained
independent counsel to represent the interests of prospective investors in connection with the offering of shares. The dealer manager is represented in this offering by Porter&nbsp;Hedges LLP. Prospective investors should seek independent counsel if
they so desire or if any legal matters discussed in this prospectus are unclear. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Representation in Tax Audit Proceedings
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager is designated as our &#147;tax matters partner&#148; and is authorized and directed by our operating
agreement to represent us and our members, at our expense, in connection with all examinations of our affairs by federal tax authorities, including any resulting administrative or judicial proceedings. Those proceedings may involve or affect other
programs for which our manager or its affiliates act as manager. In those situations, the positions taken by our manager with respect to us may have differing effects on us and the other programs. Any decisions made by our manager with respect to
those matters will be made in a manner consistent with its duties to us and our members. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_33"></A>Managing Conflicts of
Interest </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Our Manager&#146;s Fiduciary Duties </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We are a limited liability company formed under the Delaware Limited Liability Company Act, or the Delaware Act. This summary, which describes in general terms the duties of the manager and remedies
available to you if the manager breaches its duties, is based on statutes and judicial and administrative decisions as of the date of this prospectus. This is a developing and constantly changing area of the law. If you have questions concerning the
manager&#146;s duties or you believe that the manager has breached its fiduciary duty, you should consult your own counsel. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Delaware Act does not set forth any duties that a manager owes to a limited liability company and to its members. Nevertheless, it
does allow for duties to be imposed on a manager contractually through a limited liability company&#146;s limited liability company operating agreement. In this regard, under the terms of our operating agreement, the manager has imposed upon itself
the following duties: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to act as a fiduciary for the safekeeping and use of all our funds and assets, whether or not in the manager&#146;s immediate possession or control,
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to not employ, or permit any other person to employ, our funds or assets in any manner other than as permitted by the operating agreement, and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to devote that amount of its time deemed necessary in its absolute discretion to carry out its duties to us. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under the Delaware Act, when discharging duties imposed by a limited liability company operating agreement, a manager is protected from
liability to the extent it relies in good faith upon the records of the limited liability company and upon information, opinions, reports or statements presented by a person to the manager that the manager reasonably believes are within that
person&#146;s professional or expert competence. Our operating agreement contains a provision substantially similar to the provision of the Delaware Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">There are a number of remedies available to you if you believe our manager has breached its fiduciary duty. You should contact your legal counsel if you believe that our manager has breached its fiduciary
duty. Under Delaware law and subject to certain conditions, a member may file a lawsuit on behalf of the fund, known as a derivative action, to recover damages resulting from a breach by our manager of its fiduciary duty. In addition, a member may
bring a class action and sue on behalf of himself and all other members to recover damages for a </FONT></P>
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breach by our manager of its fiduciary duty. Derivative and class actions are complex and rapidly changing, and you should consult with your legal counsel if you have questions regarding remedies
available to members in the event of a breach of fiduciary duty by our manager. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Limitations Under Our Operating Agreement
</I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Certain provisions of our operating agreement restrict our actions and the actions of our manager and its affiliates
in order to reduce certain conflicts of interest and to protect your interests and the interests of our other members in the event of a conflict of interest. See &#147;Summary of Our Operating Agreement.&#148; Relevant provisions of our operating
agreement include the following: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager and its affiliates may not receive fees or commissions from us except as provided in our operating agreement. See &#147;Management
Compensation.&#148; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The expenses for which our manager and its affiliates may be reimbursed are limited. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Duplicate fees are prohibited. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may only purchase equipment or equipment leases from our manager or its affiliates if those transactions have been warehoused on our behalf on a
temporary basis. We may only enter into joint ventures with our manager&#146;s affiliates with the approval of a majority of the directors of our manager&#146;s board of directors, including the majority of our manager&#146;s independent directors.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may not give our manager or its affiliates rebates or give-ups or participate in any transaction with them that would circumvent the restrictions in
our operating agreement. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may not make loans to our manager or its affiliates. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may not invest in or underwrite the securities of other programs. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may not issue any shares after this offering terminates. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may not issue shares in exchange for property. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Allocation of Investment Opportunities </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager manages another
equipment leasing fund, Macquarie Equipment Leasing Fund, LLC, which is currently in its operating phase. It is likely that our manager will manage other equipment leasing funds in the future. Investment opportunities may arise which are suitable
both for us and for those other equipment leasing funds. In those cases, when allocating investment opportunities between us and other equipment leasing funds it manages, our manager will take into consideration factors which include the following:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">specified equipment programs will have first preference for investment opportunities which meet their investment guidelines;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the period of time in which the funds have been seeking investments; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the size of the investment opportunity and the cash available to the funds to make such an investment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the extent to which the investment will contribute to each fund meeting its investment objectives, including the objective of portfolio
diversification; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the duration of the investment and the remaining duration of each fund; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the anticipated cashflow and performance effect of the investment on each fund. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">These considerations will not restrict our manager&#146;s affiliates or other funds managed by our manager&#146;s affiliates from
considering or accepting investment opportunities. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">59 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Additional Strategies for Managing Conflicts of Interest </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Separation of Approval Authority </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager&#146;s board of directors and investment committee includes persons who are primarily dedicated to our manager&#146;s business. In order to reduce the potential for conflicts of interest,
representatives of Macquarie Group leasing businesses who originate potential transactions for consideration by our manager, or who are responsible for approving equipment acquisition transactions on behalf of those leasing businesses, will not
serve on our manager&#146;s board of directors or investment committee, other than temporarily in the event of a vacancy on such board or committee. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Dedicated Staff Resources </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will be assigned Macquarie Group
staff whose activities are primarily dedicated to the operations of our manager. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Physical Separation of Activities </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The central operations of our manager are situated within a Macquarie Group office that is physically separated from the Macquarie
Group&#146;s other leasing and equipment trading activities. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Separation of Confidential Information </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Confidentiality policies and procedures within the Macquarie Group are designed to ensure that data recorded within Macquarie Group
electronic information systems will be separated or password protected so that data relating to us may only be accessed by Macquarie Group staff who either perform services on behalf of us, our manager or dealer manager or who provide managerial
oversight of those people. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>No Investments by Staff Associated with Our Manager </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As a strategy to avoid potential conflicts of interest between us and employees of the Macquarie Group of Companies, any person who:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is a member of our manager&#146;s board of directors; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is a member of our manager&#146;s investment committee; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is a Macquarie Group employee who is substantially involved in the day to day operations of us or our manager; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is a Macquarie Group employee assigned to our dealer manager and who is involved in the marketing of our shares; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is a Macquarie Group employee who exercises oversight of any person falling within any of the categories above; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is an immediate family member or an associate person or personal company controlled by any of the above persons; </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">will be prohibited from buying our shares. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Chinese Walls </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Chinese
walls are a crucial part of the regulatory system for financial markets. They allow a diversified financial services firm to conduct a number of businesses which could not otherwise be conducted by the one firm. Chinese walls restrict the flow of
information within a firm to ensure that information that is potentially price sensitive or confidential to one department is not improperly communicated, intentionally or inadvertently, to any other department within the firm. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">60 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Macquarie Group maintains Chinese walls between business areas according to their
function: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">On the private side of the wall&#150;those business areas that routinely receive or acquire confidential and/or inside information; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">On the public side of the wall&#150;those business areas that do not obtain price sensitive information or trade or deal in securities and other
financial products or provide investment advice. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager sits on the public side of Macquarie&#146;s
Chinese walls. Subject to limited exceptions that are managed by appropriate information protocols, the effect of this is that non-public information, or inside information, may not be communicated to our manager by private side businesses within
Macquarie. It is the responsibility of Macquarie Group employees that sit on the private side of the wall and provide services to our manager or that have managerial oversight to maintain the integrity of the Chinese Walls by keeping such
information strictly confidential. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Related Party Transactions and Independent Directors </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager has appointed an independent director to its board of directors. See &#147;Management.&#148; To mitigate conflicts which may
arise in related party transactions, our manager has adopted the following protocols: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">From time to time our manager may approve investments on our behalf which are then made by members of the Macquarie Group for sale to us. This
warehousing of investments will only occur for the purpose of facilitating our acquisition of equipment or the borrowing of money or obtaining of financing for us. Prior to the Macquarie Group entity purchasing an investment on our behalf, we would
commit to the relevant Macquarie Group entity to purchase that investment, and the relevant Macquarie Group entity would commit to sell that investment to us, once we have sufficient capital available for a purchase price determined according to a
pre-agreed mechanism; those mechanisms may include external enquiries by our manager or the exercise of business judgment by our manager on our behalf. Any equipment purchased by our manager or our manager&#146;s affiliates for sale to us in the
future will only be purchased from non-affiliates of our manager and will be held by our manager or our manager&#146;s affiliates on a temporary or interim basis only, generally not in excess of six months. Warehousing facilities may also take the
form of debt facilities provided by our manager or our manager&#146;s affiliate to facilitate our direct investment in transactions. We will only purchase equipment from, or enter into short-term debt facilities with, our manager or our
manager&#146;s affiliates if our manager believes it to be in our best interests. In these related party transactions our manager will engage legal counsel that is separate to that retained by the relevant Macquarie Group company to document or
review the transaction on our behalf. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Where the related party transaction relates to costs or expenses charged by affiliates of the manager to us that are related to a specific transaction,
that are not covered by another fee set out in this prospectus and that are expected to exceed $1,000,000 per annum, our manager will obtain a quote for the corresponding work from a non-affiliated entity. Our manager will only use its affiliate in
those circumstances where its affiliate is more cost-effective, or where special circumstances make the use of its affiliate preferable or unavoidable, provided that the cost associated with the service is reasonable in our manager&#146;s opinion.
This protocol will not apply to services such as staffing, accounting and information technology services provided to our manager by its affiliates. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may appoint affiliates of the manager, on a non-exclusive basis, to remarket equipment on our behalf. Any fees or expense reimbursements paid to our
manager&#146;s affiliates for the provision of such services will be done so in strict accordance with the procedures described in this prospectus and our operating agreement. See &#147;Management Compensation&#150;Operating Compensation.&#148;
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Policies and Procedures </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager maintains its own risk management framework, adapted from the broader Macquarie Group risk management framework. This risk management framework includes a number of policies and procedures
relating to, among other items, identifying, assessing and managing market, credit, liquidity, operational and legal risks. The risk management framework has been designed to reflect the market, regulatory, reputational and operational risks
specifically associated with our manager&#146;s operations and our activities. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">61 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_34"></A>THE MACQUARIE GROUP </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>The Macquarie Group of Companies </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager is a member of the Macquarie Group. The Macquarie Group, whose predecessor, Hill Samuel Australia Limited, was founded as a subsidiary of the UK merchant bank, Hill Samuel &amp; Co., in 1969,
is a diversified international provider of banking, financial, leasing, advisory and investment services. Headquartered in Sydney, Australia, the parent entity of the Macquarie Group, Macquarie Group Limited, is listed on the Australian Stock
Exchange. As of September 30, 2010, the Macquarie Group operated in more than 70 offices in 28 countries and had approximately 15,500 employees, over 3,700 of whom were located across 28 offices in North America. The Macquarie Group operates a
diversified range of financial services activities. These activities include banking services, leasing services, retail and institutional funds management services, corporate advisory services, real estate services, securities research and brokerage
services and treasury and commodity services. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As of September 30, 2010, the Macquarie Group had assets under management of
approximately $307 billion. These assets are either held by the Macquarie Group or by various listed and unlisted funds managed by the Macquarie Group. </FONT></P>
 <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center">

<IMG SRC="g147678g20j00.jpg" ALT="LOGO"> </P>
 <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Not all Macquarie Group offices undertake equipment leasing or asset management activities. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I><A NAME="toc147678_35"></A>The Macquarie Group&#146;s Leasing Expertise </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager forms part of the operating group responsible for the majority of the Macquarie Group&#146;s equipment leasing activities. As of September 30, 2010, the Macquarie Group&#146;s equipment
leasing group had approximately $8.6 billion of equipment leases under management for its own account with over 700 employees located in North America, Europe, Asia and Australia / New Zealand. These employees variously specialize in: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">lease origination across various equipment classes and industries; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">residual value investment determination and management; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">physical remarketing of equipment; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">technical assessment of equipment; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">client and asset management; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">equipment leasing technology platforms; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">accounting, legal, tax and compliance services for equipment leases. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">62 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Examples of equipment currently or previously financed by the Macquarie Group under various
lease structures include railcars, locomotives and trams, railway infrastructure, commercial jet aircraft engines, aircraft, semiconductor manufacturing equipment, maritime vessels, information technology equipment, utility equipment,
telecommunications equipment, medical equipment, road transportation equipment, power stations, electricity grids, marshalling yards, handling equipment, environmental and energy equipment and construction equipment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The operating group to which our manager belongs managed for its own account equipment leases for over 240,000 lessees as of September
30, 2010. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I><A NAME="toc147678_36"></A>The Macquarie Group&#146;s Leasing Team </I></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We believe that the extensive global presence of the Macquarie Group and its equipment leasing expertise will be key factors in our
ability to successfully identify attractive equipment lease opportunities that meet our investment criteria. Although our manager&#146;s affiliates provide no guarantee of investment referrals to us or to our manager, we plan to capitalize on the
significant contacts and transactional, origination and management expertise of our manager&#146;s board of directors and other equipment leasing executives within the Macquarie Group. As of the date of this prospectus, key equipment leasing
executives within the Macquarie Group division to which our manager belongs include: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Garry Farrell, </I>Executive Director
of the Macquarie Group, has overseen the Macquarie Group&#146;s principal corporate finance, asset finance and equipment leasing activities since 2000. Mr.&nbsp;Farrell joined the Macquarie Group in 1986 having previously served as a corporate
attorney with Mallesons Stephen Jacques, a leading Australian law firm. During his time with Macquarie, Mr.&nbsp;Farrell has operated in fields including corporate, asset, structured and project finance, securitization and export credit finance.
Prior to 2000, Mr.&nbsp;Farrell was head of the Macquarie Group&#146;s European investment banking business. Mr.&nbsp;Farrell holds a Bachelor of Economics, Bachelor of Laws and Master of Laws from the University of Sydney and is an admitted
attorney in New South Wales, Australia. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>David Coons, </I>President of Macquarie Electronics USA Inc., joined the Macquarie
Group in 2002 and was instrumental in the establishment of Macquarie Electronics, an equipment leasing business. Mr.&nbsp;Coons is based in the Macquarie Group&#146;s San Diego office. Prior to joining Macquarie, Mr.&nbsp;Coons spent nine years with
Comdisco Electronics, a division of Comdisco, Inc., his last role being that of Executive Vice President and Head of Worldwide Sales. Prior to that time, Mr.&nbsp;Coons held positions with Equitable Life Leasing in Dallas for a period of seven
years, with Manufacturers Hanover Leasing in Dallas and within Seafirst Leasing, a division of Seattle First National Bank. Mr.&nbsp;Coons obtained an MBA in Finance from the University of Texas and a Bachelor of Science from Rensselaer Polytechnic
Institute in Troy, NY. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Dave Edwards, </I>President of Macquarie Rail Inc., joined the Macquarie Group in 2006 and was
instrumental in the establishment of the Macquarie Group&#146;s freight rail operating lease business, headquartered in Chicago. From 1981 to 2004, Mr.&nbsp;Edwards was employed by GATX Corporation, a diversified leasing and finance </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">company. Mr.&nbsp;Edwards held a variety of positions during this time, including Chief Financial Officer and most recently President of GATX Rail, the
second largest freight rail operating lease business in the world at that time. Mr.&nbsp;Edwards holds a Bachelors Degree in Economics and History and a Masters Degree in Economics from the University of California, Davis. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Andrew Gee, </I>Executive Director of the Macquarie Group, joined the Macquarie Group in 1997. Mr.&nbsp;Gee currently heads the global
operations of Macquarie Equipment Finance, a specialist information technology leasing and services business. Mr.&nbsp;Gee has been instrumental in the growth of Macquarie Equipment Finance in North America, Australia / New Zealand, Asia and Europe.
Mr.&nbsp;Gee holds a Master of Applied Finance from Macquarie University in Sydney, Australia and a Master of Accounting from the University of Southern Queensland, Australia. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">63 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Greg Goldstein, </I>President of Macquarie Equipment Finance Inc., heads the North
American operations of the Macquarie Group&#146;s specialist information technology leasing and services business. Mr.&nbsp;Goldstein joined the Macquarie Group in 2008 following Macquarie&#146;s acquisition of leasing operations from CIT Group.
Mr.&nbsp;Goldstein had been involved with those leasing operations since 1990, including periods with that business&#146; preceding owners AT&amp;T Systems Leasing and Newcourt Financial&#150;Systems Leasing. Prior to his appointment as President,
Mr.&nbsp;Goldstein managed the product marketing, vendor programs, debt syndication and portfolio management functions. Mr.&nbsp;Goldstein&#146;s background also includes service as a CPA for KPMG Peat Marwick. Mr.&nbsp;Goldstein holds a Bachelor
Degree in Accounting from Wayne State University in Michigan. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Niall Morrissey, </I>Executive Director of the Macquarie
Group, joined the Macquarie Group in 1998. Mr.&nbsp;Morrissey is presently based in Tokyo, Japan, overseeing regional equipment leasing activities in Asia. Previously, Mr.&nbsp;Morrissey established the Macquarie Group&#146;s equipment leasing
activities in South Korea, China, Singapore and Malaysia. Prior to joining Macquarie, Mr.&nbsp;Morrissey served as an area sales manager in southern California for GE Capital. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Andrew Pearce, </I>President of Macquarie Aviation Capital Limited, joined the Macquarie Group in 2000 and currently heads the Macquarie Group&#146;s specialist aircraft engine leasing business which
operates from Dublin, Ireland. Prior to joining the Macquarie Group, Mr.&nbsp;Pearce held positions at Airbus Industrie in Toulouse, TNT Express Worldwide UK and Ansett Worldwide Aviation Services. Mr.&nbsp;Pearce holds a Master of Laws from the
University of Sydney, Australia, a Bachelor of Laws from the University of New South Wales, Australia, and a Bachelor of Commerce from the University of New South Wales, Australia. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Lloyd Thomas, </I>Executive Director of the Macquarie Group, joined the Macquarie Group in 1998 and was instrumental in establishing
Macquarie Leasing, the Macquarie Group&#146;s small ticket equipment leasing business. Mr.&nbsp;Thomas, who is presently based in Sydney, Australia, has overseen all aspects of the establishment, growth and periodic securitizations of the Macquarie
Leasing portfolio. Prior to joining the Macquarie Group, Mr.&nbsp;Thomas served as General Manager Leasing at Suncorp Metway, National Leasing Manager at Metway Bank Limited and Chief Accountant at Prudential Finance Limited. Mr.&nbsp;Thomas holds a
Bachelor of Business Studies and is a Certified Practicing Accountant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>John Wilson, </I>Executive Chairman of Capital
Meters Limited and Macquarie Leasing Limited, joined the Macquarie Group in 1997. Since 2004, Mr.&nbsp;Wilson has been head of two UK leasing businesses which lease traditional and smart gas and electricity meters to British Gas and other major UK
energy suppliers. Prior to his present role, Mr.&nbsp;Wilson oversaw a number of new leasing business initiatives within the Macquarie Group. Before joining Macquarie, Mr.&nbsp;Wilson worked in a senior managerial position for AMP Limited, a leading
Australian wealth management company, and served as an officer for nine years in the Royal Australian Navy. Mr.&nbsp;Wilson has an MBA from the University of Technology, Sydney, Australia, a Bachelor of Science from the University of New South
Wales, Australia, and a Graduate Diploma in Management Science from the University of Canberra, Australia. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager&#146;s
affiliates are not obligated to introduce transactions to us and there is no assurance that our manager&#146;s affiliates will introduce potential transactions to us. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">64 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_37"></A>MANAGEMENT </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager is Macquarie Asset Management Inc. Our investment decisions will be made by our manager&#146;s investment committee, which at
the date of this prospectus comprises Messrs Fahy and Edghill, or by our manager&#146;s board of directors, which at the date of this prospectus comprises Messrs Fahy, Edghill and Pitts. See &#147;&#150;Our Board of Directors and Investment
Committee.&#148; Our manager and the persons making our investment decisions can be contacted at: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s principal office at 225 Franklin St, 17th Floor, Suite 1700, Boston, Massachusetts, 02110; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager&#146;s telephone number, 866-965-7622. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager is a member of the Macquarie Group. In managing us, our manager will have access to the experienced leasing, funds management and other resources of the Macquarie Group. Our manager is the
sponsor of Macquarie Equipment Leasing Fund, LLC, an equipment leasing program which completed its offering period on June &nbsp;&nbsp;&nbsp;&nbsp;, 2011 and is currently in its operating period. We have provided prior performance information
related to Macquarie Equipment Leasing Fund, LLC in the Prior Performance Tables included as Exhibit B to this Prospectus in order to enable you to evaluate the experience of our manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager&#146;s website address is www.macquarie.com/mami. The information contained on our manager&#146;s website is not part of this
prospectus. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">65 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_38"></A>Organizational Diagram </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following organization chart sets out the ownership relationship between our manager, the dealer manager and the Macquarie Group as of
the date of this prospectus. It does not contain all of the subsidiaries of the Macquarie Group Limited. All arrows represent a 100% shareholding in the subsidiary companies. </FONT></P>
 <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center">

<IMG SRC="g147678g46g52.jpg" ALT="LOGO"> </P>
 <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_39"></A>Our Board of Directors and Investment Committee </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following table provides information regarding the board of directors of our manager. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="51%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="43%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:20pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Name</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Age</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Title</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">David Fahy</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Director&nbsp;and&nbsp;President</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Duncan Edghill</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">33</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Director&nbsp;and&nbsp;Vice&nbsp;President</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">James A. Pitts</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">71</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Independent Director</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>David Fahy
</I>has been President of our manager since its inception on August&nbsp;21, 2008. Mr.&nbsp;Fahy has been with the Macquarie Group since joining its equipment leasing group in September 1998. Since June 2006, Mr.&nbsp;Fahy has been responsible for
global equipment leasing investment and co-investment opportunities for both </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">66 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
institutional and retail investors. Mr.&nbsp;Fahy is situated in Sydney, Australia, and is in frequent attendance at our manager&#146;s office in Boston. From July 2001 to June 2006,
Mr.&nbsp;Fahy was responsible for the Macquarie Group&#146;s structured technology syndication investments business. Prior to joining Macquarie, Mr.&nbsp;Fahy was employed at Coopers and Lybrand in Sydney, Australia from January 1987 to September
1998 in a number of roles, including that of Tax Director, and at Ernst&nbsp;&amp; Young in Dublin, Ireland from September 1982 to December 1986 in a number of roles, including that of chartered accountant. Mr.&nbsp;Fahy holds a Bachelor of Commerce
from University College Galway, Ireland and is a Fellow of the Institute of Chartered Accountants in Ireland and a member of the Institute of Chartered Accountants in Australia. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Duncan Edghill</I>, Director and Vice President of our manager, joined the Macquarie Group in February 2001. Situated in Boston,
Mr.&nbsp;Edghill has been primarily dedicated to the operations of our manager since its inception. From April 2005 to May 2008, Mr.&nbsp;Edghill was based in the Macquarie Group&#146;s Vienna, Austria office where he was involved in the
establishment of a European equipment leasing business and in the development of equipment leasing investment opportunities. From February 2001 to April 2005, Mr.&nbsp;Edghill was based in the Macquarie Group&#146;s Sydney, Australia office in a
variety of equipment leasing roles including that of attorney for several leasing businesses. Mr.&nbsp;Edghill holds a Bachelor of Laws and a Bachelor of Commerce from the University of New South Wales, Sydney, Australia, and is an admitted attorney
in New South Wales, Australia. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>James A. Pitts</I>, Independent Director of our manager, joined the board of directors of
our manager in March, 2009. Situated in Boston, Mr.&nbsp;Pitts was a Director of Wainwright Bank&nbsp;&amp; Trust Company, a NASDAQ listed community bank, from May 2005 until November 2010, when the bank was sold. Mr.&nbsp;Pitts was Chair of
Wainwright Bank&nbsp;&amp; Trust Company&#146;s Audit Committee from January 2008 and was a rotating member of its Executive Committee from April 2006 until the bank&#146;s sale. Mr.&nbsp;Pitts is a Director of the National Association of Corporate
Directors New England Chapter and has been the chair of its Audit Committee since June 2005. From 1996 to May 2004, Mr.&nbsp;Pitts served as the Chief Financial Officer and Treasurer of The Boston Foundation, a $650 million community foundation, and
from June 2004 to August 2004, Mr.&nbsp;Pitts served as the Chief Investment Officer and Treasurer of The Boston Foundation. From 1988 to 1996, Mr.&nbsp;Pitts held positions including Executive Vice President and Chief Financial Officer of Clean
Harbors, Inc., a NASDAQ listed environmental disposal and service firm, as well as Chief Financial Officer of Bain and Company, an international consulting firm. Prior to that time, Mr.&nbsp;Pitts also held senior financial roles in publicly traded
multinational corporations where he held wide responsibilities for SEC reporting, financial statement preparation, internal audit, risk management and compliance and regulatory matters. In his roles as Chief Financial Officer, Mr.&nbsp;Pitts has
reviewed and overseen various equipment leasing transactions. Mr.&nbsp;Pitts holds a MBA from the University of Connecticut and a BBA from Niagara University, New York. Mr.&nbsp;Pitts is a Certified Public Accountant and holds a Certificate of
Director Education. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Messrs. Fahy, Edghill and Pitts may resign their positions with our manager at any time. Although there
are a number of executives experienced in the equipment leasing industry within the Macquarie Group who could be appointed to replace Messrs Fahy and Edghill as non-independent directors, the executive officers of our manager will have the most
current information about and experience with our business and portfolio. Accordingly, the departure of these individuals from our manager could result in business disruptions and investment decisions that may not be consistent with our investment
objectives and policies, which could cause us to experience reduced returns from our portfolio. The board of directors of our manager will establish an investment committee which may be comprised of directors and officers of the manager, as well as
employees of our manager&#146;s affiliates. Initially, the investment committee will be comprised of Messrs. Fahy and Edghill. Our manager&#146;s investment committee will make decisions on whether or not we should invest in a particular
transaction. See &#147;Investment Objectives and Policies&#150;Transaction Review and Approvals.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Independent Directors
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under our operating agreement, the board of directors of our manager must consist of at least one independent director,
except for a period of 90 days after the death, removal or resignation of an independent </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">67 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
director. An independent director may not, directly or indirectly (including through a member of his or her immediate family), be associated with our manager or its affiliates within the last two
years before becoming a director and at such time an independent director may not own any interest in, be employed by, have any material business or professional relationship with, serve as an officer or director of our manager&#146;s affiliates or
perform services (other than as an independent director) for us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager, and not us, will be responsible for the payment
of any fees or retainers to our manager&#146;s independent directors. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_40"></A>Transaction Sources </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We anticipate that most, if not all, of our equipment leases and other investments will be introduced to us by members of the Macquarie
Group. In particular, we expect that the Macquarie Group&#146;s equipment leasing group will introduce most, if not all, of our transactions to us. See &#147;The Macquarie Group&#150;The Macquarie Group of Companies&#150;The Macquarie Group&#146;s
Leasing Expertise.&#148; Our manager is operated by the Macquarie Group&#146;s leasing group. We will not however be precluded from considering investment opportunities introduced by other non-Macquarie Group parties. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not employ our own full-time officers, managers or employees. Instead, our manager will supervise and control our business
affairs. We will be reliant upon employees of the Macquarie Group of Companies, of which our manager is a member. See &#147;The Macquarie Group.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager&#146;s affiliates are not obligated to introduce transactions to us and there is no assurance that they will do so. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>License Agreement </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Group Limited has licensed use of the
&#147;Macquarie&#148; name and logos to Macquarie Financial Holdings Limited, which in turn has granted us a non-exclusive and revocable license to use the &#147;Macquarie&#148; name and logos. No license fees are payable by us for use of the
&#147;Macquarie&#148; name and logos. Macquarie Group Limited has registered the logos in the U.S. Patent and Trademark Office. Macquarie Group Limited has also filed an application for the mark MACQUARIE with the U.S. Patent and Trademark Office.
Macquarie Financial Holdings Limited would be expected to terminate our license to use the &#147;Macquarie&#148; name and logos if our manager ceases to be our manager. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">68 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_41"></A>CAPITALIZATION </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our capitalization, as of the date of this prospectus and as adjusted to reflect the issuance and sale of the shares offered hereby
assuming (i)&nbsp;that we receive the minimum offering amount of $1,200,000, and (ii)&nbsp;that the maximum 20,000,000 shares are sold at the public offering price of $10.00 per share, in each case excluding shares sold under our DRP, is as follows:
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="66%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>As of<BR>February&nbsp;28,<BR>2011</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Minimum<BR>$1,200,000</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Maximum<BR>$200,000,000 </B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Shares of Membership Interest ($10.00 per share)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">200</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">120,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">20,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total Capitalization</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,202,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">200,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Less-Estimated Organization and Offering Expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">149,640</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">24,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Net Capitalization</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,050,360</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">176,000,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">69 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_42"></A>INCOME, LOSSES, DISTRIBUTIONS AND DISTRIBUTIONS POLICY
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Allocations of Net Income, Net Loss and Distributions among Investors. </I>Our manager will have the sole discretion
to determine what portion, if any, of cash on hand will be invested and reinvested in equipment and what portion will be distributed to our members. Allocation of net income and net loss will be made 1.0% to our manager and 99.0% to our members
until investor return is achieved. We will also pay our manager an amount equal to 1.0% of distributions until investor return is achieved. We will achieve investor return when our members have received a pre-tax 8.0%&nbsp;per annum internal rate of
return, compounded daily on all capital contributed to us, calculated on the date of distribution and taking into account all capital contributions and all distributions. Investor return includes a return equal to all capital contributions we have
received from you. Following investor return, we will pay our manager an amount equal to 19.0% of distributions made to our members. We will not make distributions in kind, that is, of our non-cash assets, except possibly on our liquidation, and
then only to a liquidating trust. <B> </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following graph is an illustrative example of a series of cashflows which would
result in &#145;investor return&#146; being achieved. <B>The following graph is an example only and is not a forecast or guarantee of the distributions we will make or that we will in fact achieve investor return. </B>The purpose of the following
graph is solely to illustrate (a)&nbsp;an example of the cashflows necessary for the achievement of &#145;investor return,&#146; and (b)&nbsp;that any distributions which are made will likely contain both a return on, and a return of, capital. For
illustrative purposes, an investment of $100,000 is assumed: </FONT></P>
 <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">

<IMG SRC="g147678g94k86.jpg" ALT="LOGO"> </FONT></P>
 <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The foregoing graph is an example only and is not a forecast or guarantee of the distributions we will make
or that we will in fact achieve investor return. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Timing of Distributions. </I>Generally, we will make cash distributions
on a monthly basis, beginning in the month following the first full month after we receive the minimum amount of $1,200,000 of offering proceeds and hold the initial closing of this offering. We anticipate that the monthly cash distributions,
provided funds are available, will be made by approximately 15 days after the end of each month. Since monthly cash distributions are subject to the availability of funds, any anticipated monthly distributions may not be made. We may, however, elect
not to make distributions until subscription funds have been invested, which could take as long as two years. If we elect to make distributions before funds have been fully invested, those distributions may be a return of capital rather than a
return on capital. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Federal Income Tax Deferral. </I>We anticipate that income taxes on a portion of our distributions may
be deferred during our early years due primarily to operating losses and cost recovery or depreciation deductions available from the portion of our equipment that is leased to third-party end users under the majority of our leases in the U.S., but
not from other types of investments. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">70 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Reinvestment of Our Net Revenues in Additional Leases During the Operating Period. </I>We
have the right to reinvest our net revenues during the offering and operating periods. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Return of Unused Capital. </I>We
will return to you and our other investors, without interest, any of your net subscription funds that we do not commit to investment or that are not required as reserves within the latter of 24 months after the beginning of this offering or 12
months after receipt by us. &#147;Net subscription funds&#148; means your original subscription amount minus the organization and offering expense allowance and dealer manager fees, selling commissions and due diligence expenses paid on the sale of
your shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Subscription funds will be considered committed for investment, and need not be returned, to the extent we have
written agreements in principle, commitment letters, letters of intent, option agreements or similar contracts for the use of your net subscription funds in our investments. However, we must complete our investments under those agreements within an
additional period of 12 months or return the uninvested funds to you and our other investors. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Sources of Cash
Distributions. </I>Our operating agreement permits us to establish an initial cash reserve for general working capital purposes. Any cash reserves used need not be restored, but if they are restored they may be restored from our operating revenues
or additional subscription funds. We may distribute to you and our other investors any cash reserves that our manager determines are no longer required for our operations. However, our manager intends to make distributions only out of our cash flow.
Our manager will seek to enter into transactions so that distributions will be fully supported by funds from operations and not from uninvested capital within three months of closing the minimum offering. Even where distributions are supported by
funds from operations however, each distribution we make is very likely to contain both a return on, and a return of, your capital. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We will not be permitted to borrow funds from our manager or any other person for the purpose of making distributions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Allocation of Profits and Losses for Tax Purposes. </I>Our profits and losses for each fiscal year and fiscal period are to be determined by us in accordance with the practices and accounting methods
followed in determining taxable income or loss for federal income tax purposes. Profits for any fiscal period during the operating period will be allocated as follows in proportion to our members&#146; share ownership: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">first, to recover any unrecovered loss allocated to any member pursuant to the operating agreement; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">second, 1.0% to the manager and 99.0% to members until investor return is achieved; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">thereafter, 19.0% to the manager and 81.0% to the members. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">During our liquidation period, while we sell our assets, profits will be allocated as follows: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">first, to recover any unrecovered loss allocated to any member pursuant to the operating agreement; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">second, the greater of (i)&nbsp;1.0% or (ii)&nbsp;the excess of the distributions made to the manager prior to investor return over the cumulative
amount of income previously allocated to the manager, to the manager and the balance to the members until investor return is achieved; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">thereafter, 19.0% to the manager and 81.0% to the members. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Losses for any fiscal period will be allocated: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">first, 19.0% to our manager and 81.0% to the members until the cumulative amount of losses allocated to those who are then members equals the
cumulative profits previously allocated to those members; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">thereafter, 1.0% to our manager and 99.0% to the members; provided that if the allocation of losses to any member would result in an adjusted capital
account deficit, then losses will be allocated to all other members, and when no member may be allocated losses without violating the limitation above, then losses will be allocated to the manager. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">71 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our operating agreement contains a &#147;qualified income offset&#148; provision which is
intended to prevent a member&#146;s capital account from becoming negative. For example, if a member receives an allocation of depreciation expense that causes that member&#146;s capital account to become negative, that member will be allocated
items of income or gain in an amount sufficient to eliminate the deficit balance in the member&#146;s capital account. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Distributions under the DRP. </I>When you subscribe for the minimum subscription of 500 shares or more, you may elect to participate
in the DRP, which allows you to reinvest distributions made by us during the offering period, by marking the applicable box in your subscription agreement. If you elect to participate in the DRP, we will pay distributions during the offering period
in the form of additional shares to the extent shares remain available for purchase under the DRP. You do not need to purchase a minimum number of shares under the DRP and we may issue fractional shares. Shares purchased under the DRP will be sold
for $9.00 per share, which represents the offering price less the dealer manager fee and selling commissions. See &#147;Questions and Answers About Our Distribution Reinvestment Plan.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you elect to participate in our DRP, we will use your distributions during the offering period to purchase your additional shares not
later than 30 days from the applicable distribution date, to the extent that shares remain available for purchase under the DRP. You may choose to reinvest your distributions at any time during the offering period by making the appropriate election
on your subscription agreement, which is included in Appendix C to this prospectus. If you wish to change the election you made on a previously submitted subscription agreement, you may do so by written notice to our manager as described in Appendix
E. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">72 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_43"></A>FEDERAL INCOME TAX CONSEQUENCES </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">THIS SECTION DISCUSSES THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES FOR AN INDIVIDUAL INVESTOR WHO IS A U.S. CITIZEN OR RESIDENT. THIS
SUMMARY IS NOT EXHAUSTIVE OF ALL POSSIBLE TAX CONSIDERATIONS AND IS NOT TAX ADVICE. MOREOVER, THIS SUMMARY DOES NOT DEAL WITH ALL TAX MATTERS THAT MAY BE RELEVANT TO YOU, AS A PARTICULAR PROSPECTIVE INVESTOR, IN LIGHT OF YOUR PERSONAL CIRCUMSTANCES.
THE TAX CONSEQUENCES OF INVESTING IN OUR SHARES WILL NOT BE THE SAME FOR ALL INVESTORS. A CAREFUL ANALYSIS OF YOUR PARTICULAR TAX SITUATION IS REQUIRED TO EVALUATE THIS INVESTMENT PROPERLY. THEREFORE, WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The discussion contained herein is based upon the Internal Revenue Code of 1986, or the Code, as amended, rules and
regulations published thereunder and published rulings and court decisions, as each exists on the date of this prospectus. The discussion could be significantly affected by statutory, regulatory or interpretive changes, including changes in the
ruling policy of the Internal Revenue Service, or the IRS, or by future court decisions. Any of these changes may or may not be retroactively applied to transactions entered into or completed prior to the change. This discussion necessarily
condenses or eliminates details that might adversely affect some prospective investors significantly as a consequence of specific factual circumstances affecting the investor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Tax treatment for other investors&#150;such as trusts, corporations, tax-exempt organizations and employee benefit plans &#150;are likely to differ significantly from the principal tax consequences
outlined in this section. Those other investors should consult with their tax advisors. See &#147;&#150;Investment by Employee Benefit Plans and Other Tax-Exempt Organizations.&#148; State and local tax consequences may differ from the federal
income tax consequences described below. See &#147;&#150;State and Local Taxes.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_44"></A>Opinion of Counsel
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Baker, Donelson, Bearman, Caldwell&nbsp;&amp; Berkowitz, a professional corporation, which we refer to as Baker Donelson,
our counsel, is of the opinion that, for federal income tax purposes: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. The Fund will be classified as a
partnership for federal income tax purposes and not as an association taxable as a corporation, and will not be treated as a publicly traded partnership. As a result, the Fund will not be subject to federal income taxation but will be required to
file a partnership information tax return each year. Each member will be required to take into account, in computing such member&#146;s federal income tax liability, his or her distributive share of all items of income, gain, loss, deduction or
credit (including items of tax preference) of the Fund, and will be subject to tax on such income or gain even if the Fund does not make any cash distributions. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">2. The allocations of income and loss to members should be considered by the IRS to have substantial economic effect and therefore should not be subject to challenge by the IRS on that basis. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Baker Donelson is unable to render, and therefore has not rendered, an opinion as to the status of the Fund&#146;s leases for federal
income tax purposes, because such status is subject to the facts and circumstances of each lease transaction, and the specific terms of such transactions will not be known until the transactions are entered into by the Fund, and no such transactions
are yet in place. If a leasing transaction is treated as a sale or financing rather than a true lease, the investors would not be entitled to cost recovery deductions with respect to such leases. On the other hand, a portion of the lease rental
payments would be deemed to constitute amortization of such financing or sales proceeds which would not be taxable. Inasmuch as the facts and circumstances of each lease transaction, and the tax consequences of each lease transaction, will not be
known until the transactions are entered into by the Fund, counsel can render no opinion as to such tax consequences or as to the risk resulting from the absence of such opinion. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">73 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In general, a member&#146;s distributive share of the Fund&#146;s income, gain, deduction or
loss will be determined in accordance with the operating agreement. Substantial economic effect is defined by the Treasury Regulations. The allocations included in the operating agreement should meet the economic effect test and should not be
significantly modified if challenged by the IRS. The economic effect of allocations also must be &#147;substantial,&#148; which takes into account the individual tax situation of an investor. It cannot be determined whether the economic effect of
the allocations in the operating agreement is substantial because the tax situations of the investors are unknown; however, because the allocations do not vary from year to year or investor to investor, we believe that the allocations will be deemed
to be substantial. If the IRS were successful in challenging the allocations, the investors&#146; share of tax loss could decrease or their share of taxable income could increase. See &#147;&#150;Allocations of Profits and Losses.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Counsel&#146;s opinion is based upon the facts described in this prospectus and upon additional facts that we provided to counsel about
our operations. Any alteration of our activities from the description we gave to counsel may render the opinion unreliable. Furthermore, the opinion of counsel is based upon law as of the date of the opinion, which is subject to change either
prospectively or retroactively. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You should note that the tax opinion represents only our counsel&#146;s best legal judgment
and has no binding effect or official status of any kind, on the IRS or otherwise; and neither we nor our counsel has requested a ruling from the IRS on any of the tax matters discussed in this prospectus. The IRS may not accept the conclusions set
forth in our counsel&#146;s opinion. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our counsel will not prepare or review our income tax returns, which will be prepared by
our manager and our independent registered public accounting firm. Our manager will make a number of decisions on tax matters such as the expensing or capitalizing of particular items, the proper period over which capital costs may be depreciated or
amortized and many similar matters. Those matters are usually handled by taxpayers, often with the advice of independent accountants, and are usually not reviewed with counsel. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">With regard to the tax consequences to you of an investment in our shares, your use of our counsel&#146;s tax opinion letter is subject
to the limitations of the Code and Treasury Regulations set forth below: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">With respect to any material federal tax issue on which our counsel has issued an opinion, its opinion may not be sufficient for you to use for the
purpose of avoiding penalties relating to any substantial understatement of income tax under Section&nbsp;6662(d) of the Code. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Because we have entered into a compensation arrangement with our counsel to provide certain legal services to us, including its tax opinion letter, our
counsel&#146;s tax opinion letter was not written and cannot be used by you for the purpose of avoiding penalties relating to any reportable transaction understatement of income tax under Section&nbsp;6662A of the Code. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>The limitations set forth above on your use of our counsel&#146;s tax opinion letter apply only for federal tax purposes. They do not
apply to your right to rely on our counsel&#146;s tax opinion letter and the discussion in the &#147;Federal Income Tax Consequences&#148; section of this prospectus under the federal securities laws. </B></FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_45"></A>Classification as a Partnership. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In order to be classified as a partnership for federal income tax purposes, we must not be classified as a corporation under the Code or elect to be classified as a corporation under the Code. We have
represented to Baker Donelson that we will not elect to be treated as a corporation for federal income tax purposes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Treasury
Regulations Section&nbsp;301.7701-2(b)(1), (3), (4), (5), (6), (7)&nbsp;and (8)&nbsp;sets forth the business entities which are considered to be corporations and thus not eligible for classification as a partnership. Baker Donelson has concluded
that we are not described in Treasury Regulations Section&nbsp;301.7701-2(b)(1), (3), (4), (5), (6)&nbsp;or </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">74 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
(8)&nbsp;because we are a Delaware limited liability company, are not an insurance company, do not engage in banking activities with deposits insured under the Federal Deposit Insurance Act and
are not owned by a state or political subdivision. We will be classified as a corporation under Treasury Regulations Section&nbsp;301.7701-2(b)(7) if we are classified as a corporation by any other section of the Code other than Code
Section&nbsp;7701. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Code Section&nbsp;7704 provides that a &#147;publicly traded partnership&#148; will be treated as a
corporation. A publicly traded partnership is one in which the interests in the partnership are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. An established securities
market includes a securities exchange, as well as a regular over-the-counter market. Treasury Regulations under Code Section&nbsp;7704 state that interests in a partnership are readily tradable on a secondary market or the substantial equivalent
thereof if (1)&nbsp;interests in the entity are regularly quoted by any person making a market in the interests; (2)&nbsp;any person regularly makes available to the public bid or offer quotes and stands ready to effect buy or sell transactions at
the quoted prices for itself or on behalf of others; (3)&nbsp;the holder of the interest has a readily available, regular and ongoing opportunity to sell the interest through a public means of obtaining or providing information; or
(4)&nbsp;prospective buyers and sellers otherwise have the opportunity to buy, sell or exchange interests in the partnership in a time frame and with the regularity and continuity that is comparable to the foregoing. Further, in order to be a
publicly traded partnership, the partnership must participate in the market or recognize the transfers made on the market. A partnership will be considered as participating in public trading where trading in its interests is in fact taking place and
the partnership&#146;s governing documents impose no limitation on the holders&#146; ability to readily transfer their interests. A partnership&#146;s right to refuse to recognize transfers is not a limitation unless the right is actually exercised.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Treasury Regulations provide several safe harbors which a partnership may use in order to avoid its interests being
considered as readily tradable on a secondary market or the substantial equivalent thereof. One of the safe harbors which is available to us is the so-called &#147;2.0% safe harbor,&#148; which provides that interests in a partnership are not
readily tradable on a secondary market or the substantial equivalent thereof if the sum of the percentage interests in partnership capital or profits that are sold or otherwise transferred during a tax year does not exceed 2.0% of the total
interests in capital or profits. Another safe harbor applies to transfers through a &#147;qualified matching service&#148; that do not exceed 10.0% of the total interests in capital and profits, reduced in certain cases by the percentage transferred
outside the qualified matching service. The Treasury Regulations impose significant limitations on qualified matching services including the requirements that a sale cannot be closed any sooner than 45 days after the interest was first listed for
sale and that interest may not be listed for more than 120 days before being delisted for a period of at least 60 days. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Whether our shares will become readily tradable on a secondary market or the substantial equivalent thereof cannot be predicted with
certainty. We have no control over an independent third person establishing a secondary market in our shares. However, our operating agreement requires that an investor obtain the consent of our manager prior to any transfer of shares. The manager
intends to exercise its discretion by withholding its consent to transfers that do not fall within the parameters of any safe harbor. If we comply with the safe-harbor provisions of the Treasury Regulations, Baker Donelson is of the opinion that we
will not be considered a publicly traded partnership. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If we were treated for federal income tax purposes as a corporation in
any year, (i)&nbsp;we would be required to pay federal income taxes upon our taxable income; (ii)&nbsp;state and local income taxes could be imposed on us; (iii)&nbsp;our losses would not be reportable by the investors on their personal income tax
returns; (iv)&nbsp;any distributions would be taxable to an investor as (a)&nbsp;ordinary income to the extent of current or accumulated earnings and profits, and (b)&nbsp;gain from the sale of the investor&#146;s shares to the extent any
distribution exceeded the earnings and profits and the tax basis of the shares; and (v)&nbsp;distributions would be classified as portfolio income which would not be available to offset passive activity losses. See &#147;&#150;Limitation on
Deduction of Losses&#150;Passive Loss Limitation.&#148; Also, a change in status from a partnership to a corporation could result in taxable income to an investor. The amount of taxable income would equal his share of our liabilities over the
adjusted basis of his shares. Any of the foregoing would substantially reduce the effective yield on an investment in shares. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">75 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following discussion is based upon the assumption that we will be classified as a
partnership for federal income tax purposes. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_46"></A>Allocations of Profits and Losses </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In general, a partner&#146;s distributive share of partnership income, gain, deduction or loss will be determined in accordance with the
partnership agreement. However, if the allocations do not have substantial economic effect, the partner&#146;s distributive share will be determined in accordance with the partners&#146; interests in the partnership. Therefore, your share of any
item of our income, gain, loss, deductions, or credits is determined by our operating agreement unless the allocations do not have substantial economic effect. See &#147;Summary of Our Operating Agreement.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">An allocation has economic effect under the Treasury Regulations if: (i)&nbsp;each partner&#146;s share of partnership items is reflected
by an increase or decrease in the partner&#146;s capital account; (ii)&nbsp;liquidation proceeds are distributed in accordance with capital account balances; and (iii)&nbsp;any partner with a capital account deficit following the distribution of
liquidation proceeds is required to restore such deficit. Even if a partner is not required to restore a deficit in his capital account, the allocations will still have economic effect if the partnership agreement contains a qualified income offset
provision. A qualified income offset provision requires allocation of income or gain to a partner when a partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulations
Section&nbsp;1.704-1(b)(2)(ii)(d)(4)-(6)&nbsp;in an amount and manner sufficient to eliminate such deficit balance as quickly as possible. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our operating agreement prohibits losses from being allocated to an investor that would cause a deficit capital account in excess of the investor&#146;s share of our minimum gain. Nonrecourse deductions
will be allocated in the same manner as operating profits and losses. The operating agreement contains a minimum gain chargeback provision and a qualified income offset provision that are intended to comply with the provisions of the Treasury
Regulations. The operating agreement provides that capital accounts will be maintained in accordance with the provisions of the Treasury Regulations. The operating agreement also provides that proceeds on liquidation will be distributed in
accordance with positive capital account balances. Therefore, the allocations included in our operating agreement should meet the economic effect test and should not be significantly modified if challenged by the IRS. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The economic effect of a partnership&#146;s allocations also must be &#147;substantial.&#148; Under Section&nbsp;1.704-1(b)(2)(iii) of
the Treasury Regulations, the economic effect of an allocation is substantial if there is a reasonable possibility that the allocation will affect substantially the dollar amounts to be received by the partners from the partnership, independent of
tax consequences. Notwithstanding the foregoing, the economic effect is not substantial if, at the time that the allocation becomes part of the partnership agreement, (i)&nbsp;the after-tax economic consequences of at least one partner may, in
present value terms, be enhanced compared to such consequences if the allocation were not contained in the partnership agreement, and (ii)&nbsp;there is a strong likelihood that the after-tax economic consequences of no partner will, in present
value terms, be substantially diminished compared to such consequences if the allocations were not contained in the partnership agreement. The Treasury Regulations include a presumption that the book value of depreciable partnership property is
presumed to be its fair market value, and adjustments to book value will be presumed to be matched by corresponding changes in fair market value. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The economic effect of our allocations also must be &#147;substantial.&#148; It cannot be determined whether the economic effect of the allocations in our operating agreement is substantial because the
tax situations of the investors are unknown; however, because the allocations do not vary from year to year or investor to investor, we believe that the allocations will be deemed to be substantial. However, no assurance can be given that the IRS
will not disagree. If the IRS were successful in challenging our allocations, the investors&#146; share of tax loss could decrease or their share of taxable income could increase. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">76 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our income and loss for the year will be allocated among our members to take into account
the varying interests of our members during the year using any method permissible under Code Section&nbsp;706 that our manager may select. If any members hold their shares for less than the entire year, they will be allocated income and loss using
the method as selected by our manager that reflects the part-year ownership as is permissible under Code Section&nbsp;706. For purposes of allocating income or loss among our members, we will treat our operations as occurring ratably over each
fiscal year. In other words, we will assume that income and loss are spread evenly over the fiscal year. Thus, if some members are admitted after others, those members admitted later may receive a smaller portion of each item of our net profits and
net losses than the members who were admitted earlier. Nevertheless, those members still will be obligated to make the same capital contributions to us for their interests as the members who were admitted previously. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Income Recognition </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We
prepare our tax returns using the accrual method of accounting. Under the accrual method, we will include in income items such as interest and rentals as and when earned by us, whether or not received. Thus, we may be required to recognize income
sooner than would be the case under the cash receipts and disbursements method of accounting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Some leases may provide for
varying rental payments over the years. Code Section&nbsp;467 can require a lessor to take those rental payments into income as if the rent accrued at a constant level rate. This provision applies to any rental agreement for the use of tangible
property that involves total payments in excess of $250,000 and either provides for increasing (or decreasing) rental payments, or provides that some rent for the use of property in a calendar year is payable after the close of the following
calendar year, including certain sale-leaseback transactions and certain long-term leases. Certain of our leases may provide for varying rental payments. If so, Section&nbsp;467 requires us to accrue the rental payments on those leases at a constant
level rate. This could result in investors receiving increased allocations of taxable income or reduced allocations of loss in earlier years, without any increase in distributions until subsequent years. An additional consequence could be a
conversion of a portion of our rental income from any such lease to interest income. Rental income generally constitutes passive income. Interest income generally constitutes portfolio income. See &#147;&#150;Limitation on Deduction of Losses
&#150;Passive Loss Limitation.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_47"></A>Taxation of Investors </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As long as we are treated as a partnership for federal income tax purposes, we will not be subject to any federal income taxes.
Nonetheless, we will file federal partnership information tax returns for each calendar year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Each investor will be required
to report on his own federal income tax return his share of our items of income, gain, loss, deduction or credit. An investor will be subject to tax on his distributive share of our income whether or not any distribution is made to him. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Initially, an investor&#146;s tax basis for his shares will be equal to the price paid for the shares. Each investor will increase the
tax basis for his shares by (i)&nbsp;his allocable share of our taxable income, and (ii)&nbsp;any increase in his share of our liabilities, and will decrease the tax basis for his shares by: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">his allocable share of our tax loss; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our expenditures that are not deductible in computing our taxable income and not properly chargeable to a capital account;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the amount of any distributions; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">any reduction in his share of our liabilities. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">If the amount of a cash distribution to an investor for any year exceeds the investor&#146;s share of our taxable income for the year, the excess will constitute a return of capital. A return of capital
is applied first to reduce the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">77 </FONT></P>



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tax basis of the investor&#146;s shares. Any amounts in excess of the tax basis generally will be taxable as a gain from the sale of a capital asset if the shares are held by you as a capital
asset. Any reduction in your share of non-recourse liabilities, such as might arise as a result of a reduction of your percentage interest in us upon issuance of additional shares to new or existing members, will be treated as a distribution of cash
to you. A portion of any distribution in excess of your tax basis will, however, be recharacterized as ordinary income in the same percentage that ordinary income would be realized upon a sale by us of all our assets, for example, because of
depreciation recapture. In addition, to the extent that a distribution would cause the amount you are considered to have &#147;at risk&#148; with respect to equipment placed in service in a given year to become negative, you will have to include the
amount in your gross income up to the amount of losses previously taken with respect to the equipment. Further, a non-pro rata distribution of money or property, such as might arise as a result of a reduction of your share of our liabilities upon
the admission of additional members, may result in ordinary income to you, regardless of your tax basis in your shares, if the distribution reduces your share of our &#147;unrealized receivables,&#148; including depreciation recapture, or
substantially appreciated &#147;inventory items.&#148; These terms are defined in Code Section&nbsp;751 and are known as &#147;Section 751 assets.&#148; To that extent, you will be treated as having been distributed your proportionate share of our
Section&nbsp;751 assets and having exchanged those assets with us in return for the non-pro rata portion of the actual distribution made to you. This last deemed exchange generally will result in your realization of ordinary income under
Section&nbsp;751(b) of the Code. That ordinary income will equal the excess of (i)&nbsp;the non-pro rata portion of that distribution over (ii)&nbsp;your tax basis for your share of Section&nbsp;751 assets deemed relinquished in the exchange.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Participation in our Distribution Reinvestment Plan </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Although the tax treatment of participation in corporate dividend reinvestment plans is well-established, the treatment of participation in our DRP is less clear because we expect to be treated as a
partnership for federal income tax purposes, rather than as a corporation. See &#147;&#150;Classification as a Partnership.&#148; If the general principles applicable to corporate dividend reinvestment plans were to apply to us, members
participating in our DRP would be treated as having received the applicable distributions and immediately contributed that amount to us in exchange for additional shares. We intend to maintain our records consistent with that approach in that we
will show a distribution to members participating in our DRP and an associated purchase by them of shares from us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the IRS
were to treat participation in our DRP in a similar fashion, a member who participates in our DRP will be treated as receiving all cash distributions reinvested in shares registered in his name pursuant to our DRP. Those distributions would be
treated for tax proposes like other cash distributions. See &#147;&#150;Taxation of Investors.&#148; Generally speaking, the Treasury Regulations provide that when a partner makes an additional cash contribution to a partnership, the holding period
of that partner&#146;s partnership interest becomes a &#147;split&#148; holding period, with the portion of the interest attributable to the additional contribution (determined by the ratio of the amount of the additional cash contributions to the
fair market value of the partnership interest after contribution) treated as having a holding period that begins the day following the date of the additional contribution and the balance of the partnership interest retaining the holding period that
it had prior to the contribution. A special rule under the Treasury Regulations also provides, however, that in determining the holding period of a partnership interest upon a sale of the interest, cash distributions received during the one-year
period prior to the sale may be applied to reduce the cash contributions made during that period, on a last-in-first-out basis. Application of this special rule may, in many instances, prevent a member from having a short-term holding period with
respect to a portion of his interest in us at the time of sale of all or part or his interest if the only shares acquired by the member during the one-year period preceding the sale were acquired through our DRP. For the tax treatment of any gain on
such a sale, see &#147;&#150;Disposition of Shares.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">While, as noted above, the Treasury Regulations generally provide
that an interest in a partnership, or an entity treated as a partnership, such as us, is a single interest, with the result that a member&#146;s interest in us can, subject to the special rule mentioned in the preceding paragraph, have a
&#147;split&#148; holding period upon the acquisition of additional shares, there is an exception to this rule that permits a partner in a publicly-traded </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">78 </FONT></P>



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partnership to treat separately-identifiable shares therein that were acquired at different times to have different holding periods. We do not expect that exception will apply to a member&#146;s
interest in us because we do not expect to be a publicly-traded partnership. See &#147;&#150;Classification as a Partnership.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">If a member elects to participate in our DRP, the deemed distribution and corresponding investment will not, in and of themselves, have any net effect on the basis of the member&#146;s interest in us.
This is the case even though the member&#146;s basis would be reduced by the amount of the distribution, because the member&#146;s basis would be increased by an equal amount as a result of the corresponding reinvestment. That member&#146;s share of
our non-recourse liabilities &#150; which are also included in the member&#146;s basis&#150;could increase relative to those members who do not participate in our DRP, however, because those members&#146; relative ownership interest in us would be
deemed to have decreased. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">For further information regarding the tax consequences of participation in our DRP, you should
consult your own tax advisor. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_48"></A>Limitation on Deduction of Losses </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">There are limitations on an investor&#146;s ability to deduct his distributive share of our losses, including the following:
(i)&nbsp;losses will be limited to the extent of the investor&#146;s tax basis in his shares; (ii)&nbsp;losses will be limited to the amounts for which the investor is deemed at risk; and (iii)&nbsp;losses will be limited to the investor&#146;s
income from passive activities. Deduction of losses attributable to activities not engaged in for profit are also limited. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Tax Basis. </I>Subject to the other limitations discussed below, an investor may deduct his share of our tax loss to the extent of the
tax basis for his shares. Our losses which exceed his tax basis may be carried over indefinitely and, subject to the limitations discussed below, deducted in any year to the extent his tax basis is increased above zero. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>At Risk Rules</I>. Under Code Section&nbsp;465, the amount of losses which may be claimed by an individual or a closely-held
corporation from activities such as equipment leasing cannot exceed the amount which the investor has at risk with respect to those activities. A closely-held corporation is a corporation more than 50.0% of which is owned directly or indirectly by
not more than five individuals. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The amount at risk is generally equal to the sum of money invested in the activity. An
investor&#146;s at risk amount will be decreased by his share of our losses and distributions. An investor&#146;s at risk amount will be increased by his share of our income. An investor will not be considered at risk with respect to nonrecourse
indebtedness. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The total amount of money paid by each investor for his shares will be considered at risk. Indebtedness
incurred in connection with equipment leasing activities is not expected to be considered at risk. Accordingly, you will only be able to deduct your share of our losses under the at risk rules in an amount equal to the purchase price of your shares,
as adjusted for our income, losses and distributions. Any losses in excess of your at risk amount will be treated as a deduction in succeeding taxable years, again subject to the at risk limitations. An investor must recapture previously allowed
losses if the investor&#146;s amount at risk at the end of the year is reduced below zero. Even if you can claim our losses under the at risk rules, you are still subject to the other limits on deduction discussed herein. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under the Code, we will be permitted to aggregate our equipment leasing activities only with respect to equipment placed in service
during the same taxable year. This could limit an investor&#146;s deduction for losses with respect to certain equipment, even though the investor must recognize income with respect to other equipment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Passive Loss Limitation</I>. Code Section&nbsp;469 limits the amount of losses that individuals and certain other taxpayers may claim
from an activity in which the taxpayer does not materially participate. Under this limitation, </FONT></P>
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net losses from a passive activity may only be deducted against net income from passive activities. Passive activity losses may not be used to offset compensation income or other forms of active
income. Also, passive activity losses may not be used to offset interest, dividends and other forms of portfolio income. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">To
the extent that we enter into true leases for federal income tax purposes, our equipment leasing activities will be passive activities. See &#147;&#150;Tax Status of Leases.&#148; Our losses from passive activities are considered to be passive
activity losses. Most investors will only be able to deduct their share of our passive activity losses to the extent they have passive income from other sources. Any excess passive activity losses will be suspended and carried forward indefinitely.
Suspended passive activity losses may be used to offset passive activity income in future years. Suspended passive activity losses also may be claimed in full against all types of income if an investor disposes of his interest in the activity in a
fully taxable transaction to an unrelated person. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may have portfolio income to the extent that our investments constitute
finance leases or secured loans, rather than true leases, or we receive interest on our funds held pending acquisition of equipment. Portfolio income is not considered as income from a passive activity. Therefore, investors may be required to
recognize taxable portfolio income and pay tax thereon in years in which they also are allocated passive losses which cannot be used by them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The passive loss limitation is applied after the at risk limitation. Thus, if a loss is disallowed under the at risk rules for a particular year, it will not again be disallowed by the passive loss
limitation for that year. Rather, for the year in which the investor becomes at risk in the activity, the suspended at risk loss will become subject to the passive loss limitation. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Tax Status of Leases </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Whether a specific lease is categorized as a lease
rather than as a sale or a financing for federal income tax purposes involves a factual determination. Accordingly, no assurance can be given that our leases of equipment will be treated as leases by the IRS. If they are treated as sales or
financings rather than leases, we and the investors would not be entitled to cost recovery deductions with respect to those leases. On the other hand, a portion of the lease rental payments would be deemed to constitute amortization of the financing
or sales proceeds which would not be taxable. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We do not intend to apply to the IRS for a ruling that any leases of equipment
will be treated as leases for federal income tax purposes. Because the terms of the leases have not been determined, no determination has been made about whether our leases will be true leases for federal income tax purposes. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cost Recovery Deductions </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>MACRS. </I>Under the Modified Accelerated Cost Recovery System, or MACRS, the cost of depreciable personal property placed in service
in the U.S. after 1986 may be recovered using specified recovery methods over specified recovery periods. Under MACRS the cost of most recovery property is recovered using the 200% declining balance method. For some recovery property, the 150%
declining balance method is utilized. The recovery periods generally range from 3 to 20 years. Depreciation may not be available for equipment in which we invest indirectly, through total lease return swaps, participation agreements and other
similar transactions. Depreciation will generally not be available for equipment we own subject to full-payout leases or leases considered to be &#147;capital leases&#148; according to IRS guidelines. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The amount by which cost recovery deductions using the 200% declining balance method exceeds the amount that would have been allowed
using the 150% declining balance method will be an item of tax preference or purposes of the alternative minimum tax imposed by Code Section&nbsp;55. See &#147;Alternative Minimum Tax.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will allocate all or part of the acquisition fees, which are fees paid to our manager in connection with the selection and purchase of
equipment, to the cost basis of the equipment. We cannot assure you that the IRS will </FONT></P>
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agree that cost recovery deductions calculated on a cost basis that includes acquisition fees are properly allowable. The IRS might assert that the acquisition fees are attributable to items
other than the equipment or are not subject to cost recovery at all. If the IRS were successful in making that claim, the cost recovery deductions available to us would be reduced accordingly, which would have the effect of either increasing our
income or reducing our losses. Because the determination of this issue depends on the magnitude and type of services performed for the acquisitions fees, which is presently undeterminable and may vary for each piece of equipment acquired by us, our
counsel is unable to render an opinion about whether our cost recovery deductions would be upheld if challenged by the IRS. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Recapture. </I>All cost recovery deductions claimed by our investors will be subject to recapture at ordinary income rates upon the
disposition of the equipment or the investor&#146;s shares. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Limitations on Cost Recovery Deduction </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Property Used Predominately Outside the U.S. </I>We may own and lease equipment that is used predominately outside the U.S. The cost of
this equipment must be written off for federal income tax purposes using the straight-line method of depreciation over a period corresponding to the equipment&#146;s class life, which generally is longer than the recovery periods permitted for other
property. If the equipment does not have a class life, a 12-year period must be used. Even though it will be used predominately outside the U.S., the following types of property, among others, will be eligible for the normal MACRS: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. aircraft registered in the U.S. that are operated to and from the U.S.; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. some railroad rolling stock used within and without the U.S.; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. vessels documented under the laws of the U.S. that are operated in the foreign or domestic commerce of the U.S.; and
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. containers owned by a U.S. taxpayer that are used in the transportation of property to and from the U.S.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">To the extent that our equipment is subject to the depreciation rules for property used predominantly outside the U.S., a
member may have to recognize taxable income in greater amounts, or incur less loss, in the early stages of our existence than otherwise would have been the case because the depreciation period is generally longer for property used predominantly
outside the U.S. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Tax-exempt Leasing</I>. We may lease equipment to tax-exempt entities. Property leased to tax-exempt
entities, called tax-exempt use property, must be written off for federal income tax purposes using the straight-line method of depreciation. The depreciation period is the longer of </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the equipment&#146;s class life, which generally is longer than the normal MACRS recovery periods permitted for property not leased to tax-exempt
entities; or </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">125% of the term of the lease, including all options to renew as well as some successor leases for the equipment. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The definition of a tax-exempt entity includes governmental bodies and tax-exempt governmental instrumentalities, tax-exempt
organizations, some foreign persons and entities and some international organizations. The term also generally includes organizations that were tax-exempt at any time during the five year period before the organization first uses the property
involved. Foreign persons or entities are treated as tax-exempt entities with respect to property if less than 50.0% of the income derived from the leased property is subject to U.S. income tax. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">81 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The tax-exempt use property does not include: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. property that is used predominantly by a tax-exempt entity in an unrelated trade or business, if the entity pays
unrelated business income tax on the income from the trade or business; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. property leased to a tax-exempt
entity under a short-term lease, meaning a lease that has a term of either less than one year, or less than 30.0% of the property&#146;s class life as long as that is less than three years; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. certain high-technology equipment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In addition, under Code Section&nbsp;470, losses attributable to the leasing of tax-exempt use property (including property described in items 2 and 3 of the immediately preceding paragraph) cannot be
deducted currently, but must be deferred until there is income derived from the property or when the interest therein is completely disposed of, unless the lease complies with certain requirements. Because these facts depend upon leases that will be
acquired or entered into in the future, no conclusion can be expressed now regarding the possible application of Code Section&nbsp;470 to leases of property to tax-exempt entities. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If any property is owned by a partnership, or other entity taxed as a partnership such as us, that has both a tax-exempt entity and a
non-exempt person or entity as partners, the tax-exempt entity&#146;s proportionate share of the property is treated as tax-exempt use property for purposes of determining the rate of depreciation thereof, and for purposes of the rules under Code
Section&nbsp;470 discussed above, unless specific requirements relating to the allocation of profits and losses among the partners are met. These requirements will not be met by us. However, the fact that we have exempt organizations as members
should not affect the depreciation deductions for two reasons. First, because substantially all of our taxable income will be treated as unrelated business taxable income in the hands of employee benefit plans and other tax-exempt investors, the
property should not constitute tax-exempt property with respect to those tax-exempt investors. See &#147;&#150;Investment by Employee Benefit Plans and Other Tax-Exempt Organizations.&#148; Therefore, we do not anticipate that the depreciation and
Code Section&nbsp;470 loss limitations applicable to tax-exempt use property will be material as they relate to equipment owned by us and not leased to or used by a tax-exempt entity. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In summary, to the extent that our equipment is subject to the depreciation rules for tax-exempt use property, the longer depreciation
period for that equipment will cause the annual depreciation deduction for the property to be smaller, but continue longer, than otherwise would have been the case under MACRS, thereby increasing net income, or reducing net loss, with respect to
that property in our early years, and reducing net income, or increasing net loss, in our later years. Further, to the extent that losses attributable to tax-exempt use property are suspended under Section&nbsp;470, taxable net income is greater, or
net loss is less, during the period of suspension. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Deductibility of Management Fees </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will pay asset management fees for services to be rendered by the manager. We intend to deduct those fees as ordinary and necessary
business expenses incurred in the operation of a trade or business. The characterization by us of those expenses may be subject to close scrutiny by the IRS to determine whether they represent expenses that are currently deductible, rather than
capital expenditures or expenditures which cannot provide any present or future tax benefit. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The manager will take the
position that the fee paid to it is incurred in connection with the operation of a &#147;trade or business.&#148; Since there are factual and legal questions involved in determining the proper characterization, valuation, timing and current
deductibility of the foregoing items, there can be no assurance that the IRS will not attempt to challenge those deductions or their availability to the investors, and that the challenge, if made, will not be successful. For example, the IRS could
take the position that the fee paid to the manager was not incurred in connection with a &#147;trade or business&#148; and thus, when allocated as an expense to the investors will be subject to the 2.0% floor imposed on miscellaneous itemized
deductions of individuals. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Tax Liabilities in Later Years </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">It is possible that after some years of operation an investor&#146;s tax liabilities may exceed cash distributions to him in corresponding
years. This situation would typically arise if our nondeductible loan amortization payments on our equipment exceeded our depreciation deductions. It is possible in this situation that an investor&#146;s tax liabilities could exceed cash
distributions. If so, the excess would be a nondeductible out-of-pocket expense to an investor. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Sales or Exchanges of Our Property
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On the disposition of leased equipment, we will realize gain in an amount equal to the proceeds received minus the basis
in the leased equipment. As a result of cost recovery deductions, most equipment is expected to have a zero basis. Disposition proceeds include the amount of any debt encumbering the property. Consequently, the amount of tax payable by an investor
as a result of the disposition may exceed his share of the cash proceeds from the disposition. In the event of a foreclosure of a debt on our property, we would realize gain equal to the excess of the indebtedness over our adjusted tax basis in the
property. In that event the investors would realize taxable income although they may not receive any cash distributions as a result of the foreclosure. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Before any gain that we may realize on the sale of an asset can be treated as capital gain, the asset must be either a capital asset or Section&nbsp;1231 property in our hands. Inventory or other property
held by a taxpayer primarily for sale to clients in the ordinary course of its business are not included in these types of property. We expect to acquire and dispose of many assets many times throughout our term and will sell or otherwise dispose of
equipment, leases and secured loans. We may purchase some equipment for resale rather than lease. Whether we can treat any gains on these sales as capital gains will depend on the facts and circumstances at the time of each sale. Because this is an
inherently factual determination which depends, in part, on how many sales we make, no conclusion can be made about whether the gains on sales will be capital gains. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Even if the assets sold were Section&nbsp;1231 property in our hands, since equipment is tangible personal property when it is sold, all cost recovery or depreciation deductions we previously have taken
with respect to the equipment sold will be recaptured as ordinary income to the extent we realize gain on the sale. Recapture means that we must treat as ordinary income a portion or all of any gain we may realize from the sale of our equipment that
otherwise would be treated under the Code as capital gain. Recapture cannot be avoided by holding the equipment for any specified period of time. In addition, if we sell assets on an installment basis, we must recognize all deprecation and cost
recovery recapture, if any, as ordinary income at the time of sale, even though we receive the payments in later taxable years. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Also, certain gains and losses are grouped together under the Code to determine their tax treatment. For example, gain on the sale or
exchange of Section&nbsp;1231 property, that is, equipment used in a trade or business and held for more than one year, is added to gain from certain compulsory or involuntary conversions of similar property. If these gains exceed the losses from
the sales, exchanges, and conversions of similar equipment, the excess gains will be taxed as capital gains, subject to the general rules of recapture of cost recovery and depreciation deductions as ordinary income, as described above, and a special
recapture rule described below. If the losses exceed the gains, however, the excess losses will be treated as ordinary losses. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under a special recapture rule, any net gain will be treated as ordinary income rather than as capital gain if we have non-recaptured net
losses from the five preceding taxable years. Based on our intended activities and the recapture rules discussed above, you should anticipate that substantially all, if not all, of any gain we realize on the sale or other taxable disposition of our
equipment, but not necessarily any finance leases and secured loans sold during the maturity period, will be treated as ordinary income for income tax purposes, rather than capital gain. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">83 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Disposition of Shares </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The amount of gain which an investor will realize upon the disposition of his shares, including a redemption or repurchase of the shares by us, will equal the excess of the amount realized by the investor
over the investor&#146;s tax basis in the shares. Conversely, the amount of loss which an investor will realize upon the disposition of his shares will equal the excess of the investor&#146;s tax basis over the amount realized for the shares. The
amount realized on the sale of the shares will include an amount equal to the investor&#146;s share of any of our liabilities. As a result, a disposition of shares may result in a tax liability in excess of the cash proceeds. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This gain or loss generally will be capital gain or loss if the shares are a capital asset in the hands of the investor. However, any
gain realized on the disposition of shares by an investor which are attributable to unrealized receivables or inventory items will be treated as ordinary income and taxed at ordinary income rates. Unrealized receivables would include the
investor&#146;s share of our previous equipment cost recovery deductions. An investor must recognize the cost recovery recapture in the year of disposition, regardless of the amount of proceeds received in the year of disposition. Based on our
intended activities and the substantial amount of recapture likely to be attributable to each investor, you should anticipate that substantially all, if not all, of the gain on the disposition of your shares will be treated as ordinary income for
income tax purposes, rather than capital gain. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We anticipate that funds used to redeem or repurchase shares will be payable
out of cash flow that otherwise would be available for distribution to all members or for reinvestment in additional equipment. Accordingly, while any redemption or repurchase of shares would decrease the aggregate number of shares outstanding, and
thereby proportionally increase each remaining member&#146;s distributive share of our income, gain, loss and deductions, it may also reduce the total amount of cash available for investment or reinvestment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Although proposed regulations under Code Section&nbsp;707, dealing with so-called &#147;disguised sales&#148; of partnership interests
have been withdrawn, you should be aware that Treasury continues to study the subject of disguised sales and may again adopt regulations which, could cause contributions by members, including reinvestment by members of distributions received from us
pursuant to the DRP, to be combined with a redemption or repurchase by us of another member&#146;s shares and treated as if the two transactions were a sale by the redeemed member of shares to the contributing member. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You must notify us of any proposed sale or exchange of your shares before we will treat the sale or exchange as effective. See
&#147;&#150;Classification as a Partnership.&#148; Assuming that the sale or exchange is effectuated, we are required to inform the IRS, the buyer and you of the fair market value of the allocable share of our unrealized receivables and appreciated
inventory attributable to the shares you sold or exchanged, which must be treated as ordinary income by you as discussed above. Our written report to you and the buyer must be made by January&nbsp;31 following the calendar year of the sale. If you
fail to timely notify us of the sale or other transfer of your shares, the IRS will penalize you $50 per sale. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Our Liquidation
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our operating agreement provides that our assets will be sold upon our liquidation. The sale proceeds will be distributed
pursuant to the terms of the operating agreement. Each investor will realize his share of the gain or loss on the sale of our assets. See &#147;&#150;Sales or Exchanges of Our Property.&#148; In addition, each investor will recognize gain or loss
measured by the difference between the cash he receives in liquidation and the adjusted tax basis of his shares. The cash an investor receives will include the cash constructively received as a result of relief of liabilities. Gain or loss
recognized generally will constitute capital gain or loss. However, gain attributable to the recapture of equipment cost recovery deductions will be taxable as ordinary income. See &#147;&#150;Sales or Exchanges of Our Property.&#148; It is
anticipated that all or substantially all of any gains will be attributable to those deductions and taxed as ordinary income. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">84 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Elections </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Code Section&nbsp;754 permits an entity such as us to elect to adjust the tax basis of our property: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">upon the transfer of shares by sale or exchange or on the death of a holder, and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">upon the distribution of property by the entity to a holder. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This is known as a Section&nbsp;754 election. If we were to make a Section&nbsp;754 election, then transferees of shares would be
treated, for the purpose of depreciation and gain, as though they had acquired a direct interest in our assets. Furthermore, if we have substantial built-in losses, we would be required to make the foregoing adjustments. In the case of transfers of
shares by sale or exchange or upon death, substantiality is judged based on a dollar amount ($250,000) at the entity level. Considering our size, even a small percentage loss in value may trigger a mandatory adjustment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A Section&nbsp;754 election is complex. A Section&nbsp;754 election increases the expense of tax accounting. As a result, the manager
does not intend to cause us to make a Section&nbsp;754 election, unless required to do so. If not, then an investor may have greater difficulty in selling his shares because the transferee of the shares would obtain no current tax benefits from
purchasing the shares to the extent the purchase price exceeds your allocable share of our basis in our assets. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Code
includes other elections, and we may make other elections for federal tax reporting purposes which could result in various items of income, gain, loss, deduction and credit being treated differently for tax purposes than for accounting purposes.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investment by Employee Benefit Plans and Other Tax-Exempt Organizations </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Employee benefit plans, such as qualified pension and profit sharing plans, Keogh plans and IRAs are generally exempt from federal income
tax. However, the amount of any unrelated business taxable income, or UBTI, less directly connected allowable deductions, that exceeds a specific deduction of $1,000 in any taxable year is subject to an unrelated business tax. Other charitable and
tax-exempt organizations in addition to those listed above may also be subject to tax. UBTI includes gross income derived from a business not substantially related to the purpose which forms the basis for the entity&#146;s tax-exempt status, less
the deductions allowed which are directly connected with the carrying on of the business. UBTI generally excludes dividends, interest and gains from the sale of property and all deductions directly connected with that income unless they are derived
from debt-financed property. We will be engaged primarily in the business of equipment leasing and any taxable income from leasing equipment will constitute UBTI regardless of whether the equipment is debt-financed. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">A portion of the gain from the sale of equipment which is debt-financed property also will be included in the unrelated business income
of a tax-exempt entity. Debt-financed property is defined as any property which is held to produce income and with respect to which there is an acquisition indebtedness at any time during the taxable year. Acquisition indebtedness is defined as the
unpaid amount of (i)&nbsp;indebtedness incurred by the organization in acquiring the property, (ii)&nbsp;indebtedness incurred before the acquisition of the property if the indebtedness would not have been incurred but for the acquisition, and
(iii)&nbsp;indebtedness incurred after the acquisition of the property if the indebtedness would not have been incurred but for the acquisition and the incurrence of indebtedness was reasonably foreseeable at the time of the acquisition. Given our
intent to debt finance our equipment acquisitions, a portion of the gain from the sale of equipment by us will be UBTI. A tax-exempt entity will be required to include as UBTI an amount that is equal to its share of the total gross income from the
property multiplied by the average acquisition indebtedness associated with the property for the taxable year divided by the average adjusted basis for the property for the taxable year. Accordingly, prospective investors that are tax-exempt
entities should consult their tax advisors concerning the possible federal, state and local income and other tax consequences resulting from an investment in us. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">85 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Notwithstanding the preceding, a charitable remainder trust that recognizes UBTI will be
subject to an excise tax equal to 100% of that income. Any tax due should be paid directly from the tax-exempt entity. Payment of the tax by the beneficiary could have other adverse tax consequences. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">All tax-exempt entities are urged to obtain the advice of a qualified tax advisor on the effect of an investment in shares. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Alternative Minimum Tax </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">With limited exceptions, taxpayers must pay an alternative minimum tax if it exceeds the taxpayer&#146;s regular federal income tax for
the year. For noncorporate taxpayers, the alternative minimum tax is imposed on alternative minimum taxable income, or AMTI, that is above an exemption amount. AMTI generally is taxable income, plus or minus various adjustments, plus tax preference
items. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Some of the principal adjustments to taxable income that are used to determine AMTI are summarized below. </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Depreciation deductions may not exceed deductions computed using the 150% declining balance method, unless the property qualifies for bonus
depreciation as discussed below. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Miscellaneous itemized deductions are not allowed. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Medical expenses are deductible only to the extent they exceed 10.0% of adjusted gross income. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">State and local income, property and general sales taxes are not deductible unless they are deductible in computing adjusted gross income.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Interest deductions are restricted. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The standard deduction and personal exemptions are not allowed. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Only some types of operating losses are deductible. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Different rules under the Code apply to incentive stock options that may require earlier recognition of income. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The principal partnership tax items that may have an impact on your AMTI as a result of investing in us are (1)&nbsp;cost recovery
deductions on the portion of our equipment leased to others under operating leases, which generally will be computed for regular federal income tax purposes using the 200% declining balance method, but will be computed for alternative minimum tax
purposes using the 150% declining balance method, except any equipment eligible for bonus depreciation, and (2)&nbsp;deductions relating to our interest expense on borrowings. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Because the impact of the alternative minimum tax is dependent upon each investor&#146;s particular tax situation, each prospective investor is urged to consult his own tax adviser as to the effect an
investment in us will have on the calculation of his alternative minimum tax liability. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Tax Returns and Tax Information </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will use the accrual method of accounting. We will adopt the calendar year as our tax year. Our operating agreement requires us to
provide tax information to the investors within 75 days after the close of each tax year. Some investors may be required to file their tax returns on or before March&nbsp;15. If so, they may have to obtain an extension to file. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Each investor must file his tax return either consistently with the information provided on our informational return or in a manner which
notifies the IRS of any inconsistency. Otherwise, the IRS could automatically assess and collect the tax, if any, attributable to the inconsistent treatment. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">86 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>An investor will be required to inform us of the sale or exchange of his shares within
the earlier of 30 days of the transaction or January&nbsp;15 of the calendar year following the calendar year in which the transaction occurs. </B>We will be required to inform the IRS of each transfer. Our failure or the failure of an investor or
to file these notices may result in substantial penalties. We also must inform both the seller and the buyer of shares of the proportionate interest of the transferred shares in our unrealized receivables and inventory items. This notification must
be made prior to February&nbsp;1 of the calendar year following the calendar year in which the transaction occurs. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Audit of Tax Returns
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The IRS could audit our tax information returns. Any audit could result in the audit of an investor&#146;s tax return. An
audit of an investor&#146;s return could result in adjustments to items related to us as well as items not related to us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
Code treats a partnership as a separate entity for purposes of audit, settlement and judicial review. Thus, the IRS may audit and make a single determination of the propriety of a partnership&#146;s treatment of partnership tax items at the
partnership level. In general, a partnership&#146;s tax matters partner represents the partnership and its partners in the event of an audit of the partnership&#146;s tax returns. The manager is our tax matters partner. All partners are nevertheless
entitled to participate in an audit and each partner may enter into a settlement agreement on his own behalf with the IRS. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If
the IRS proposes any adjustments to the tax returns filed by us or an investor, substantial legal and accounting expenses and deficiency interest and penalties may be incurred. We will not bear any expense that may be incurred by an investor in
connection with the adjustments or audit of the investor&#146;s returns. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager has the authority to conduct, on our
behalf and on behalf of our investors, all examinations by tax authorities relating to us at our expense. A tax controversy could result in substantial legal and accounting expenses being charged to us, even if the outcome is favorable. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Tax Shelters and Reportable Transactions </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Material advisers&#148; to &#147;reportable transactions&#148; are required to file an information return for each reportable transaction. A &#147;material advisor&#148; is a person who
(i)&nbsp;provides material aid, assistance or advice in organizing, managing, promoting, selling, implementing, carrying out or insuring a reportable transaction, and (ii)&nbsp;derives gross income in excess of $250,000 or another amount as
prescribed by the Treasury Department. In addition, taxpayers must report on their individual returns or statements any information with respect to a reportable transaction which is required under Section&nbsp;6011 of the Code. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under current Treasury Regulations, a &#147;reportable transaction&#148; is one which satisfies any of the following: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) A listed transaction, which is a transaction that is the same as or substantially similar to a type of transaction that the IRS has
identified by notice, regulation or other form of published guidance, to be a tax avoidance transaction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) A confidential
transaction, which is one that is offered by an advisor who places a limitation on disclosure by the taxpayer of the tax treatment or tax structure of the transaction and the limitation on disclosure protects the confidentiality of the
advisor&#146;s tax strategies. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) A transaction with contractual protection, which is one for which the taxpayer or a
related party has the right to a full or partial refund of fees if all or part of the intended tax consequences from the transaction are not sustained. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) A loss transaction, which is any transaction resulting in the taxpayer claiming a loss under Code Section&nbsp;165 of at least (1)&nbsp;$10,000,000 in any single year or $20,000,000 in any combination
of years for corporations; (2)&nbsp;$10,000,000 in any single year or $20,000,000 in any combination of years for partnerships that </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">87 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
have only corporations as partners, or $2,000,000 in any single year or $4,000,000 in any combination of years for all other partnerships; (3)&nbsp;$2,000,000 in any single year or $4,000,000 in
any combination of years for individuals, S corporations, or trusts; or (4)&nbsp;$50,000 in any single year for individuals or trusts if the loss arises from foreign currency transactions. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) A transaction of interest, which is a transaction that is the same or substantially similar to the transactions that the IRS has
identified as such by notice, regulation or other form of published guidance. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The IRS has identified as listed transactions
two lease arrangements, which are lease stripping transactions and purported sale and leaseback transactions. The manager does not expect that any of its leasing transactions will be the same as or similar to the listed transactions. We may enter
into sale and leaseback transactions but we intend to avoid the features that would cause our sale and leaseback transactions to be the same or similar to the listed transactions. However, a leasing transaction could be a reportable transaction if
the loss thresholds described above in subsection (d)&nbsp;are exceeded. If so, the transaction would be subject to the disclosure requirements above. The manager will monitor this situation. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Penalties and Interest </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The penalty for a taxpayer&#146;s failure to
disclose a reportable transaction is $10,000 for a natural person and $50,000 for other persons, provided that for reportable transactions which are listed transactions, the foregoing amounts are increased to $100,000 and $200,000, respectively.
These amounts are payable whether or not the transaction results in an underpayment of tax. In addition to any monetary penalty for failure to report, taxpayers subject to the reporting requirements of the Securities and Exchange Act of 1934, as
amended, or the Exchange Act, would be required to disclose in those reports the failure to report the reportable transaction, as well as any understatement penalty or gross valuation misstatement penalty, as described below, that result from the
failure to report the listed or reportable transaction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Additionally, Section&nbsp;6662 of the Code provides for uniform
penalties at a flat rate of 20.0% in cases of negligence, substantial underpayments of tax and substantial valuation overstatements. In particular, a penalty may be imposed on any &#147;substantial understatement of tax liability&#148; equal to
20.0% of the amount of the underpayment of tax attributable to the understatement. For an individual, substantial understatement occurs when the understated tax liability exceeds the lesser of 10.0% of the correct tax required to be shown on the
return or $5,000. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If we are found to be a &#147;tax shelter&#148; for purposes of Section&nbsp;6662, the penalty under
Section&nbsp;6662 would be operative unless, as required by Code Section&nbsp;6664, there was reasonable cause for taking the position relating to the understatement and we acted in good faith with respect to that position. For this purpose, a
&#147;tax shelter&#148; includes a partnership if a significant purpose of the partnership is the avoidance or evasion of federal income tax. The manager does not believe that our principal purpose is or will be the avoidance or evasion of federal
income tax. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">More stringent reasonable cause and good faith rules of new Section&nbsp;6662A apply in the case of an
understatement resulting from an inadequately disclosed listed transaction or reportable transaction. Taxpayers who do not adequately disclose the transaction would not be eligible for the reasonable cause exception and would be subject to a strict
liability penalty equal to 30.0% of the understatement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Interest rates for an underpayment of tax are set quarterly at the
federal short-term rate plus 3.0%, compounded daily, except that the interest rate is set at the federal short-term rate plus 5.0% in the case of certain underpayments of tax by a C corporation. The Code provides that interest will be imposed on
penalties from the due date of the return (without regard to extensions) which gave rise to the penalty. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">88 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Deductions for Organization and Offering Expenses; Start-Up Costs </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The costs of our organization and the sale of our shares, as well as other start-up costs, generally may not be deducted in the year they
are incurred; rather, they must be capitalized. Organization expenses and start-up costs may be deducted on a limited basis, up to $5,000, in the year incurred. However, this $5,000 amount is reduced, but not below zero, by the amount by which the
cumulative cost of the expenditures exceeds $50,000. The remainder of the start-up costs can be amortized over a period of 180 months. If we are liquidated before the end of the 180 month amortization period, the unamortized balance may be deducted
as a loss under Section&nbsp;165. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Syndication expenses, which are the costs incurred to promote or effect the sale of our
shares, are non-deductible, must reduce members&#146; capital accounts when incurred and give rise to a tax offset, if at all, only upon our liquidation and then, in most cases, only as a capital loss. Syndication expenses include brokerage fees
such as the dealer manager fee and the selling commissions provided for in our operating agreement; registration and filing fees with the SEC and each state in which our shares are sold; our legal fees for securities advice and advice concerning the
adequacy of tax disclosures in the offering materials; accounting fees for the preparation of information to be included in the offering materials; printing and reproduction costs; and other selling or promotional expenses. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will endeavor to treat our organization, start-up and syndication costs in accordance with the foregoing rules. There is uncertainty,
however, about the distinction between trade or business expenses that may be currently deducted and organization start-up and syndication costs that must be capitalized or deferred. Because of this uncertainty, the IRS could challenge the current
deduction of some of our expenses on the grounds that the expenses are not deductible in the year incurred. Under our operating agreement, brokerage fees and underwriting commissions are also allocated to those members with respect to whose purchase
of shares those commissions and fees were paid. Other syndication expenses will be allocated, to the extent possible, in equal amounts per share. If equality is not possible, our manager may make compensating allocations of items of income or loss
to achieve the same effect on capital accounts. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Foreign Tax Considerations for U.S. Investors </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Rental income and interest received by us from sources in foreign countries could be subject to withholding and/or income taxes imposed by
those countries. In addition, gains on the sale of equipment may also be subject to taxes in foreign countries where we sell equipment. Tax treaties between some countries and the U.S. may reduce or eliminate those taxes. Our foreign activities,
however, may require you to file tax returns in foreign countries. We cannot predict what tax rate our income will be subject to in other countries, because we do not know the extent of our business in foreign countries. We intend, whenever
possible, to pay any foreign taxes and file any foreign tax returns at the entity level and thereby reduce the compliance burden on you. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">We will inform you of your proportionate share of any foreign income and the foreign taxes, if any, paid by us. You will then be required to include these items on your tax return. At your option, you
generally will be entitled to claim either a credit, subject to the limitations discussed below, or, if you itemize your deductions, a deduction, subject to the limitations generally applicable to deductions, for your share of foreign taxes in
computing your federal income taxes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Generally, a credit for foreign taxes may not exceed the federal tax liability
attributable to your total foreign-source taxable income. Several limits apply to the foreign tax credit. For example, the credit is applied separately to different types of foreign-source income, including foreign-source passive income like
interest income, and special limits also apply to income from the sale of capital assets. Because of these limits, you may be unable to claim credit for the full amount of your proportionate share of the foreign taxes attributable to our income. In
addition, any foreign losses generated by us could reduce the tax credits available to you from foreign-source income unrelated to us. The foregoing is only a general description of the foreign tax credit under current law. Since the availability of
a credit or deduction depends on your particular circumstances, we advise you to consult your own tax advisor. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">89 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Self-Employment Tax </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">You should be aware that under Code Section&nbsp;1402(a)(13), limited partners in limited partnerships are generally not subject to self-employment tax with respect to their distributive share of income
or loss of a limited partnership, other than with respect to guaranteed payments to that partner for services actually rendered to or on behalf of the partnership. However, the Code section does not deal expressly with respect to the treatment of
members of limited liability companies for purposes of the self-employment tax. In 1997, the IRS promulgated proposed regulations to define when a partner in a partnership or member of a limited liability company should be considered to be a limited
partner for purposes of this exclusion from the self-employment tax. Under those proposed regulations, members who do not have personal liability for limited liability company debts, the authority under the laws of the state of formation to contract
on behalf of the limited liability company, or otherwise do not participate in its activities would not be subject to the self-employment tax. However, the proposed regulations are not yet effective and Congress, in response to complaints from the
business community in 1997, imposed a one-year moratorium on their effective date. We expect to follow the rules set forth in these proposed regulations and intend to take the position that a member&#146;s distributive share of our income is not
self-employment income on the K-1 distributed to such member unless the member has personal liability for our debts, has the authority to contract on our behalf, or otherwise participates in the conduct of our business activities. However, it is
possible that the IRS could take a contrary position. Interest holders should consult with their tax advisors. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Interest Expense
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In general, interest paid in connection with investment activities is deductible only against investment income. Interest
paid in connection with investments in passive activities, such as an investment in our shares, may only be deducted in accordance with the rules for losses derived from passive activities, except to the extent allocable to portfolio income. See
&#147;&#150;Limitations on Deduction of Losses.&#148; Interest paid by us likely will be treated as passive activity interest, as would any interest expense you incur on money borrowed to purchase shares. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>State and Local Taxes </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition to the federal income tax considerations described above, prospective investors should consider applicable state and local
taxes which may be imposed by various jurisdictions. Investors may be subject to state tax rules which are less favorable than federal tax rules. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">An investor&#146;s distributive share of our income, gain or loss will be required to be included in determining his reportable income for state or local tax purposes in the jurisdiction in which he is a
resident. Moreover, other states in which we may do business require nonresident investors to file tax returns in those states and pay tax on the pro rata share of our income derived from those states. Any tax losses associated with an investment in
us from operations in one state may not be available to offset income from other sources taxable in a different state. To the extent that you pay tax to a state by virtue of our operations within that state, you may be entitled to a deduction or
credit against tax owed to your state of residence with respect to the same income. Payment of state and local taxes will constitute a deduction for federal income tax purposes, assuming that you itemize deductions. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Several states have adopted a withholding tax procedure in order to facilitate the collection of taxes from nonresident and foreign
investors. Any amounts withheld would be deemed to be a distribution to the investor. The deemed distribution would decrease the amount of any actual subsequent distribution. Investors may be allowed a credit for the amount withheld against any
income tax imposed by their state of residency. We cannot estimate the percentage of our income that will be from states which have adopted those withholding tax procedures. Therefore, we cannot estimate the required withholding tax, if any.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We intend to pay state taxes and file state tax returns at the entity level whenever possible. We may, however, undertake
business activities in states that do not permit state taxes to be paid at the entity level or only permit the state taxes to be paid at the entity level with respect to nonresidents of that state. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">90 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Estate or inheritance taxes might be payable in any of the jurisdictions outlined above upon
the death of an investor. We advise you to consult your own tax advisor to determine the effect of state and local taxes, including gift and death taxes as well as income taxes, which may be payable in connection with this investment. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_49"></A>Need for Independent Advice </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>The foregoing summary is not intended as a substitute for careful tax planning. The income tax consequences associated with an investment in us are complex and certain of them will not be the same for
all taxpayers. Accordingly, each prospective purchaser of shares is strongly urged to consult his own tax advisors with specific reference to his own tax situation. </B></FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_50"></A>ERISA CONSIDERATIONS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In considering an
investment in us of a portion of the assets of a qualified pension or profit-sharing plan, fiduciaries should consider whether the investment: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is in accordance with the documents and instruments governing the plan; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">satisfies the diversification requirements of ERISA, if applicable; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">will result in unrelated business taxable income to the plan; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">provides sufficient liquidity and is otherwise prudent. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Prohibited Transactions Under ERISA and the Code </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;4975 of the
Code (which applies to all qualified plans and IRAs) and Section&nbsp;406 of the Employee Retirement Income Security Act of 1974, as amended, or ERISA (which does not apply to IRAs or to certain qualified plans that are not subject to ERISA&#146;s
fiduciary rules) prohibit qualified plans and IRAs from engaging in certain transactions involving &#147;plan assets&#148; with parties that are &#147;disqualified persons&#148; under the Code. &#147;Disqualified persons&#148; include fiduciaries of
the qualified plan or IRA, officers, directors, shareholders and other owners of the company sponsoring the qualified plan and natural persons and legal entities sharing certain family or ownership relationships with other &#147;disqualified
persons.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Prohibited transactions&#148; include any direct or indirect transfer or use of a qualified plan&#146;s
or IRA&#146;s assets to or for the benefit of a disqualified person, any act by a fiduciary that involves the use of a Qualified Plan&#146;s or IRA&#146;s assets in the fiduciary&#146;s individual interest or for the fiduciary&#146;s own account,
and any receipt by a fiduciary of consideration for his or her own personal account from any party dealing with a qualified plan or IRA. Under ERISA, a disqualified person that engages in a prohibited transaction will be required to disgorge any
profits made in connection with the transaction and will be required to compensate any qualified plan that was a party to the prohibited transaction for any losses sustained by the qualified plan. Section&nbsp;4975 of the Code imposes excise taxes
on a disqualified person that engages in a prohibited transaction with a qualified plan or IRA. Section&nbsp;408(e)(2) of the Code provides that an IRA will cease to be an IRA and will be treated as having immediately distributed all of its assets,
if it engages in a prohibited transaction. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Plan Assets </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">If our assets were determined under ERISA or the Code to be &#147;plan assets&#148; of qualified plans and/or IRAs holding shares, fiduciaries of those qualified plans and IRAs might under certain
circumstances be subject to liability for actions taken by the manager or its affiliates and certain of the transactions described in this prospectus in which we might engage, including certain transactions with our affiliates, might constitute
prohibited transactions under the Code and ERISA with respect to those qualified plans and IRAs, even if their acquisition of shares did not originally constitute a prohibited transaction. Moreover, qualified plans (other than IRAs) might be deemed
to have delegated their fiduciary responsibility to the manager in violation of ERISA. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In some circumstances ERISA and the
Code apply a &#147;look-through&#148; rule under which the assets of an entity in which a qualified plan or IRA has invested may constitute &#147;plan assets&#148; and the manager of the entity becomes
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">91 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
a fiduciary to the qualified plan or IRA. The manager of Macquarie Equipment Leasing Fund Two, LLC is Macquarie Asset Management Inc. ERISA and the Code, however, exempt from the look-through
principle investments in certain publicly registered securities and in certain operating companies, as well as investments in entities not having significant equity participation by benefit plan investors. Under the Department of Labor&#146;s
current regulations regarding what constitutes the assets of a qualified plan or IRA in the context of investment securities, such as our shares, undivided interests in the underlying assets of a collective investment entity such as us will not be
treated as plan assets of qualified plan or IRA investors if either: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our shares are publicly offered; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">less than 25% of any class of our shares are owned by qualified plans, IRAs and certain other employee benefit plans; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we are an operating company. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">United States Department of Labor regulations (&#147;DOL Regulations&#148;) define a publicly-offered security as a security that is &#147;widely held,&#148; &#147;freely transferable,&#148; and either
(a)&nbsp;be part of a class of securities registered under Section&nbsp;12(b) or 12(g) of the Securities Exchange Act of 1934 or (b)&nbsp;sold as part of a public offering pursuant to an effective registration statement under the Securities Act of
1933 and registered under the Securities Exchange Act of 1934 within 120 days after the end of our fiscal year during which our offering occurred. Our shares are being sold as part of an offering registered under the Securities Act of 1933, and we
intend to register our shares under the Securities Exchange Act of 1934. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The DOL Regulations provide that a security is
&#147;widely held&#148; only if it is part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another. However, a class of securities will not fail to be &#147;widely held&#148; solely because the
number of independent investors falls below 100 subsequent to the initial public offering as a result of events beyond the issuer&#146;s control. We anticipate our shares will be &#147;widely held.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The DOL Regulations provide that whether a security is &#147;freely transferable&#148; is a factual question to be determined on the
basis of all the relevant facts and circumstances. The DOL Regulations further provide that when a security is part of an offering in which the minimum investment is $10,000 or less, as is the case with this offering, certain restrictions ordinarily
will not affect, alone or in combination, the finding that such securities are freely transferable. We believe that the restrictions imposed under our operating agreement on the transfer of our shares are limited to restrictions on transfer
generally permitted under the DOL Regulations and are not likely to result in the failure of the common stock to be &#147;freely transferable.&#148; See &#147;Summary of Our Operating Agreement&#151;Transfer of Our Shares and Substitute
Members.&#148; The DOL Regulations only establish a presumption in favor of a finding of free transferability and, therefore, no assurance can be given that the DOL, the U.S. Treasury Department or a court would not reach a contrary conclusion with
respect to our shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Assuming that our shares are &#147;widely held&#148; and &#147;freely transferable,&#148; we believe
that our shares are publicly-offered securities for purposes of the DOL Regulations and that our assets would not be deemed to be &#147;plan assets&#148; of any Plan that invests in our shares. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Governmental plans and certain church plans (as defined in ERISA) are not subject to ERISA or the prohibited transaction provisions under
Section&nbsp;4975 of the Code. However, state laws or regulations governing the investment and management of the assets of such plans may contain fiduciary and prohibited transaction requirements similar to those under ERISA and the Code.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acceptance of a subscription on behalf of a Plan is in no respect a representation by us or any other Person that an
investment in our shares meets all relevant legal requirements with respect to investments by the Plan or that such investment is appropriate for the Plan. Any prospective investor that is a Plan should consult its own advisers with respect to the
provisions of ERISA, the Code and any governing state or other law that may apply with respect to an investment in our shares. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">92 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Other ERISA Considerations </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In addition to the above considerations in connection with the &#147;plan asset&#148; question, a fiduciary&#146;s decision to cause a qualified plan or IRA to acquire shares should involve, among other
factors, considerations that include whether: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the investment is in accordance with the documents and instruments governing the qualified plan or IRA, </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the purchase is prudent in light of the potential difficulties that may exist in liquidating shares, </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the investment will provide sufficient cash distributions in light of the qualified plan&#146;s likely required benefit payments,
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">after an acquisition of shares, the qualified plan&#146;s investments taken as a whole are sufficiently diversified so as to minimize the risk of large
losses, </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the investment is made solely in the interests of plan participants, and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the fair market value of shares will be sufficiently ascertainable, with sufficient frequency, to enable the qualified plan to value its assets on an
annual basis in accordance with the qualified plan&#146;s rules and policies. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Prospective qualified plan
investors should note that, with respect to the diversification of assets requirement, the legislative history of ERISA and a Department of Labor advisory opinion indicate that in determining whether the assets of a qualified plan that has invested
in an entity such as us are sufficiently diversified, it may be relevant to look through the qualified plan&#146;s interest in the entity to the underlying portfolio of assets owned by the entity, regardless of whether the entity&#146;s underlying
assets are treated as &#147;plan assets&#148; for the purpose of ERISA&#146;s and the Code&#146;s prohibited transaction and other fiduciary duty rules. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">93 </FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_51"></A>SUMMARY OF OUR OPERATING AGREEMENT </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As described elsewhere in this prospectus, prospective investors will be purchasing shares and, after the acceptance of their
subscription for shares and our receipt of the minimum offering amount, will be admitted to our fund as members in accordance with the terms of our operating agreement. The rights of our members, including their rights to profits, losses and cash
distributions from us, are set forth in our operating agreement, which is included in its entirety as Appendix A to this prospectus. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Each prospective member should read and become familiar with the operating agreement. The following statements supplement other statements in this prospectus concerning the operating agreement and
summarize provisions of the operating agreement which describe certain of the members&#146; rights, privileges, duties and responsibilities. The following summary describes all the material provisions of our operating agreement, though it is not
complete, and prospective investors are urged to read the operating agreement in its entirety before making a decision about an investment in us. </B></FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>General Provisions of Our Operating Agreement </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Organization. </I>We are
a Delaware limited liability company formed on January&nbsp;19, 2010. Our existence will terminate on December&nbsp;31, 2030, unless we are sooner dissolved. See &#147;&#150;Dissolution and Winding-Up.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Nature and Purpose</I>. We have been organized for the purposes of, among other things, acquiring, investing in, purchasing, owning, leasing, hiring,
renting, financing, selling, trading, transferring or otherwise disposing of equipment and any other type of direct or indirect interest in equipment and leases of all kinds and purchasing equity interests in equipment-owning entities or entities
owning direct or indirect interests in equipment and undertaking all activities incidental to or in connection with the foregoing purposes. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Members and Capital </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Contribution of Initial Member</I>. Our manager has contributed $2,000, in cash, as its capital contribution to us. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Contributions of Other Members</I>. With limited exceptions, each member must purchase a minimum of 500 shares at a purchase price, in
cash, of $10.00 per share. The amount paid by a member for his shares will constitute that member&#146;s capital contribution to us. A separate capital account will be established and maintained for each member. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Management </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Our
Manager&#146;s Powers. </I>Subject to the terms and conditions of the operating agreement, the manager, on behalf of our members, will have the sole and exclusive right and authority to manage and control our business and affairs. Our manager will
possess all rights and powers of a &#147;manager&#148; of a limited liability company as provided in the Delaware Act and otherwise by law. Our manager must provide the personnel and services as it may deem necessary or appropriate to conduct our
business activities and the day-to-day management of our assets. Under Delaware law, our manager has duties of due care and fair dealing in acting for us and handling our affairs. With some limitations, our manager may employ the services of any
person, including its affiliates, to assist in its managerial duties and may compensate all of those persons from our assets at rates that it deems fair and reasonable. Our manager will act as our tax matters partner and will have the power to
settle tax disputes with the IRS that would bind us and our members. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Limitations on Our Manager&#146;s Powers. </I>Our
manager may not take any action prohibited by our operating agreement or by the Delaware Act. Under our operating agreement, our manager may not: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Operate us in a manner which causes us to be deemed an &#147;investment company&#148; as that term is defined in the Investment Company Act of 1940, as
amended. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">94 </FONT></P>



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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Enter into contracts that would bind us after the expulsion, adjudication of bankruptcy or insolvency of a manager, or continue our business with our
assets after the occurrence of any of those events. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Alter our primary purpose without the consent of members holding a majority of our shares. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Engage in any transaction with us, or permit any of its affiliates to engage in a transaction with us, that would circumvent the provisions of our
operating agreement, or circumvent the restrictions in our operating agreement against our dealing with the manager and its affiliates, or that would make it impossible to carry on our ordinary business. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Confess a judgment against us in connection with any threatened or pending legal action. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Possess any of our equipment or assign our rights in specific equipment other than for our purposes. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Except in limited circumstances, commingle our funds with the funds of any other person. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Receive any rebates or give-ups or participate in any reciprocal business arrangement that would circumvent the provisions of our operating agreement,
or circumvent the restrictions therein against dealing with the manager and its affiliates. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Except for the dealer manager fee, the selling commissions or any other amounts permitted under the operating agreement, directly or indirectly pay or
award any commissions or other compensation to any person engaged by a potential investor for investment advice as an inducement to that advisor to advise the purchase of shares. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to incur any indebtedness wherein the lender would have or acquire any direct or indirect interest in our profits, capital or property other
than as a secured creditor or incur any indebtedness specifically for the purpose of funding distributions. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to exchange shares for property other than cash. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to make investments in other programs or joint ventures with non-affiliates unless the non-affiliates own and operate specific equipment.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to make investments in joint ventures with other programs sponsored by our manager unless the following conditions are met:
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the programs have substantially identical investment objectives; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager has determined that the investment is in our best interests and will not result in duplicate fees to the manager or its affiliates or
impair, abrogate or circumvent any provisions of the operating agreement; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the compensation payable to our manager arising from an investment in the joint venture is substantially identical in each program;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we must have a right of first refusal to buy if another program sponsored by our manager desires to sell equipment it holds in the joint venture;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our investment is on substantially the same terms and conditions as the investments made in the joint venture by other programs sponsored by our
manager; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the joint venture agreement does not authorize us to do anything with respect to the equipment that we, or our manager, could not do under the
provisions of the operating agreement; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the joint venture is entered into either for the purpose of effecting appropriate diversification of our investment portfolio or to purchase equipment
or other investments warehoused by our manager or our manager&#146;s affiliates on our behalf in accordance with our operating agreement; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the investment objectives of the joint venture are consistent with our investment objectives. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">95 </FONT></P>



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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to make investments in joint ventures with our manager&#146;s affiliates unless the following conditions are met:
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager has determined that the investment is in our best interests and will not result in duplicate fees to the manager or its affiliates or
impair, abrogate or circumvent any provisions of the operating agreement; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the joint venture agreement does not authorize us to do anything with respect to the equipment that we, or our manager, could not do under the
provisions of the operating agreement; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a majority of the directors of our manager&#146;s board of directors, including a majority of our manager&#146;s independent directors, have approved
the joint venture; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the investment objectives of the joint venture are consistent with our investment objectives. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Allow us to make loans to it or its affiliates. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Allow us to receive loans from our manager or our manager&#146;s affiliates, unless: </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">any interest, financing charges or fees payable by the us in connection with the loan shall not exceed amounts charged by unrelated lending
institutions for the same purpose and located in the same geographic area; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the term of the loan does not extend more than 12 months beyond the end of our operating period. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to acquire equipment or other investments from a program in which our manager has an interest. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to grant an exclusive right to our manager or its affiliate to sell equipment on our behalf. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cause us to purchase or lease equipment from or sell or lease equipment to our manager, except under a lease arrangement made at the outset and on
terms no more favorable to the manager than those offered to other persons. We may purchase equipment or other investments from our manager, our manager&#146;s affiliates or other programs managed by our manager which have been warehoused on our
behalf and where: </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the equipment or other investment was not purchased by our manager or our manager&#146;s affiliates from another of our manager&#146;s affiliates;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the equipment or other investment has been held on a temporary basis only; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager has determined that the purchase of the equipment or other investment is in our best interests; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the purchase price of the equipment or other investment is not more than the cost to our manager or our manager&#146;s affiliate;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the interest terms of any loans secured by the equipment or other investment are not different than at the time acquired by us;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">no other benefit arises out of the transaction to our manager apart from compensation otherwise permitted under our operating agreement; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">in the case of an acquisition from a program in which our manager has an interest, the acquisition is for the purpose of a joint venture with that
program which meets the joint venture requirements set forth above. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Our Manager&#146;s Right to Indemnification
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will indemnify the manager, its directors and officers and its affiliates other than the dealer manager out of our
assets for any liability, loss, cost and expense suffered by us arising out of the acts or omissions of our manager or its affiliates provided that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the manager or its affiliate made a determination in good faith that the action or inaction was in our best interests; </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">96 </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the manager or its affiliate was acting on behalf of or performing services for us; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the course of conduct did not constitute negligence or misconduct on the manager&#146;s part or that of its affiliate. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In the opinion of the SEC, indemnifying an entity for liabilities arising under the Securities Act of 1933, as amended, is contrary to
public policy and therefore unenforceable. If the manager asserts a claim against us for indemnification for those liabilities, other than for expenses incurred in a successful defense, under our operating agreement or otherwise, we will submit to a
court of competent jurisdiction the question of whether the indemnification is against public policy as expressed in the Securities Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In addition, we are not permitted to indemnify the manager or any of its affiliates, including the dealer manager, for any liability imposed by judgment, and costs associated therewith, including
attorneys&#146; fees arising out of a violation of federal or state securities laws associated with the offer and sale of shares. We may indemnify the manager and any of its affiliates for any settlements and related expenses of lawsuits alleging
federal or state securities laws violations and for expenses incurred in successfully defending those lawsuits if the following have occurred: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a court approves the settlement and finds that indemnification of the settlement and related costs should be made or a court approves indemnification
of litigation costs if a successful defense is made; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our manager or its affiliate seeking indemnification has advised the court regarding the current position of the SEC and any applicable state
securities&#146; administrator on the issue of indemnification for securities laws violations. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not
have to pay the cost of insurance that insures the manager or any affiliate for any liability for which the manager cannot be indemnified. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Limited Liability of Our Manager and Our Members </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Limited Liability of Our Members</I>. After the payment and acceptance of subscription funds for the shares purchased by a member, that member will have no further obligations to us. Except as provided
in the Delaware Act, the liability of each member in its capacity as a member will be limited to that member&#146;s capital contribution. You will have no personal liability for any of our obligations or liabilities. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Our Manager&#146;s Limited Liability. </I>Our manager will not be personally liable under any judgment of a court, or in any other
manner, for any of our debts, obligations or liabilities, whether that liability or obligation arises in contract, tort or otherwise, solely by reason of being the manager. Neither our manager nor any of its affiliates, directors or officers
performing services on our behalf and acting within the scope of the manager&#146;s authority will have any liability to us or to any member for any loss suffered by us or the member that arises out of any action or inaction of our manager or its
affiliates if: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the manager and its affiliates determined in good faith that the course of conduct or choice to take no action was in our best interest;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the manager and its affiliates were acting within the scope of authority on behalf of, or performing services for, us; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the course of conduct or inaction did not constitute negligence or misconduct of the manager or its affiliates. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Withdrawal of Our Manager </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Voluntary Withdrawal. </I>Our manager may voluntarily withdraw as our manager provided that the following conditions are met:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager provides 60 days&#146; advance written notice to each of our members. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">97 </FONT></P>



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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">We must receive an opinion of counsel that the withdrawal will not cause our termination or otherwise materially adversely affect our status for
federal income tax purposes. We do not intend to engage special counsel for this purpose. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A substitute manager must have been selected who: </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">has expressed a willingness to be admitted to our fund; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">has received the consent of our members; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">who meets the net worth requirements under the NASAA Guidelines. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager may also voluntarily withdraw as our manager (a)&nbsp;immediately upon the conclusion of our Liquidation Period; or
(b)&nbsp;upon 10 days advance written notice to you if our operating agreement is amended by members with a majority interest in our shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Involuntary Withdrawal</I>. Our manager will be deemed to have involuntarily withdrawn as manager upon its removal pursuant to the consent of a majority interest of our members or upon the occurrence
of any other event that constitutes an event of withdrawal under the Delaware Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Consequence of Withdrawal. </I>Upon
either a voluntary withdrawal or an involuntary withdrawal, our manager is entitled to receive the positive fair market value of its interest in our income, losses, distributions and capital; asset management fees payable prior to the effective date
of the withdrawal; and an amount equal to the difference between any amounts due and owing to the manager from us, including any deferred fees and any amounts due and owing to us from the manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If our manager withdraws, Macquarie Financial Holdings Limited may terminate our license to use the Macquarie name and logo. See
&#147;Management&#150;License Agreement.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Transfer of Our Shares and Substitute Members </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">You may assign your shares only in accordance with the transfer provisions of our operating agreement, discussed below. There will be no public market for
our shares and you may not be able to transfer our shares, even in the case of an emergency. We may agree to redeem your shares as described below. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Wells Fargo Bank will serve as our transfer agent. Our transfer agent will charge a fee per transfer request and this fee will be charged whether the transfer is completed or not. This cost will be
imposed on the transferor. Distributions accrued on transferred shares will accrue to the transferor until but not including the effective date of the transfer. From the effective date on, all distributions will accrue to the transferee. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Assignment and Substitute Members</I>. You may assign all or any portion of your shares to any person, provided that the assignment is
evidenced by a written agreement that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">sets forth the terms of the assignment; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">evidences the acceptance by the assignee of all of the terms and provisions of the operating agreement; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">includes a representation by you and your assignee that the assignment was made in accordance with all applicable laws and regulations, including state
securities laws; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is acceptable in form and substance to our manager. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Assignments may not be made: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to a minor or incompetent unless a guardian, custodian or conservator has been appointed to handle the affairs of the minor or incompetent;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to any person if, in the opinion of our counsel, the assignment would result in our termination, or termination of our status as a partnership for
federal income tax purposes; </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">98 </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to any person if the assignment would affect our existence or qualification as a limited liability company under Delaware law or the applicable laws of
any other jurisdiction in which we are conducting business; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to any person not permitted to be an assignee under applicable law, including, without limitation, applicable federal and state securities laws;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to any person if the assignment would result in the transfer of less than 500 shares, unless the assignment is of all of the shares owned by the
member; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">if the assignment would result in your retaining less than 500 shares, or if the assignee would not own at least 500 shares;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">if, in our manager&#146;s reasonable belief, the assignment might violate applicable law; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">if, in the determination of our manager, the assignment would not be in the best interests of us or our members; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">if the assignment would result in us being treated as an association taxable as a corporation or as a &#147;publicly traded partnership&#148; for
federal income tax purposes. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">An assignee will be admitted to our fund as a substitute member if our manager
determines that all of the conditions listed above have been met, and that the assignee has signed all necessary forms. A member who assigns all of his shares to an assignee that becomes a substitute member will cease to be a member and will no
longer have the rights and privileges of a member. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager has the right to refuse to recognize any attempt to transfer
assign shares in violation of the provisions of our operating agreement or applicable law and any attempts or transfers will be null and void. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Dissolution and Winding-Up </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Our Dissolution. </I>We will be dissolved upon the happening of any of the following events: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the withdrawal of our manager, unless a substitute manager has been admitted; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our voluntary dissolution by our manager with the consent of the majority interest of our members or by the consent of the majority interest of our
members without action by our manager; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the sale of all or substantially all of our investments; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">our operations cease to constitute legal activities under the Delaware Act or any other applicable law; or </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">any other event that causes our dissolution or winding-up under the Delaware Act to the extent not otherwise provided herein.
</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Our Liquidation</I>. Upon a dissolution event, our manager or the person acting as the liquidator will
liquidate our portfolio and other assets and the proceeds from the liquidation will be distributed to you and our other members after we pay our liquidation expenses and debts, including our manager&#146;s fees, in the order of priority set forth in
our operating agreement. Our manager or liquidator will then terminate our existence. Our manager or the liquidator will be compensated for its services during our liquidation. You are not guaranteed the return of, or a return on, your investment.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Fiscal Matters and Reports </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Books and Records. </I>Our manager will maintain the following books and records at our principal place of business: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a list, to be updated quarterly, of the name, address and telephone number and number of shares held by each of our members, which we refer to as the
membership list; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a copy of our certificate of formation and all amendments thereto; </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">99 </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">copies of our operating agreement and any amendments, as well as executed copies of any powers of attorney pursuant to which the operating agreement or
any amendment was executed; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">copies of our audited financial statements for the three most recently completed fiscal years, together with the report of our independent auditors
with respect thereto; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">copies of our federal, state and local income tax returns and reports, if any, for the three most recently completed fiscal years;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">records required by applicable tax authorities; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">investor suitability records for shares sold for a period of six years after the sale; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">complete and accurate financial books and records with respect to our business and affairs, kept on an accrual basis and prepared in accordance with
generally accepted accounting principles; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">other records that are required to be maintained pursuant to the Foreign Corrupt Practices Act of 1977, as amended. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our members will have the right to have a copy of the membership list mailed to them for an administrative fee, provided that the list is
not being requested for an improper purpose. A copy of the membership list will be mailed to the member within ten days of: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a proper request which certifies that the request is not for an improper purpose; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">receipt by the manager of a check for copying and mailing costs. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The copy of the membership list will be printed in alphabetical order, on white paper, and in a readily readable type size, which in no
event will be smaller than 10-point size. Members or their representatives may also inspect and copy our other books and records at our principal place of business upon reasonable notice during normal business hours and at the member&#146;s expense.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Reports to Members. </I></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><U>Quarterly Reports</U>. Within 45 days after the end of each of the first three quarters in each year, our manager will deliver to you the following written materials: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A report containing the same financial information as is contained in our quarterly report on Form 10-Q filed with the SEC.
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A detailed statement prepared by our manager setting forth the fees and other compensation and costs and expenses that were paid or reimbursed by us to
our manager and its affiliates during the fiscal quarter, identified and properly allocated as to type and amount. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Until all capital contributions have been invested or committed to investments and reserves, used to pay permitted front-end fees or returned to our
members, a report of all investments made during the fiscal quarter. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Quarterly Reports shall be delivered
to you electronically by way of our manager posting the Quarterly Reports to our website (www.macquarie.com/mami). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Annual
Reports</U>. Within 90 days after the end of each fiscal year, our manager will deliver to you the following written materials: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our financial statements for the fiscal year, including a balance sheet as of the end of the fiscal year, and related statements of operations, cash
flows and changes in members&#146; equity, accompanied by an auditor&#146;s report containing an opinion of our accountants. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">An analysis, prepared by our manager, of distributions made to you during the fiscal year, separately identifying the portion of those distributions
from: (i)&nbsp;cash from operations; (ii)&nbsp;cash from operations during a prior period which had been held as reserves; (iii)&nbsp;cash from sales; and (iv)&nbsp;capital contributions originally used to establish a reserve.
</FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">100
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A status report regarding each piece of equipment which individually represents at least 10.0% of the aggregate purchase price of our investments held
at the end of the fiscal year. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A breakdown of all fees and other compensation paid, and all costs and expenses reimbursed, to our manager and its affiliates by us during the fiscal
year, identified and properly allocated as to type and amount. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A per share estimated value of the shares and the method by which that estimated value was determined. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Until all capital contributions have been invested or committed to investments and reserves, used to pay permitted front-end fees or returned to our
members, a report of all investments made during the fiscal year. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Annual Reports shall be delivered to you
electronically by way of our manager posting the Annual Reports to our website (www.macquarie.com/mami). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><U>Tax Reports</U>.
Within 75 days after the end of each fiscal year, we will send you a Form K-1 setting forth your share of our income, gains, losses, deductions, and items thereof, and credits if any, for the fiscal year, or such other statement containing all
information necessary to enable you to prepare your income tax returns. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Reports to State Securities Laws
Administrators</I>. Our manager will submit to all state securities law administrators any information concerning us that the administrators require, including, but not limited to reports and statements required to be distributed to you. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Meetings and Voting Rights of Our Members </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Meetings. </I>In its sole discretion, our manager may call a meeting of our members at any time to consider any matter on which our members may vote, and our manager may submit any matter on which our
members may vote for action by consent in lieu of a meeting. If our Manager receives written requests for a meeting to consider any matter on which our members may vote from members holding 10.0% or more of our outstanding shares, our manager will
call a meeting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Voting Rights of Our Members</I>. Our members, acting with the consent of a majority interest of our
members, may take the following actions without the concurrence of our manager: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amend our operating agreement. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dissolve us. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Remove our manager and elect one or more substitute managers. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Approve or disapprove of the sale or a series of sales of all or substantially all of our assets. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager and its affiliates, in their capacity as members, will have the same voting rights as other members, except that the manager
and its affiliates are prohibited from voting on the removal of our manager as manager and the appointment of a successor manager. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Amendments </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>Amendment
by Our Manager Without the Consent of Our Members</I>. Our manager may, without the consent of our members, amend our operating agreement to effect any change for the benefit or protection of our members, including: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to add to the representations, duties or obligations of our manager or its affiliates or to surrender any right or power granted to our manager under
the operating agreement; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to cure any ambiguity, to correct or supplement any provision of our operating agreement, provided that no amendment will change the voting rights of
our members; </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">101
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to preserve our status as a &#147;partnership&#148; for federal income tax purposes or under the Delaware Act or any comparable law of any other state
in which we may be required to be qualified; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to delete or add any provision of or to our operating agreement required to be deleted or added by the staff of the SEC, by any other federal or state
regulatory body or other agency or by any administrator or similar official; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to permit the shares to fall within any exemption from the definition of &#147;plan assets&#148; contained in ERISA or the Code;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">if we are advised by counsel, our accountants or by the IRS that any allocations of income, gain, loss or deduction provided for in our operating
agreement are unlikely to be respected for federal income tax purposes, to amend the allocation provisions of this Agreement, in accordance with the advice of counsel, accountants or the IRS, to the minimum extent necessary to effect as nearly as
practicable the plan of allocations and distributions provided in the operating agreement; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to change our name or the location of our principal office. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>Amendment With the Consent of a Majority Interest of Our Members</I>. Our manager may propose to our members, in writing, any amendment to our operating agreement, provided that no amendment will
increase the liability of any member or adversely affect in a disproportionate manner any member&#146;s share of distributions of cash or allocations of profits or losses for tax purposes, or of any of our investment tax credit amounts, without in
each case the prior written consent of each member affected thereby. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Binding Effect of Our Operating Agreement </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In the subscription agreement, you agree to all the terms and provisions of our operating agreement. This is necessary because our manager
and every member are bound by all of the terms and provisions of that agreement, even though members do not actually sign our operating agreement. Your signature on the subscription agreement gives our manager the power of attorney to sign the
operating agreement on your behalf, which obligates you to be bound by each of the terms and provisions of our operating agreement. By becoming a party to our operating agreement through the power of attorney, you will have the right to enforce the
terms and provisions of our operating agreement against us and our manager, and we will have the right to enforce the terms and provisions of our operating agreement against you. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">102
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_52"></A>REDEMPTION OF SHARES </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We have the right, but not the obligation, to repurchase all or a portion of the shares of any member if that member becomes a
&#147;foreign partner&#148; under the Code, if it is our opinion that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the repurchase would not constitute a transaction on an established securities market or a secondary market; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the repurchase would not jeopardize our treatment as a partnership for federal income tax purposes; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">sufficient cash flow is available to provide the funds for the repurchase. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In addition, a member may request at any time that we redeem his shares. The member requesting redemption is under no obligation to hold
our shares for any period of time prior to making the request. Our manager may consent to a request for redemption in its sole discretion. If we receive requests to redeem more shares than there are funds available for redemption, our manager will
have sole discretion regarding the priority of granting any requests for redemption, including redemption requests from our manager and its affiliates. Where our manager receives requests for redemption, regardless of when each request is received,
it may, in its sole discretion, give priority: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">first, to hardship redemptions (e.g. requests arising from death, major medical expense, family emergency, disability, a material loss of family income
etc.); </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">second, to provide liquidity for IRAs or qualified plans to meet required distributions; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">third, to all other redemption requests. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The redemption price to be paid for your shares depends on the phase we are in when you make your request, as described below: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">during our offering period, the lesser of (i)&nbsp;$9.30 per share and (ii)&nbsp;$9.00 per share for shares purchased under our DRP, unless the
redemption is requested due to the verifiable death or total disability of the member, in which case the redemption price will be the lesser of (i)&nbsp;$10.00 per share and (ii)&nbsp;$9.00 per share for shares purchased under our DRP, in all cases
minus cash distributions and distributions used to purchase shares under our DRP; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">during our operating period, the lesser of (i)&nbsp;$9.50 per share and (ii)&nbsp;$9.00 per share for shares purchased under our DRP, plus a 5.0%
annual return for each full 12 month period of membership, minus cash distributions received and distributions used to purchase shares under our DRP; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">during our liquidation period, at a price per share equal to the net asset value per share as determined by our manager. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you wish to request redemption of your shares, you must send us a written request in a form and substance satisfactory to us. You may
withdraw a request for redemption at any time by providing notice in writing five business days prior to the end of the fiscal quarter. We will accept or deny redemption requests quarterly. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will not establish any specific reserves for the redemption of shares. Redemptions may be made from our operating income, general
reserves, additional member capital contributions or any other source not prohibited by our operating agreement. We will not repurchase, in the aggregate, in any calendar year, a number of shares exceeding 2.0% of the total interests in our capital
or profits. See &#147;Federal Income Tax Consequences&#150;Classification as a Partnership.&#148; If all of your shares are redeemed, you will cease to be a member and will no longer have the rights and privileges of a member. You are urged to seek
advice based on your particular circumstances from an independent tax advisor with respect to the tax consequences to you of redemption of your shares. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">103
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_53"></A>PLAN OF DISTRIBUTION </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_53a"></A>General </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Up to 20,000,000 shares will be offered on a &#147;best efforts&#148; basis by Macquarie Capital (USA) Inc., an affiliate of the manager, acting as dealer manager of this offering, and by other registered
broker-dealers that are members of FINRA, acting as selling dealers. It is anticipated that all shares will be sold by the selling dealers. However, shares may also be sold by the dealer manager and executive officers of the manager in those states
where those executive officers are licensed to sell shares or are exempt from the licensing requirements. Subscribers&#146; initial investment amount must be for at least 500 shares. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The offering is made on a minimum/maximum basis. We must receive a minimum of $1,200,000 in offering proceeds before we will admit
subscribers as members. Persons who subscribe for shares prior to the time that we admit members who purchased the minimum number of shares will deposit their funds in an escrow account held by Wells Fargo Bank. If the amount of proceeds raised in
the 12 months after the effective date of this prospectus are insufficient to constitute the minimum offering, all subscription funds deposited by the subscribers into the escrow account will be returned, together with any interest earned thereon
and without deduction for fees, commissions, or expenses, to those subscribers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The offering price of each share is $10.00,
subject to certain exceptions. Our manager and its affiliates and selling dealers who participate in this offering or any of their affiliates purchasing for their own account or their IRAs or qualified plans will pay $9.30 per share, which
represents the offering price less selling commissions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Investors who purchase shares directly from the executive officers of
the manager or purchase shares sold pursuant to the DRP will pay $9.00 per share, which represents the offering price, less selling commissions and the dealer manager fee. In addition, selling dealers may waive the selling commission in whole or in
part. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The offering will terminate 12 months after the effective date of this prospectus. However, our manager may extend the
offering for a further period of not more than an additional 12 months. Some states or jurisdictions may require renewal, requalification or other consents in order for us to continue this offering after the end of the first year. The offering may
be terminated by the manager at any time. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_54"></A>Compensation of the Dealer Manager and Selling Dealers
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>The Dealer Manager Fee </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Subject to certain exceptions described below, the dealer manager will receive a fee of $0.30 per share, equating to 3.0% of the gross offering proceeds for each share sold at $10.00 per share, by the
dealer manager or selling dealers. The dealer manager fee is paid on a non-accountable basis, meaning that it will not reimburse to us any unused portion of the dealer manager fee. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The dealer manager fee may be used to pay expenses which include: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">salaries and commissions of wholesaling personnel; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">expense reimbursements made to wholesaling personnel; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">reimbursements to selling dealers for bona fide training and education conferences and seminars. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The dealer manager is responsible for ensuring that all compensation arrangements comply with FINRA Rule 2310. The dealer manager expects
to attend bona fide seminars, national and regional conferences and other meetings sponsored by selling dealers, and pay compensation to the selling dealers for its attendance at those meetings, which may be paid from the dealer manager fee. The
dealer manager also has the right, but not the obligation, to use a portion of its dealer manager fee to provide the selling dealers with, or reimburse them for, permissible compensation under FINRA Rule 2310. A portion of the dealer manager fee may
be re-allowed to selling dealers to reimburse them for permissible marketing expenses. We will not pay the dealer manager fee for shares sold pursuant to the DRP. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">104
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Selling Commissions </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Subject to certain exceptions described below, we will pay a selling commission of $0.70 per share, equating to 7.0% of the gross offering proceeds for each share sold at $10.00 per share, by the dealer
manager or selling dealers. We do not expect the dealer manager to sell any of the shares offered. The offering price of each share is $10.00; however we will not pay selling commissions for shares sold: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to investors whose broker-dealer waives the selling commission, either in whole or in part; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to our manager or its affiliates; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to investors by registered investment advisors, affiliated with a selling dealer who did not charge a commission in connection with an investment in
the shares; and clients of registered investment advisors, who are paid a fee by their clients based on a percentage of assets under management; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">to broker-dealers participating in this offering or any of their associated persons purchasing for their own account or their IRAs or qualified plans;
or </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">pursuant to the DRP. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In addition, selling dealers that have a contractual arrangement with their clients for the payment of fees on terms that are inconsistent with the acceptance of selling commissions may elect not to
accept selling commissions for shares that they sell to those clients. In that event, the shares will be sold to the investor net of some or all of the selling commissions. The amount of proceeds to us will not be affected by eliminating selling
commissions payable in connection with sales to investors purchasing through registered investment advisers or bank trust departments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In connection with sales of 25,000 shares or more to a &#147;purchaser,&#148; as defined below, a participating selling dealer may agree in its sole discretion to reduce the amount of its selling
commission as a volume discount. This reduction will be credited to the purchaser by reducing the purchase price payable by the purchaser for each share, in effect increasing the number of shares being purchased. The following table illustrates the
various discounts available. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="39%"></TD>
<TD VALIGN="bottom" WIDTH="12%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="12%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="12%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="12%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Total Investment for a</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000;width:76pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Single Purchaser
<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(1)(2)</SUP></B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Purchase&nbsp;Price<BR>Per Share</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Selling&nbsp;Commission<BR>Per Share</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Dealer&nbsp;Manager&nbsp;Fee<BR>Per Share
<SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">(3)</SUP></B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Net&nbsp;Proceeds&nbsp;to&nbsp;Us<BR>Per Share</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">$5,000 &#150; $250,000</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.70</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">$250,001 &#150; $500,000</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.90</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.60</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">$500,001 &#150; $750,000</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.75</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.45</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">$750,001 &#150; $1,000,000</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.65</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.35</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">More than $1,000,000</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.55</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.25</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR></TABLE> <P STYLE="line-height:8px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Excludes DRP shares. </FONT></TD></TR></TABLE> <P STYLE="font-size:4px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">For purposes of the volume discounts, the term &#147;purchaser&#148; includes: </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">an individual, his and her spouse and their children under the age of 21 who purchase the shares for his, her or their own accounts;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a corporation, partnership, association, joint stock company, trust fund or any organized group of persons whether incorporated or not;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">an employees trust, pension, profit sharing or other employee benefit plan qualified under section 401(a) of the Code; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">all commingled trust funds maintained by a given bank. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">For all investments, the dealer manager may, in its sole discretion, waive all or a portion of the dealer manager fee. </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">105
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any reduction in the amount of selling commissions with respect to volume discounts will be
credited to the investor in the form of additional shares. Fractional shares will be issued and no selling commissions will be paid on any shares issued for a volume discount. For example an investor purchasing $600,000 will receive 61,538.462
shares at a purchase price per share of $9.75. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Due Diligence Expenses </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will reimburse the dealer manager and the selling dealers for bona fide accountable due diligence expenses up to a maximum of 0.5% of
the gross offering proceeds of the offering. Bona fide accountable due diligence expenses will be reimbursable only to the extent that they are presented in a detailed and itemized statement to the dealer manager or to us in the case of the dealer
manager&#146;s expenses. Those expenses may only include actual costs, including overhead, associated with the dealer manager&#146;s or selling dealers&#146; due diligence activities and may not include a profit margin. We estimate that bona fide
accountable due diligence expenses will be approximately 0.07% of the gross proceeds of the offering, however we may reimburse higher amounts up to a maximum of 0.5% of the gross offering proceeds of the offering. See &#147;Management
Compensation.&#148; </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Total Compensation to Dealer Manager and Selling Dealers </I></B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The table below shows the maximum amount of compensation that we may pay to the dealer manager and selling dealers in this offering.
Shares that may be sold pursuant to the DRP are excluded. Dealer manager fees and selling commissions are not payable on shares sold pursuant to the DRP. The table assumes that: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">all shares are sold by the dealer manager and/or selling dealers; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">we will reimburse for bona fide, detailed and itemized, accountable due diligence expenses up to a maximum of 0.5% of the gross proceeds of the
offering. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="72%"></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Amount</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Percentage&nbsp;of<BR>Gross<BR>Offering&nbsp;Proceeds</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dealer Manager Fee</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">6,000,000 </FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.0</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Selling Commissions</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">14,000,000&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.0</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Reimbursement for Detailed and Itemized Due Diligence Expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,000,000&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.5</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">TOTAL</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">21,000,000&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.5</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This offering will be made
in compliance with FINRA Rule 2310, and all compensation paid to selling dealers and wholesalers, regardless of the source, including the reimbursement of due diligence expenses through a reallocation of the dealer manager fee as a non-accountable
expense allowance and permissible non-cash compensation, will be limited to 10% of our gross offering proceeds. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total
organization and offering expenses, which include the dealer manager fee, selling commissions, due diligence reimbursements and the organization and offering expense allowance payable to our manager will not exceed 15.0% of the gross offering
proceeds. See &#147;Management Compensation.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The dealer manager and the selling dealers may be deemed to be
underwriters within the meaning of the Securities Act. Our agreement with the dealer manager provides that we will indemnify the dealer manager and its affiliates against certain liabilities, including liabilities under the federal securities laws.
Brokerage firms soliciting participations in this offering are required to retain investor suitability records obtained by them for not less than six years. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_54a"></A>Termination of Dealer Manager and Selling Dealer Agreements </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The dealer manager agreement will terminate upon completion or termination of the offering. We, our manager or the dealer manager may also terminate the dealer manager agreement at any time and for any
reason by giving at least 30 days prior written notice. The selling dealer agreements will terminate upon completion or </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">106
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
termination of the offering. The dealer manager or a selling dealer may also terminate a selling dealer agreement at any time and for any reason by giving at least 30 days prior written notice.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_54b"></A>Indemnification of Dealer Manager and Selling Dealers </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager has agreed to indemnify the dealer manager and the selling dealers against all losses, liabilities, claims, damages and
expenses incurred by any of them, including liabilities under the Securities Act, in connection with any untrue statement or alleged untrue statement of a material fact contained in this registration statement or in any prospectus, unless the untrue
statement or omission was made in reliance upon and in conformity with written information furnished to us by the dealer manager or any selling dealer. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_55"></A>Distribution Reinvestment Plan </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We are offering
an additional 1,555,556 shares under our DRP. When you subscribe for the minimum subscription of 500 shares or more, not including shares under the DRP, you may elect to participate in the DRP, which allows you to reinvest distributions made by us
during the offering period, by marking the applicable box in your subscription agreement. If you elect to participate in the DRP we will pay distributions, if any, during the offering period in the form of additional shares to the extent shares
remain available for purchase under the DRP. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You do not need to purchase a minimum number of shares under the DRP and we may
issue fractional shares at our discretion. Shares purchased under the DRP will be sold for $9.00 per share, which represents the offering price less the dealer manager fee and selling commissions. In addition, until the end of our DRP period,
members of Macquarie Equipment Leasing Fund, LLC may elect to invest all the distributions that they receive with respect to their investment in that fund in our shares issued under our DRP. You may withdraw from our DRP at any time by providing
written notice to Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17th Floor, Suite 1700, Boston MA, 02110. Your withdrawal from our DRP will not affect shares committed for purchase prior to the date of the withdrawal notice.
See &#147;Questions and Answers about Our Distribution Reinvestment Plan&#148; and Appendix E to this prospectus. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_56"></A>Subscription Process and Escrow Agreement </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Our manager will promptly accept or reject subscriptions for shares after it receives a prospective investor&#146;s subscription documents and subscription funds. A specimen copy of the subscription
agreement, including instructions for completing it for new investors, is included in this prospectus as Appendix C. A specimen copy of the subscription agreement for investors who have been admitted as members and who desire to make an additional
investment is included in this prospectus as Appendix D. Selling dealers have agreed to provide each investor with a final prospectus prior to an investor signing a subscription agreement. Subscribers should only invest in us after having our final
prospectus for at least five business days and only if they meet the investor suitability standards set forth in this prospectus. Each subscriber has the right to cancel his or her subscription within a period of five business days after receiving a
final prospectus. After that time, unless otherwise approved by our manager in its sole discretion, an investment in our shares is irrevocable and investors will have no right to revoke their subscriptions prior to us achieving our minimum offering
amount. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">It is the responsibility of our manager, the dealer manager and each person selling our shares on behalf of our
manager or dealer manager to make every reasonable effort to determine that the purchase of our shares is a suitable and appropriate investment for subscribers. In making this determination, our manager, the dealer manager and each person selling
our shares on behalf of our manager or dealer manager, will ascertain that each subscriber: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">meets the minimum income and net worth standards established for the Fund; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">can reasonably benefit from the Fund based on the subscriber&#146;s overall investment objectives and portfolio structure;
</FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">107
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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">is able to bear the economic risk of the investment based on the subscriber&#146;s overall financial situation; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">has apparent understanding of: </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the fundamental risk of the investment; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the risk that the subscriber may lose the entire investment; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the lack of liquidity of the shares; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the restrictions on transferability of the shares; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the background and qualifications of our manager; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the tax consequences of the investment. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Until we have received at least $1,200,000 in subscription proceeds, which may include the investment which will be made by our manager or its affiliates, the manager will place all funds that the dealer
manager receives from subscribers in an escrow account at Wells Fargo Bank at our expense. Investors who invest prior to our reaching the minimum offering amount will be admitted if their subscriptions are accepted upon the initial closing date,
which will be within 15 days after we receive and accept subscription proceeds of $1,200,000. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">After the initial closing date,
the escrow agent will release the escrow funds and, where state requirements do not require us to maintain additional funds in escrow, the escrow agreement will terminate. The manager anticipates holding weekly closings, if, in its discretion, the
number of subscribed shares is sufficient to do so. At each closing the manager will admit as members, effective as of the next business day, all subscribers whose subscriptions have been received and accepted by the manager and who are then
eligible to be admitted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We will return to you and our other investors, without interest, any of your net subscription funds
that we do not commit to investment or that are not required as reserves within the latter of 24 months after the beginning of this offering or 12 months after receipt by us. &#147;Net subscription funds&#148; means your original subscription amount
minus the organization and offering expense allowance and dealer manager fees, selling commissions and due diligence expenses paid on the sale of your shares. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_56a"></A>Automatic Investment Program </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Investors who
desire to purchase shares in this offering at regular intervals may be able to do so by electing to participate in the automatic investment program by completing an enrollment form that we will provide upon request. Only investors who have already
met the minimum purchase requirement may participate in the automatic investment program. The minimum periodic investment is $500 per month. We will pay dealer manager fees, selling commissions and organization and offering expenses in connection
with sales under the automatic investment program to the same extent that we pay those fees and commissions on shares sold outside of the automatic investment program. If you elect to participate in both the automatic investment program and our
distribution reinvestment plan, distributions earned from shares purchased pursuant to the automatic investment program will automatically be reinvested pursuant to the distribution reinvestment plan. For a discussion of the dividend reinvestment
plan, see &#147;Plan of Distribution&#151;Distribution Reinvestment Plan.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You will receive a confirmation of your
purchases under the automatic investment program on a quarterly basis. The confirmation will disclose the following information: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the amount invested for your account during the period; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the date of the investment; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the number and price of the shares purchased by you; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the total number of shares in your account. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">108
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You may terminate your participation in the automatic investment program at any time by
providing us with written notice. If you elect to participate in the automatic investment program, you must agree that if at any time you fail to meet the applicable investor suitability standards or cannot make the other investor representations or
warranties set forth in the then current prospectus or in the subscription agreement, you will promptly notify us in writing of that fact and your participation in the plan will terminate. See the &#147;Who May Invest&#148; section of this
prospectus (immediately following the cover page) and the form of subscription agreement attached hereto as Appendix D. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_56b">
</A>Shares by Assignment </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Persons holding shares by assignment from entities holding our shares for the purpose of
assigning all or a portion of such interests to subscribers, which we refer to as the &#147;Assignor,&#148; shall be expressly granted the same rights as if they were members except as prohibited by applicable law. The Assignor&#146;s management
shall have fiduciary responsibility for the safekeeping and use of all funds and assets of the assignees, whether or not in the Assignor management&#146;s possession or control, and the management of the Assignor shall not employ, or permit another
to employ such funds or assets in any manner except for the exclusive benefit of the assignees. Assignees shall not be permitted to contract away the fiduciary duty owed to the assignees by the Assignor&#146;s management under the common law of
agency. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">109
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_57"></A>SUPPLEMENTAL SALES MATERIAL </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We may use sales material in addition to and apart from this prospectus in connection with our offering of shares, although only when
preceded by or accompanied by this prospectus. This material may include information relating to this offering, our manager and its affiliates and brochures, articles and publications concerning equipment leasing. Certain jurisdictions may not
permit us to use this supplemental sales material. We will only use sales material that has been approved by appropriate regulatory bodies, if approval is required. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The sales material we intend to use are as follows: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A [&nbsp;&nbsp;&nbsp;&nbsp;] page color brochure prepared by the manager entitled &#147;[&nbsp;&nbsp;&nbsp;&nbsp;];&#148; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A single, double sided page entitled &#147;[&nbsp;&nbsp;&nbsp;&nbsp;];&#148; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A trifold color brochure entitled &#147;[&nbsp;&nbsp;&nbsp;&nbsp;];&#148; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">A powerpoint presentation entitled &#147;[&nbsp;&nbsp;&nbsp;&nbsp;].&#148; </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This offering is made only by means of this prospectus. Although the information contained in any supplemental sales material will not
conflict with any of the information contained in this prospectus, the sales material is not complete, and is not a part of this prospectus or the registration statement of which this prospectus is a part, or as incorporated by reference in this
prospectus. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_58"></A>LEGAL OPINIONS </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The legality of the shares has been passed upon and the statements under the caption &#147;Federal Income Tax Consequences&#148; as they
relate to federal income tax matters have been reviewed and passed upon by Baker, Donelson, Bearman, Caldwell&nbsp;&amp; Berkowitz, a Professional Corporation. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_59"></A>EXPERTS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The consolidated balance sheet of
Macquarie Asset Management Inc. and Subsidiary as of March&nbsp;31, 2010 included in this prospectus has been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The balance sheet of Macquarie Equipment Leasing Fund Two, LLC
as of January 19, 2011 included in this prospectus has been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and
accounting. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">110
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_60"></A>FORWARD-LOOKING STATEMENTS </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This prospectus contains forward-looking statements concerning our objectives, plans, intentions, strategies, expectations and
predictions concerning our future investment activities, results of operations and other future events or conditions based on views and opinions of our manager. For this purpose, any statements contained herein that are not of historical fact may be
deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as &#147;believes,&#148; &#147;may,&#148; &#147;will,&#148; &#147;could,&#148; &#147;intends,&#148; &#147;anticipates,&#148; &#147;estimates,&#148;
&#147;expects&#148; or &#147;might,&#148; or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">It is important to note that actual results or activities or actual events or conditions could differ materially from those estimated or anticipated in the forward-looking statements, due to a variety of
factors, some of which may be beyond our control. Certain material factors could cause our actual results or activities or actual events or conditions to differ from those anticipated. Risks associated with the purchase of our shares include:
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">All or a substantial portion of your distributions may be a return of capital and not a return on capital. Rates of distribution will not necessarily
be indicative of our overall performance. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">This is a &#147;blind pool&#148; offering because we have not identified any specific investments as of the date of this prospectus and therefore
cannot determine all of the potential risks associated with our portfolio at this time. Our manager&#146;s limited operating history decreases your ability to evaluate your investment. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Your shares are effectively illiquid, and you may not be able to sell your shares. You should be prepared to hold your shares for the life of our fund,
which is anticipated to be approximately eight years but may be longer. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Uncertainties associated with the equipment leasing industry may have an adverse effect on our business and may adversely affect our ability to give
you any economic return from our shares or a complete return of your capital. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">You will have limited voting rights. Our manager will make all of our management decisions. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our manager will receive substantial fees from us. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our use of debt financing means our losses may be greater than if debt financing were not used. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">There are potential conflicts of interest between us and our manager and its affiliates. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">See &#147;Risk Factors&#148; and &#147;Fiduciary Duties and Conflicts of Interest.&#148; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Although estimates and assumptions concerning potential investments are believed by the manager to be reasonable, those estimates and
assumptions are uncertain and unpredictable. To the extent that actual events differ materially from the manager&#146;s assumptions and estimates, actual results will differ from those expected. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">111
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_61"></A>WHERE YOU CAN FIND MORE INFORMATION </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares offered in this
prospectus. This prospectus, filed as part of the registration statement, does not contain all of the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules
and regulations of the SEC. For further information about us and our shares, we refer you to the registration statement and to its exhibits and schedules. Statements in this prospectus about the contents of any contract, agreement or other document
are not necessarily complete and, in each instance, we refer you to the copy of the contract, agreement or document filed as an exhibit to the registration statement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Anyone may inspect the registration statement and its exhibits and schedules without charge at the public reference facilities the SEC maintains at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain copies of all or any part of these materials from the SEC upon the payment of certain fees prescribed by the SEC. You may obtain further information about the operation of the SEC&#146;s Public Reference Room by calling the SEC at
1-800-SEC-0330. You may also inspect these reports and other information without charge at the website maintained by the SEC. The address of this website is http://www.sec.gov. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Upon effectiveness of the registration statement, we will become subject to the informational requirements of the Exchange Act and will
be required to file reports and other information with the SEC. You will be able to inspect and copy these reports and other information at the public reference facilities maintained by the SEC at the address noted above. You also will be able to
obtain copies of this material from the Public Reference Room as described above or inspect them without charge at the SEC&#146;s website. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">112
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_62"></A>GLOSSARY </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following terms used in this prospectus have the meanings set forth below: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Acquisition Expenses&#148; </I>means all expenses related to the selection, acquisition and documentation of investments and
Equipment, whether or not acquired. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Acquisition Fees&#148; </I>means the total of all fees and commissions paid by
any party in connection with the initial purchase of Equipment or other investments. Acquisition Fees do not include Acquisition Expenses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Affiliate&#148; </I>means, with respect to any Person: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1) any other
Person directly or indirectly controlling, controlled by or under common control with that Person; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2) any other Person
owning or controlling 10.0% or more of the outstanding voting securities of that Person; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3) any officer, director, or
partner of that Person; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(4) if that other Person is an officer, director or partner, any company which that Person acts
for in that capacity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Asset Management Fee&#148; </I>means the fee payable by us to our Manager for actively
managing the leasing of our Equipment, equal to the lesser of: (1)&nbsp;the total of (a)&nbsp;5.0% of Gross Rental Payments from Non-Full Payout Leases, except that 1% of Gross Rental Payments shall be payable with respect to Non-Full Payout Leases
for which management services are performed by non-Affiliates under the Manager&#146;s supervision; (b)&nbsp;2.0% of Gross Rental Payments from Full Payout Leases which contain Net Lease provisions; and (c)&nbsp;7.0% of Gross Rental Payments from
Equipment for which we provide services in addition to Equipment management relating to the continued and active operation of the our Equipment such as, but not limited to, ongoing marketing and re-leasing of Equipment and hiring or arranging for
the hiring of crews or operating personnel for our Equipment and similar services; or (2)&nbsp;the amount of fees which are competitive for similar services. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Capital Contribution&#148; </I>means (1)&nbsp;as to the Manager, its $2,000 cash contribution, plus any additional amounts the Manager may contribute, and (2)&nbsp;as to any other Member, the
gross amount of initial investment in us actually paid by the Member for Shares, without deduction for Front-End Fees. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Client&#148; </I>means a lessee, hirer, user, licensee, bailee, charterer or similar person under a Lease. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Dealer Manager&#148; </I>means Macquarie Capital (USA) Inc., an Affiliate of the Manager, and any successor thereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Dealer Manager Fee&#148; </I>means the fee payable by us to the Dealer Manager in an amount equal to $0.30 per Share sold.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Delaware Act&#148; </I>means the Delaware Limited Liability Company Act, as amended from time to time, or any
successor statute thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Discount Rate&#148;</I> is the discount rate that, when applied to (i)&nbsp;the minimum
rental payments under a Lease, plus (ii)&nbsp;the estimated fair value of the Equipment to the lessor at the end of the Lease term, causes the aggregate present value at the beginning of the Lease term to equal the purchase price of the Equipment.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;DRP&#148; </I>means our Distribution Reinvestment Plan, a copy of which is attached to this prospectus as Appendix
E. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Due Diligence Reimbursements&#148; </I>means the fees and expenses actually incurred for bona fide, detailed and
itemized, accountable due diligence efforts expended in connection with the Offering. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">113
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Effective Date&#148; </I>means the date the Registration Statement is declared
effective by the SEC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Equipment&#148; </I>means the equipment acquired and owned by us to be leased by us to
Clients, as well as rights relating to Equipment, including residual rights, and related property, real or personal, acquired by us, or in which we have acquired a direct or indirect interest, and also includes other tangible and intangible real or
personal property which at any time is owned in fee simple or is subject to a Lease. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Final Closing Date&#148;
</I>means the last date on which any Member is admitted to the Fund. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;FINRA&#148; </I>means the Financial Industry
Regulatory Authority. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Front-End Fees&#148; </I>means fees and expenses paid by any Person for any services rendered
during our organization and offering or acquisition phases, including Selling Commissions, Due Diligence Reimbursements, the Dealer Manager Fee, the O&amp;O Expense Allowance, Acquisition Fees, Acquisition Expenses and all other similar fees however
designated, but does not include Acquisition Fees or Acquisition Expenses paid by a manufacturer of Equipment to any of its employees unless those Persons are Affiliates of our Manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Full-Payout Lease&#148; </I>means any Lease pursuant to which the aggregate non-cancellable rental payments, which shall not
include payment for services to be provided under the lease, such as asset management, maintenance and other services, due during the initial term of the lease, on a net present value basis using the Discount Rate, are sufficient to permit us to
recover the purchase price of the Equipment subject to the lease. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Fund&#148; </I>means Macquarie Equipment Leasing
Fund Two, LLC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Gross Rental Payments&#148; </I>means revenue or income from any and all sources with respect to a
Lease or similar document, including (1)&nbsp;rental, royalty, lease, hire, license, usage, service, charter and other payments made by Clients under or otherwise with respect to Leases or similar documents whether or not pledged to a lender and
including payments assigned for direct payment to lenders and (2)&nbsp;interest earned on funds on deposit for us, other than Subscription Funds. Gross Rental Payments includes receipts from any and all sources, whether received by us or by a
Lender, with respect to any Full-Payout Lease or Non-Full Payout Lease, as applicable, including late payment charges and payments made by guarantors, regardless of whether (a)&nbsp;the receipts are pledged or assigned for payment to a lender by us,
the Client or a third party or (b)&nbsp;title to the Equipment is held by us, the Client, a lender or another Person. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Independent Director&#148;</I> means a director who at the time of appointment to our manager&#146;s board of directors is not,
and within the last two years has not been, directly or indirectly associated with our manager or its affiliates by virtue of (i)&nbsp;ownership of an interest in our manager or its affiliates; (ii)&nbsp;employment by our manager or its affiliates;
(iii)&nbsp;service as an officer or director of our manager&#146;s affiliates; (iv)&nbsp;performance of services, other than as a director, for us; or (v)&nbsp;maintenance of a material business or professional relationship with our manager or any
of its affiliates. A business or professional relationship is considered material if the gross revenue derived by the director from our manager and its affiliates exceeds 5% of either the director&#146;s annual gross revenue during either of the
last two years or the director&#146;s net worth on a fair market value basis. An indirect relationship shall include circumstances in which a director&#146;s spouse, parents, children, siblings, mothers or fathers-in-law, sons- or daughters-in-law
or brothers- or sisters-in-law is or has been associated with our manager, any of its affiliates or us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Initial
Closing Date&#148; </I>means the date on which the first Members are admitted to the Fund, after the Minimum Offering has been raised. <I> </I></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Investor Return&#148; </I>means a pre-tax 8.0%&nbsp;per annum internal rate of return compounded daily on all capital contributed to us, calculated on the date of distribution and taking into
account all capital contributions and all distributions. Investor return includes a return equal to all capital contributions we have received from you. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">114
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Lease&#148; </I>means any Full-Payout Lease and any Non-Full Payout Lease and any
residual value interest therein, including under any forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options, joint ventures, special purpose vehicles, companies or other equipment related
transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Leverage&#148; </I>means the use of debt in the acquisition of equipment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Liquidation Period&#148; </I>means the period beginning on the first day following the end of the Operating Period and
continuing for the amount of time deemed necessary by the Manager for orderly termination of our operations and affairs and liquidation or disposition of our investments and other assets and the realization of the maximum proceeds for those
investments and other assets, which is expected to continue for 12 months beyond the end of the Operating Period but which could last until up to 36 months beyond the end of the Operating Period. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Majority Interest&#148; </I>means Members owning more than 50.0% of the aggregate outstanding Shares. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Manager&#148; </I>means Macquarie Asset Management Inc., a Delaware corporation, or any other Person which succeeds it in that
capacity. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Maximum Offering&#148; </I>means the receipt and acceptance by us of subscriptions to purchase 20,000,000
Shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Member&#148; </I>means any Person who is the owner of Shares and who has been admitted to the Fund as a
Member. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Minimum Offering&#148; </I>means receipt and acceptance by us of subscriptions for not less than $1,200,000
in offering proceeds, which may including the investment which will be made by the Manager or its affiliates. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;NASAA
Guidelines&#148; </I>means the Statement of Policy regarding Equipment Programs adopted by the North American Securities Administrators Association, Inc., as in effect on the date of the Prospectus.<I> </I></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Net Lease&#148; </I>means a Lease under which the Client assumes responsibility for, and bears the cost of, insurance, taxes,
maintenance, repair and operation of the leased asset and where the non-cancellable rental payments pursuant to such Lease are absolutely net to us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Non-Full Payout Lease&#148; </I>means any lease, entered into or acquired from time to time by us, pursuant to which the aggregate non-cancellable rental payments, which shall not include payment
for services to be provided under the lease, such as asset management, maintenance and other services, during the initial term of such lease, on a net present value basis using the Discount Rate, are not sufficient to permit us to recover the
purchase price of the Equipment subject to the lease. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;O&amp;O Expense Allowance&#148; </I>means an amount up to
$0.240 per Share for the first 3,500,000 Shares sold; $0.200 per Share for Shares sold that exceed 3,500,000 Shares but do not exceed 10,000,000 Shares; and $0.172 per Share for Shares sold in excess of 10,000,000 Shares. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Offering&#148; </I>means the offering of Shares pursuant to the Prospectus. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Offering Period&#148; </I>means the period from the Effective Date to the Termination Date. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Operating Agreement&#148; </I>means the Limited Liability Company Operating Agreement of the Fund, as it may be amended,
supplemented or restated from time to time. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">115
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Operating Period&#148; </I>means the period beginning with the Initial Closing Date
and ending 5 years after the Final Closing Date; provided, however, that the Operating Period may be extended, by notice to the Members, at the discretion of the Manager for a further period of not more than an additional 12 months. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Outperformance Fee&#148; </I>the increased percentage fees payable to our manager after investor return is achieved. Prior to
the time that investor return is achieved, we will pay our manager an amount equal to 1.0% of distributions made to our members. After the time that investor return is achieved, we will pay our manager an amount equal to 19.0% of distributions made
to our members. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Person&#148; </I>means any natural person, corporation, general partnership, limited partnership,
limited liability company, joint venture, trust, business trust, association, unincorporated organization, country, state, city or other political subdivision, governmental agency or instrumentality, or other entity. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Portfolio&#148; </I>means our portfolio of Equipment and Leases and any of our interests in Equipment and Leases of any nature
whatsoever, whether the interest is owned directly or indirectly, through the ownership of equity or other instruments, whether held through a nominee, joint venture, partnership or otherwise, including, without limitation, equipment purchase option
agreements, forward purchase agreements or any other agreement evidencing an interest in Equipment and Leases and in any related matters. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Prospectus&#148; </I>means the prospectus, included as part of the Registration Statement on Form S-1, in the final form in which such prospectus is filed with the SEC pursuant to Rule 424 under
the Securities Act and as thereafter supplemented or amended pursuant thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Registration Statement&#148;
</I>means the registration statement for the Shares on Form S-1 filed with the SEC under the Securities Act which registration statement was declared effective by the SEC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Re-Leasing Fees&#148; </I>means a fee in an amount that will not exceed the lesser of: (i)&nbsp;2.0% of Gross Rental Payments derived from the re-lease of Equipment after the time that the
re-lease of such Equipment has been consummated to a different Client as a result of the efforts of the Manager or its Affiliates; or (ii)&nbsp;the competitive rate charged by others for comparable services for similar equipment transactions;
provided, however, that Re-Leasing Fees shall only be payable if the Manager is also entitled to Asset Management Fees for the Equipment and further provided that no Re-Leasing Fees shall be paid if the Manager receives Asset Management Fees equal
to 7.0% of the Gross Rental Payments and further provided that Re-Leasing Fees will only be payable as each rental payment is made over the term of the lease. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Re-Marketing Fees&#148; </I>means the fee payable to our Manager in the amount equal to the lesser of (1)&nbsp;3.0% of the purchase price paid to us by the purchaser of our Investment, including
under lease agreements, trading transactions, residual value guarantees, forward purchase agreements, equipment purchase options, joint ventures and special purpose vehicles and companies; or (2)&nbsp;one-half of reasonable, customary and
competitive brokerage fees paid for services rendered in connection with the sale of equipment of similar size, type and location. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;SEC&#148; </I>means the United States Securities and Exchange Commission. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Selling Commissions&#148; </I>means commissions in the amount of $0.70 per Share sold paid by us to the Dealer Manager and each
Selling Dealer with respect to the Shares sold by them. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Selling Dealer&#148; </I>means each member firm of FINRA
which has been selected by the Dealer Manager to offer and sell Shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Share&#148; </I>means a membership interest
in us. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Specified Equipment Program&#148;</I> means an equipment leasing fund managed by our manager where at least
75% of the net proceeds from the sale of the program interests are allocable to the purchase or renovation of identified equipment or one specified type of identified equipment. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">116
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Subscription Funds&#148; </I>means the funds received from a subscriber in respect
of a purchase of Shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;Termination Date&#148; </I>means the earliest of (1)&nbsp;the date on which the Maximum
Offering has been sold, (2)&nbsp;12 months following the Effective Date, provided that such 12 month period may be extended at the discretion of the Manager for a further period of not more than an additional 12 months, and (3)&nbsp;the termination
of the Offering by the Manager at any time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>&#147;UBTI&#148; </I>means unrelated business taxable income. For a tax-exempt
entity, UBTI includes gross income derived from a business not substantially related to the purpose which forms the basis for an entity&#146;s tax-exempt status, less the deductions allowed which are directly connected with the carrying on of the
business. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">117
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc"></A>INDEX TO FINANCIAL STATEMENTS </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_1">Unaudited Balance Sheets as of December&nbsp;31, 2010 and March&nbsp;31, 2010</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-2</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_2">Notes to unaudited Balance Sheets</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-3</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. AND SUBSIDIARY </B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_3">Report of Independent Registered Public Accounting Firm</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-7</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_4">Consolidated Balance Sheets as of March&nbsp;31, 2010 and 2009</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-8</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_5">Notes to Consolidated Balance Sheets </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-9</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_6">Report of Independent Registered Public Accounting Firm</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-13</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_7">Balance Sheet as of February&nbsp;28, 2011</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-14</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#fin147678_8">Notes to Balance Sheet</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-15</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-1
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_1"></A>Macquarie Asset Management Inc. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unaudited Balance Sheets </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="78%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>December&nbsp;31,<BR>2010</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>March&nbsp;31,<BR>2010</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ASSETS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due from affiliates</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,630,373</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,833,800</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Deferred offering costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">357,615</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">574,135</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Taxes receivable&#151;related party</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">390,681</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">249,859</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other assets&#151;related party</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">869,611</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">233,930</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,248,280</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3,891,724</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Non-Current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Investment in Macquarie Equipment Leasing Fund</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,331,918</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">480,475</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,868</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,431</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Non-Current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,336,786</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">481,906</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">5,585,066</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,373,630</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>LIABILITIES AND SHAREHOLDER&#146;S EQUITY</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Current Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accrued expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">214,849</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">172,422</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Current Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">214,849</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">172,422</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Non-current Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due to affiliates-loan</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,084,585</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,050,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due to affiliates-other</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,376,772</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,045,025</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Non-Current Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3,461,357</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,095,025</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3,676,206</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,267,447</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commitments and Contingencies</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Shareholder&#146;s Equity</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Shareholder&#146;s equity ($0.01 par value; 10,000 shares authorized; 10,000 shares issued)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Paid in capital</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,449,900</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,449,900</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accumulated deficit</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(541,140</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(343,817</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Shareholder&#146;s Equity</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,908,860</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,106,183</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Liabilities and Shareholder&#146;s Equity</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">5,585,066</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,373,630</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE> <P STYLE="margin-top:120px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>See accompanying notes to unaudited Balance Sheets</I> </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-2
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_2"></A>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO UNAUDITED BALANCE SHEETS </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ORGANIZATION AND BUSINESS OPERATIONS </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. (the &#147;Manager&#148;) was incorporated in Delaware on August&nbsp;21, 2008. The Manager&#146;s fiscal year ends on
March&nbsp;31. As of March&nbsp;31, 2009, Macquarie Asset Management Inc. was a wholly owned subsidiary of Macquarie Holdings (U.S.A.) Inc. (&#147;MHUSA&#148;). Subsequently on April&nbsp;1, 2009, ownership of the Manager was transferred from MHUSA
to Macquarie NB Holdings Inc. (&#147;MNBH&#148;), an affiliate. Both MHUSA and MNBH are members of the Macquarie Group of companies which is comprised of Macquarie Group Limited and its subsidiaries and affiliates worldwide (the &#147;Macquarie
Group&#148;). Macquarie Group Limited is headquartered in Australia and is listed on the Australian Stock Exchange. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager made an
initial contribution of $5,000 to Macquarie Equipment Leasing Fund, LLC (&#147;Fund One&#148;), a Delaware limited liability company. As of March&nbsp;5, 2010, Fund One reached its minimum offering amount and accepted capital contributions of over
$2,500,000 from external shareholders. The Manager made additional capital contributions on March&nbsp;31, 2010 and June&nbsp;22, 2010 for $500,000 and $1,000,000, respectively, in Fund One. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Fund One was formed for the purpose of being an equipment leasing program to acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. The majority of the
equipment is leased to corporate clients. Fund One generates income through the collection of lease rentals and other revenues and is expected to generate income through the sale of leased equipment and other portfolio investments. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. has been appointed the manager of Fund One and earns fees by providing or arranging all services necessary for the
operations of Fund One, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services. Further, Fund One may be required to reimburse the Manager for costs incurred by them
in managing Fund One and its portfolio of equipment, equipment lease and other equipment-related investments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager was considered to
be a development stage enterprise until March 2010, as defined by Accounting Standards Codification (&#147;ASC&#148;) 915, <I>Developmen</I>t <I>Stag</I>e <I>Entities</I>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Fund One is currently in its offering period, which commenced on June&nbsp;19, 2009 and is anticipated to end on June&nbsp;19, 2011. It is currently in the process of raising capital. As of
December&nbsp;31, 2010, Fund One has received and accepted cumulative subscriptions for 2,113,196 shares (including the Distribution Reinvestment Plan, or &#147;DRP&#148;, shares and net of repurchase of shares) of limited liability company interest
(&#147;Shares&#148;) for $18,508,589, net of offering costs, including the capital contributions from the Manager. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNIFICANT ACCOUNTING POLICIES </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Basis of Accounting and Use of Estimates </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Balance Sheets have been prepared in conformity with accounting principles generally accepted in the United States of America. This requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Investment in Macquarie Equipment Leasing Fund </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Generally, a variable interest
entity, or VIE, is an entity with one or more of the following characteristics: (a)&nbsp;the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support;
(b)&nbsp;as a group the holders of the equity investment at risk lack (i)&nbsp;the ability to </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-3
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO UNAUDITED BALANCE SHEETS&#151;(continued) </B></FONT></P>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
make decisions about an entity&#146;s activities through voting or similar rights, (ii)&nbsp;the obligation to absorb the expected losses of the entity, or (iii)&nbsp;the right to receive the
expected residual returns of the entity; or (c)&nbsp;the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity&#146;s activities either involve, or are conducted on behalf of,
an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a)&nbsp;the power to direct the activities of the VIE that most significantly impact the VIE&#146;s economic performance,
and (b)&nbsp;the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager
performed a qualitative and quantitative assessment as to the whether Fund One is considered to be a VIE, and whether or not the Manager is considered to be the Primary Beneficiary. In applying these assessments, the Manager identified Fund One to
be a VIE and concluded that the Manager was not considered the Primary Beneficiary as the Manager&#146;s contractual arrangements with Fund One are fiduciary in nature and do not constitute a variable interest. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager currently accounts for its interest in Fund One under the equity method as it is able to exercise significant influence but not control the
operations of Fund One. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>Income Taxes </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Macquarie Corporate and Asset Finance Holdings Inc. (&#147;MCAF&#148;) files consolidated federal and state income tax returns, including the results of all the entities within its consolidated tax group.
These income tax returns will include the operations of the Manager. Pursuant to an informal tax sharing agreement that MCAF and the Manager entered into, MCAF or other members of the consolidated tax group will reimburse the Manager for tax
benefits used by the consolidated tax group. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager uses the liability method in accounting for income taxes. Under this method,
deferred income tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Valuation reserves are established when it is determined that it is more than likely than not that the deferred income tax asset will not be realized. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Manager records its benefit for income taxes as amounts due based upon the estimated taxes that would be due if the Manager had filed its income tax returns on a separate entity basis. The
Manager&#146;s share of current and deferred federal and state tax benefits or obligations are recorded as taxes receivable (related party) in the balance sheet. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B><I>Deferred Offering Costs </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager complies with the requirements of the ASC
340-10, <I>Other Assets and Deferred Costs&#151;Expenses incurred before the effective date of an offering of equity securities</I>. Deferred offering costs consists of legal fees and other direct costs incurred that are directly related to the
proposed offering of membership interests in Fund One (the &#147;Proposed Offering&#148;), and that may be recovered from Fund One upon the completion of the Proposed Offering. The Proposed Offering contemplates Fund One offering membership
interests on <I></I><I></I>with the intention of raising up to $157,200,000 of equity. Fund One has paid or accrued $510,536 in organization and offering expense as of December&nbsp;31, 2010. The Manager has recorded this as reimbursement of
deferred offering costs. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><I>New Accounting Pronouncements </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><I></I>In July 2010, the FASB issued ASU 2010-20 <I>Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,</I> an amended guidance for disclosures about the
credit quality of financing </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-4
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO UNAUDITED BALANCE SHEETS&#151;(continued) </B></FONT></P>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
receivables and the allowance for credit losses. This update amends existing guidance by requiring more robust and disaggregated disclosures by an entity about the credit quality of its financing
receivables and its allowance for credit losses. These disclosures will provide financial statement users with additional information about the nature of credit risks inherent in a company&#146;s financing receivables, how a company analyzes and
assesses credit risk in determining its allowance for credit losses, and the reasons for any changes a company may make in its allowance for credit losses. This update is generally effective for interim and annual reporting periods ending on or
after December&nbsp;15, 2010; however, certain aspects of the update pertaining to activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December&nbsp;15, 2010. The adoption of
the new guidance had no significant effect on the Manager&#146;s overall financial statements. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TRANSACTIONS WITH AFFILIATES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager
has entered into services agreements with MHUSA and Macquarie Financial Holdings Limited (&#147;MFHL&#148;), a member of the Macquarie Group, to receive corporate administrative services for the Manager, including but not limited to, support
services like accounting, human resources, risk management and information technology services. The service fee will equal the base cost of performing or providing those services plus a 10% mark-up where applicable. The Manager recorded charges
related for such services in Due to affiliates&#151;other in the Balance Sheet. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager has also entered into an Accession Agreement with
Macquarie Bank Limited (&#147;MBL&#148;), a member of the Macquarie Group, to become a party to the Omnibus Loan and Deposits Agreement, which allows MBL, or one of its specified affiliates within the Macquarie Group, to provide the Manager with
cash management services. At December&nbsp;31, 2010, included in Due from affiliates is $2,559,803, including accrued interest, from MBL and at March&nbsp;31, 2010, included in Due from affiliates is $2,791,792 including accrued interest, from MFHL,
related to the aforementioned agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In December 2009, the Manager received a $1,050,000, interest bearing intercompany loan from its
parent, which is included in Due to affiliates&#151;loan. The loan is renewable every six months and will be used to provide additional contributions to the Fund, if the Fund raises over $7,500,000 in its offering. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As discussed in Note 1, the Manager will earn fees from providing or arranging all services necessary for the operations of Fund One, including those
relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Capital
(USA) Inc. (the &#147;Dealer Manager&#148;) will act as dealer manager for Fund One and will manage a group of selling dealers, including other unaffiliated broker dealers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Manager and the Dealer Manager will receive fees from Fund One for offering services during the offering period including: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Selling commission of up to 7% of the offering proceeds from each share sold by the Dealer Manager or selling dealers, payable to the Dealer Manager
(and re-allowed to unaffiliated selling dealers); </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due diligence expense reimbursement for detailed and itemized bona fide accountable due diligence expenses, payable to the Dealer Manager (and
re-allowed to unaffiliated selling dealers); </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dealer manager fees of 3% of the offering proceeds from each share sold, payable to the Dealer Manager; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Organization and offering expense allowance, which varies based upon the actual organization and offering expenses incurred by the Manager and its
affiliates and the number of shares sold, payable to the Manager. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-5
</FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO UNAUDITED BALANCE SHEETS&#151;(continued) </B></FONT></P>
<p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager and its affiliates will receive fees from Fund One for operating services during the
offering period and on an on-going basis once Fund One&#146;s operations have commenced, including acquisition fees, asset management fees, re-leasing fees, remarketing fees, outperformance fees and a reimbursement of operating expenses depending
upon the scope of services the Manager provides to Fund One. As of December 31, 2010 the Manager has recorded a receivable from Fund One of $850,130 related to operating expenses. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUBSEQUENT EVENTS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager has
evaluated subsequent events through March 15, 2011, which is the date the financial statements were issued. </FONT></P>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-6
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_3"></A>Report of Independent Registered Public Accounting Firm
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">To the Board of Directors and shareholder of </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In our opinion, the accompanying consolidated balance sheets
present fairly, in all material respects, the financial position of Macquarie Asset Management Inc. (a development stage enterprise) (the &#147;Company&#148;) and its Subsidiary at March&nbsp;31, 2010 and 2009 in conformity with accounting
principles generally accepted in the United States of America. These financial statements are the responsibility of the Company&#146;s management; our responsibility is to express an opinion on the financial statements based on our audit. We
conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated balance sheets are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated balance sheets, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">/s/ PricewaterhouseCoopers LLP </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">New York, New York </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">May&nbsp;18, 2010 </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-7
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_4"></A>Macquarie Asset Management Inc. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a development stage enterprise) </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Consolidated Balance Sheets </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="78%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>March&nbsp;31,<BR>2010</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>March&nbsp;31,<BR>2009</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ASSETS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash and cash equivalents</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,808</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due from affiliates</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,833,800</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,713,323</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Deferred offering costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">574,135</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">431,689</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Taxes receivable&#151;related party</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">249,859</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">31,530</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other assets&#151;related party</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">233,930</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3,891,724</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,181,350</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Non-current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Investment in Macquarie Equipment Leasing Fund</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">480,475</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,431</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Non-current Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">481,906</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Assets</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,373,630</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,181,350</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Current Liabilities:</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accrued offering costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">147,623</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accrued expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">172,422</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">62,160</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Current Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">172,422</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">209,783</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Non-current Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due to affiliates&#151;loan</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,050,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due to affiliates&#151;other</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,045,025</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">11,178</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Non-current Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,095,025</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">11,178</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Liabilities</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,267,447</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">220,961</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commitments and Contingencies</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Shareholders&#146; Equity:</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Shareholders&#146; equity ($0.01 par value; 10,000 shares authorized; 10,000 shares issued)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Paid in capital</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,449,900</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,999,900</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Deficit accumulated during development stage</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(343,817</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(39,611</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Shareholders&#146; Equity</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,106,183</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,960,389</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Total Liabilities and Shareholders&#146; Equity</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,373,630</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,181,350</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE> <P STYLE="margin-top:90px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>See accompanying notes to Consolidated Balance Sheets </I> </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-8
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_5"></A>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Development Stage Enterprise) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO CONSOLIDATED BALANCE SHEETS </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ORGANIZATION AND BUSINESS OPERATIONS </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. (the &#147;Manager&#148;) was incorporated in Delaware on August&nbsp;21, 2008. The Manager&#146;s fiscal year ends on
March&nbsp;31. As of March&nbsp;31, 2009, Macquarie Asset Management Inc. was a wholly owned subsidiary of Macquarie Holdings (U.S.A.) Inc. (&#147;MHUSA&#148;). Subsequently on April&nbsp;1, 2009, ownership of the Manager was transferred from MHUSA
to Macquarie NB Holdings Inc. (&#147;MNBH&#148;), an affiliate. Both MHUSA and MNBH are members of the Macquarie Group of companies which is comprised of Macquarie Group Limited and its subsidiaries and affiliates worldwide (the &#147;Macquarie
Group&#148;). Macquarie Group Limited is headquartered in Australia and is listed on the Australian Stock Exchange. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager made an
initial contribution of $5,000 to Macquarie Equipment Leasing Fund, LLC (the &#147;Fund&#148;), a Delaware limited liability company. The Fund was a wholly owned subsidiary of the Manager as of March&nbsp;31, 2009 and the Manager&#146;s Balance
Sheet as of that time included consolidated results. As of March&nbsp;5th, 2010 the Fund reached its minimum offering amount and accepted capital contributions of over $2,500,000 from external shareholders. As of that date the Fund was no longer a
wholly owned subsidiary of the Manager. The Manager made additional capital contributions of $500,000 to the Fund for 53,763 shares at $9.30 per share. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Fund was formed for the purpose of being an equipment leasing program that will acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. The majority of
the equipment will be leased to corporate clients. The Fund will generate income through the collection of lease rentals and other revenues and through the sale of leased equipment and other portfolio investments. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. has been appointed the manager of the Fund and will earn fees by providing or arranging all services necessary for the
operations of the Fund, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services. Further, the Fund may be required to reimburse the Manager for costs incurred by them
in managing the Fund and its portfolio of equipment, equipment lease and other equipment-related investments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager is considered to be
a development stage enterprise. Through March&nbsp;31, 2010 its activities have primarily consisted of the organization and start-up of the company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Fund is currently in its offering period, which commenced on June&nbsp;19, 2009 and is anticipated to end in June 2011. It is currently in the process of raising capital. As of March&nbsp;31, 2010,
the Fund has received and accepted cumulative subscriptions for 467,868 shares of limited liability company interest (&#147;Shares&#148;) for $4,097,598, net of offering costs including the capital contributions from the Manager. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNIFICANT ACCOUNTING POLICIES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Basis
of Accounting and Use of Estimates </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Consolidated Balance Sheets have been prepared in conformity with accounting principles generally
accepted in the United States of America. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cash and Cash Equivalents </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-9
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Development Stage Enterprise) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO CONSOLIDATED BALANCE SHEETS&#151;(continued) </B></FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investment in Macquarie Equipment Leasing Fund </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager currently accounts for its interest in the Fund under the equity method. Since deconsolidation, the Manager has reduced its investment in the
Fund and recognized a loss based on its ownership percentage. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Income Taxes </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Macquarie Corporate and Asset Finance Holdings Inc. (&#147;MCAF&#148;) files consolidated federal and state income tax returns, including the results of all the entities within its consolidated tax group.
These income tax returns will include the operations of the Manager. Pursuant to a tax sharing agreement that MCAF and the Manager intend to enter into, MCAF or other members of the consolidated tax group will reimburse the Manager for tax benefits
used by the consolidated tax group. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager uses the liability method in accounting for income taxes. Under this method, deferred income
tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected
to reverse. Valuation reserves are established when it is determined that it is more than likely than not that the deferred income tax asset will not be realized. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Manager records its benefit for income taxes as amounts due based upon the estimated taxes that would be due if the Manager had filed its income tax returns on a separate entity basis. The
Manager&#146;s share of current and deferred federal and state tax benefits or obligations are recorded as taxes receivable (related party) in the balance sheet. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Development Stage Company </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager complies with the reporting requirements of
Accounting Standards Codification (&#147;ASC&#148;) 915, <I>Developmen</I>t <I>Stag</I>e <I>Entities</I>. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Deferred Offering Costs </B>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager complies with the requirements of the ASC 340-10, <I>Other Assets and Deferred Costs&#151;Expenses incurred before the effective
date of an offering of equity securities</I>. Deferred offering costs consists of legal fees and other direct costs incurred that are directly related to the proposed offering of membership interests in the Fund (the &#147;Proposed Offering&#148;),
and that may be recovered from the Fund upon the completion of the Proposed Offering. The Proposed Offering contemplates the Fund offering membership interests on a &#147;<I>bes</I>t <I>efforts</I>&#148; basis with the intention of raising up to
$157,200,000 of equity. The Fund paid or accrued $113,711 in organization and offering expense during the first quarter of 2010. The Manager has recorded this as reimbursement of deferred offering costs. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>New Accounting Pronouncements </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In June
2009, the Financial Accounting Standards Board (&#147;FASB&#148;) issued Accounting Standards Update 2009-01. This guidance sets forth the Accounting Standards Codification that will be the single source of authoritative U.S. GAAP for all
nongovernmental entities. The Codification supersedes all existing non-SEC accounting and reporting standards. This guidance is effective for financial statements issued for interim and annual periods ending after September&nbsp;15, 2009. Since this
guidance only requires amended disclosures concerning the reporting of accounting standards, the adoption of this guidance did not have a material impact on the Manager&#146;s financial statements. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-10
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Development Stage Enterprise) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO CONSOLIDATED BALANCE SHEETS&#151;(continued) </B></FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In May 2009, the FASB issued Accounting Standards Codification (&#147;ASC&#148;) 855 <I>Subsequent
Events</I>, which sets forth the accounting and disclosure requirements for subsequent events; events that occur after the balance sheet date, but before financial statements are issued or are available to be issued. This guidance requires
disclosure of the date through which subsequent events have been evaluated. If the subsequent events are not recognized in the financial statements, this guidance also requires disclosure of the nature and effect of such in the financial statements.
In February 2010, FASB issued ASU 2010-09 <I>Amendments to Certain Recognition and Disclosure Requirements. </I>The guidance requires an entity that is either an SEC filer or a conduit bond obligor for conduit debt securities that are traded in a
public market to evaluate subsequent events through the dates financial statements are issued. All other entities are required to evaluate subsequent events through the date financial statements are available to be issued. It also requires all
entities excluding the SEC filers to disclose the dates through which the subsequent events have been evaluated. The adoption of these pronouncements did not have a material impact on the Fund&#146;s financial statements. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TRANSACTIONS WITH AFFILIATES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager
has entered into services agreements with MHUSA and Macquarie Financial Holdings Limited (&#147;MFHL&#148;), a member of the Macquarie Group, to receive corporate administrative services for the Manager, including but not limited to, support
services like accounting, human resources, risk management and information technology services. The service fee will equal the base cost of performing or providing those services plus a 10% mark-up where applicable. The Manager recorded charges
related for such services in Due to affiliates&#151;other in the Consolidated Balance Sheet. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager has also entered into an Accession
Agreement with Macquarie Bank Limited (&#147;MBL&#148;), a member of the Macquarie Group, to become a party to the Omnibus Loan and Deposits Agreement, which allows MBL, or one of its specified affiliates within the Macquarie Group, to provide the
Manager with cash management services. At March&nbsp;31, 2010, included in Due from affiliates is $2,791,792, including accrued interest, from MBL and at March&nbsp;31, 2009, included in Due from affiliates is $1,713,323 including accrued interest,
from Macquarie Financial Holdings Limited, related to the aforementioned agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In December 2009, the Manager received a $1,050,000, 2.5%
interest bearing intercompany loan from its parent, which is included in Due to affiliates&#151;loan. The loan is renewable every six months and will be used to provide additional contributions to the Fund, if the Fund raises over $7,500,000 in its
offering. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As discussed in Note 1, the Manager will earn fees from providing or arranging all services necessary for the operations of the
Fund, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Capital (USA) Inc. (the &#147;dealer manager&#148;) will act as dealer manager for the Fund and will manage a group of selling dealers,
including other unaffiliated broker dealers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager and the dealer manager will receive fees from the Fund for offering services during
the offering period including: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Selling commission of up to 7% of the offering proceeds from each share sold by the dealer manager or selling dealers, payable to the dealer manager
(and re-allowed to unaffiliated selling dealers); </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due diligence expense reimbursement for detailed and itemized bona fide accountable due diligence expenses, payable to the dealer manager (and
re-allowed to unaffiliated selling dealers); </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-11
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE ASSET MANAGEMENT INC. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Development Stage Enterprise) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO CONSOLIDATED BALANCE SHEETS&#151;(continued) </B></FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>

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<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dealer manager fees of 3% of the offering proceeds from each share sold, payable to the dealer manager; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Organization and offering expense allowance, which varies based upon the actual organization and offering expenses incurred by the Manager and its
affiliates and the number of shares sold, payable to the Manager. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager and its affiliates will receive fees from the
Fund for operating services during the offering period and on an on-going basis once the Fund&#146;s operations have commenced, including acquisition fees, asset management fees, re-leasing fees, remarketing fees, outperformance fees and a
reimbursement of operating expenses depending upon the scope of services the Manager provides to the Fund. As of March&nbsp;31, 2010 the Manager has a receivable from the Fund of $96,000 related to acquisition fees and $117,308 related to operating
expenses charged to the Fund. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUBSEQUENT EVENTS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager has
evaluated subsequent events through May&nbsp;18, 2010, which is the date the financial statements were issued. </FONT></P>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-12
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_6"></A>Report of Independent Registered Public Accounting Firm
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">To the Member of </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie
Equipment Leasing Fund Two, LLC </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In our opinion, the accompanying balance sheet presents fairly, in all material respects, the financial
position of Macquarie Equipment Leasing Fund Two, LLC (a development stage enterprise) (the &#147;Company&#148;) at February 28, 2011 in conformity with accounting principles generally accepted in the United States of America. This financial
statement is the responsibility of the Company&#146;s management; our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with auditing standards of the
Public Company Accounting Oversight Board (United States), which require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, and evaluating the overall balance sheet presentation. We believe that our audit of
the balance sheet provides a reasonable basis for our opinion. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ PricewaterhouseCoopers LLP </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">New York, New York </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">March&nbsp;15, 2011
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-13
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_7"></A>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a development stage enterprise) </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Balance Sheet </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">February&nbsp;28, 2011 </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="92%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ASSETS</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash and cash equivalents</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>LIABILITIES AND MEMBER&#146;S EQUITY</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commitments and contingencies</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Shares of membership interests, $10.00 par value as may be reduced (i)&nbsp;under a distribution reinvestment plan, (ii)&nbsp;for
volume discounts, or (iii)&nbsp;for reductions in selling commissions Authorized: 21,555,756 shares; Issued and outstanding: 200 shares as of Feb 28, 2011</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total liabilities and member&#146;s equity</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE> <P STYLE="font-size:120px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:120px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="font-size:120px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:100px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><I>See accompanying notes to Balance Sheets </I></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-14
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="fin147678_8"></A>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(a development stage enterprise) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO BALANCE SHEET </B></FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ORGANIZATION AND BUSINESS OPERATIONS </B></FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Equipment Leasing Fund Two, LLC ( the &#147;Fund&#148;), a Delaware limited liability company, was formed on January&nbsp;19, 2011 for the
purpose of being an equipment leasing program that will acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. The majority of the equipment will be leased to corporate clients. The Fund will generate
income through the collection of lease rentals and other revenues and through the sale of leased equipment and other portfolio investments. The Fund has selected March&nbsp;31 as its fiscal year end, until such time as the Fund achieves its initial
closing date, whereupon the fiscal year end shall become December&nbsp;31. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The manager of the Fund is Macquarie Asset Management Inc. (the
&#147;Manager&#148;), a member of the Macquarie Group of companies which is comprised of Macquarie Group Limited and its subsidiaries and affiliates worldwide (the &#147;Macquarie Group&#148;). Macquarie Group Limited is headquartered in Australia
and is listed on the Australian Stock Exchange. The Manager will earn fees by providing or arranging all services necessary and desirable for the operations of the Fund, including those relating to equipment acquisitions and disposals, asset
management and administrative, reporting and regulatory services. Further, the Fund will reimburse the Manager for costs incurred by them in managing the Fund and the Fund&#146;s portfolio of equipment, equipment lease and other equipment-related
investments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The initial capitalization of the Fund was $2,000 from its Manager. The Fund is offering membership interests on a &#147;<I>best
efforts</I>&#148; basis with the intention of raising up to $214,000,004 of equity. Until the Fund receives and accepts subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering, no fees will be payable
by the Fund to the Company. If the Fund does not receive subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering, all subscription funds deposited by the subscribers shall be returned to those
subscribers together with any interest earned thereon and without deduction for fees, commissions or expenses. If the Fund receives and accepts subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering,
the Fund expects the share offering period to last for up to 24 months from the date of the offering. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund is considered to be a
development stage enterprise as no operations have commenced. Its sole activity through February 28, 2011 consisted of the organization and start-up of the Fund. </FONT></P> <P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNIFICANT ACCOUNTING POLICIES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Basis
of Accounting and Use of Estimates </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The financial statements have been prepared in conformity with accounting principles generally accepted
in the United States of America. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
Actual results could differ from those estimates. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Cash and Cash Equivalents </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The&nbsp;Fund considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents are maintained with one
financial institution. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Development Stage Enterprise </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Company complies with the reporting requirements of Accounting Standards Codification (&#147;ASC&#148;) 915, <I>Developmen</I>t <I>Stag</I>e <I>Entities</I>. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-15
</FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(a development stage enterprise) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO BALANCE SHEET&#151;(continued) </B></FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>New Accounting Pronouncements </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Fund does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the Balance Sheet. </FONT></P>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TRANSACTIONS WITH AFFILIATES </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">As
discussed in Note&nbsp;1, the Fund will pay fees to the Manager for providing or arranging all services necessary for its operations, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting
and regulatory services. Until the Fund receives and accepts subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering, no fees will be payable by the Fund to the Company. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Capital (USA) Inc. (the &#147;Dealer Manager&#148;) will act as dealer manager for the Fund and will manage a group of selling dealers,
including other unaffiliated broker dealers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund will pay the Manager and the Dealer Manager fees for services provided to the Fund
during the offering period including: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Selling commission of up to 7% of the offering proceeds from each share sold by the Dealer Manager or selling dealers, payable to the Dealer Manager
(and re-allowed to unaffiliated selling dealers); </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Due diligence expense reimbursement up to 0.5% of the offering proceeds from each share sold, payable to the Dealer Manager (and re-allowed to
unaffiliated selling dealers); </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dealer manager fees of 3% of the offering proceeds from each share sold, payable to the Dealer Manager; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Organization and offering expense allowance, which varies based upon the number of shares sold, payable to the Manager. Organization and offering
expense allowance is calculated as follows: </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#161;</FONT>
</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"></FONT></FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.4% of the offering proceeds from each share sold for the first 3,500,000 shares; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#161;</FONT>
</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"></FONT></FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.0% of the offering proceeds from each share sold for shares sold that exceed 3,500,000 but amount to 10,000,000 or fewer shares; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="font-family:ARIAL" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#161;</FONT>
</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"></FONT></FONT></TD>
<TD WIDTH="2%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.72% of the offering proceeds from each share sold for shares sold that exceed 10,000,000 shares. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund will pay the Manager and its affiliates fees for operating services performed during the offering period and on an on-going basis once the Fund
has commenced operations, including: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition fees of 3% of the purchase price that the Fund pays for each item of equipment or direct or indirect interest in equipment acquired,
including under lease agreements, trading transactions, residual value guarantees, pay per use agreements, forward purchase agreements, total return swaps, participation agreements, options, other equipment-related transactions, joint ventures,
special purpose vehicles and other company arrangements; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Asset management fees equal to the lesser of: (a)&nbsp;(i)&nbsp;5% of gross rental payments from non-full payout leases (except that 1% of gross rental
payments shall be payable with respect to non-full payout leases for which management services are performed by non-affiliates under the Company&#146;s supervision); (ii)&nbsp;2% of gross rental payments from full payout leases which contain net
lease provisions; and (iii)&nbsp;7% of gross rental payments from equipment for which the Fund provides services in addition to equipment management relating to the continued and active operation of the Fund&#146;s equipment such as,
</FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-16
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(a development stage enterprise) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>NOTES TO BALANCE SHEET&#151;(continued) </B></FONT></P> <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P><FONT STYLE="font-family:Times New Roman" SIZE="2">
but not limited to, ongoing marketing and re-leasing of equipment and hiring or arranging for the hiring of crews or operating personnel for the Fund&#146;s equipment and similar services; or
(b)&nbsp;the amount of fees which are competitive for similar services; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Re-leasing fees depending upon the rental payments generated from equipment that is re-leased after lease expiration. Re-leasing fees are calculated as
an amount equal to the lesser of: (i)&nbsp;2% of gross rental payments derived from the re-lease of equipment after the time that the re-lease of such equipment has been consummated to a different lessee as a result of the efforts of the Company or
its affiliates; or (ii)&nbsp;re-leasing fees that are competitive for comparable services for similar equipment transactions; provided, however, that no re-leasing fees shall be paid if the Company receives asset management fees equal to 7% of the
gross rental payments; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Remarketing fees in the amount equal to the lesser of (i)&nbsp;3% of the purchase price paid to the Fund by the purchaser of the investment, or
(ii)&nbsp;one-half of reasonable, customary and competitive brokerage fees paid for services rendered in connection with the sale of equipment of similar size, type and location. Payment of remarketing fees shall be subordinated until such time when
investor return has been achieved. &#147;Investor return&#148; means such time when the aggregate amount of distributions to the members equals, as of any determination date, an amount equal to an eight percent (8.0%)&nbsp;per annum internal rate of
return compounded annually on all capital contributions of members; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Out-performance fees depending upon the extent to which investor return has been achieved Prior to the time that investor return is achieved, cash
distributions will be made 99.0% to the Fund&#146;s members and 1.0% to the Company. After the time that investor return is achieved, cash distributions will be made 80.0% to the Fund&#146;s members and 20.0% to the Company; and
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Reimbursement of operating expenses depending upon the scope of services the Manager provides to the Fund. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:18px;margin-top:0px;margin-bottom:0px">&nbsp;</P>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>EQUITY CONTRIBUTION </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager has made
an initial equity contribution of $2,000 to the Fund for 200 shares of membership interests ($10 per share). </FONT></P>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">F-17
</FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:20px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>APPENDIX A </B></FONT></P>
<P STYLE="font-size:35px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>MACQUARIE EQUIPMENT LEASING
FUND TWO, LLC </B></FONT></P> <P STYLE="margin-top:35px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>A Delaware Limited Liability Company </B></FONT></P>
<P STYLE="margin-top:120px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B><A NAME="toc147678_64"></A>LIMITED LIABILITY COMPANY OPERATING AGREEMENT </B></FONT></P>
<P STYLE="margin-top:120px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Dated as of January 19, 2011 </B></FONT></P> <P STYLE="font-size:24px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TABLE OF CONTENTS </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="90%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_1">ARTICLE 1. DEFINITIONS.</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-1</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_2">ARTICLE 2. ORGANIZATION.</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-13</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_3">Formation</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-13</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_4">Name</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-13</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_5">Registered Office; Registered Agent; Principal Office; Other Offices; Address of
Members</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-13</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_6">Purposes</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-13</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.5</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_7">Types of Equipment</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-14</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.6</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_8">Powers</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-14</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.7</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_9">Foreign Qualification</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-14</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.8</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_10">Term</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-14</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.9</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_11">No State-Law Partnership</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-14</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_12">ARTICLE 3. MEMBERS AND CAPITAL. </A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-15</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_13">The Initial Member</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-15</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_14">Members</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-15</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_15">Fund Capital</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-16</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_16">Capital Accounts</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-16</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.5</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_17">Loans by Members</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-17</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.6</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_18">No Right to Return of Capital</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-17</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_19">ARTICLE 4. MANAGER. </A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-17</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_20">Powers and Duties</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-17</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_21">Limitations on the Exercise of Powers of Manager</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-20</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_22">Reliance on Reports and Information by Manager</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-22</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_23">Limitation of Liability</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-23</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.5</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_24">Right to Indemnification</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-23</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.6</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_25">Compensation of the Manager and its Affiliates</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-24</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">4.7</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_26">Other Interests of the Manager and its Affiliates</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-26</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_27">ARTICLE 5. POWERS AND LIABILITIES OF MEMBERS. </A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-26</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_28">No Control Over Fund Business</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-26</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_29">Limited Liability</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-26</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_30">ARTICLE 6. DISTRIBUTIONS AND ALLOCATIONS. </A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-27</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_31">Distributions of Cash</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-27</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_32">Allocations of Profits and Losses</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-27</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_33">Tax Allocations; Code Section 704(c); Revaluations</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-30</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_34">Distributions and Allocations Among the Members</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-31</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.5</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_35">Compliance with NASAA Guidelines Regarding Front-End Fees</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-32</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.6</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_36">Return of Uninvested Capital Contribution</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-32</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.7</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_37">Members&#146; Return of Investment in the Fund</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-32</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.8</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_38">No Distributions in Kind</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-32</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.9</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_39">Fund Entitled to Withhold</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-32</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_40">ARTICLE 7. WITHDRAWAL OF THE MANAGER. </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-33</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_41">Voluntary Withdrawal</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-33</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_42">Involuntary Withdrawal</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-33</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_43">Consequences of Withdrawal</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-33</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">7.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_44">Continuation of Fund Business</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-34</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_45">ARTICLE 8. TRANSFER OF UNITS. </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-34</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_46">Member Withdrawal</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-34</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_47">Assignment</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-34</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">i </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="4%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="88%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_48">Substitution</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-36</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_49">Status of an Assigning Member</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-36</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.5</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_50">Repurchase of Shares Held by Foreign Partners</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-36</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.6</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_51">Redemption of Shares</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-37</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.7</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_52">Cancellation of Shares</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-37</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">8.8</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_53">Shares by Assignment</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-37</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_54">ARTICLE 9. DISSOLUTION AND WINDING-UP.</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_55">Events Causing Dissolution</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_56">Winding-Up of the Fund; Capital Contribution by the Manager Upon Dissolution</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-38</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_57">Application of Liquidation Proceeds Upon Dissolution</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-39</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_58">ARTICLE 10. FISCAL MATTERS AND REPORTS. </A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-39</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_59">Title to Property and Bank Accounts</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-39</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_60">Maintenance of and Access to Basic Fund Documents</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-39</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_61">Accounting Decisions</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-40</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_62">Reports</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-41</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.5</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_63">Tax Returns and Tax Information</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.6</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_64">Federal Tax Elections</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.7</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_65">Tax Matters Partner</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.8</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_66">Reports to Federal and State Authorities</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-43</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">10.9</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_67">Special Direction and Consent Regarding Possible Issuance of Final Regulations Affecting Issuance of
 Partnership Interests for Services</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-44</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_68">ARTICLE 11. MEETINGS AND VOTING RIGHTS OF THE MEMBERS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-44</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_69">Meetings of the Members</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-44</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">11.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_70">Voting Rights of the Members</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-45</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_71">ARTICLE 12. AMENDMENTS. </A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-45</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">12.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_72">Amendments by the Manager</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-45</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">12.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_73">Amendments with the Consent of the Majority Interest</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-46</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_74">ARTICLE 13. SPECIAL POWER OF ATTORNEY</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-46</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">13.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_75">Execution of Power of Attorney</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-46</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">13.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_76">Amendments to Agreement and Certificate of Formation</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-46</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">13.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_77">Special Power of Attorney</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-46</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="3"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_78">ARTICLE 14. GENERAL PROVISIONS</A></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.1</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_79">Notices</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.2</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_80">Reliance by Third Parties</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.3</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_81">Entire Agreement</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.4</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_82">Effect of Waiver or Consent</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.5</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_83">Binding Effect</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.6</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_84">Governing Law</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.7</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_85">Further Assurances</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.8</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_86">Waiver of Certain Rights</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.9</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_87">Notice to and Consent of Members</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.10</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_88">Counterparts</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.11</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_89">Headings</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.12</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_90">Remedies</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.13</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_91">Severability</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">14.14</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A HREF="#appatoc147678_92">Certain Conventions</A></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">ii </FONT></P>



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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">This LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this
&#147;Agreement&#148;) of MACQUARIE EQUIPMENT LEASING FUND TWO, LLC, a Delaware limited liability company (the &#147;Fund&#148;), is executed as of the </FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex"></SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2">[x] day of January, 2011 by and among the Fund and Macquarie Asset Management, Inc., as its Manager and the Initial
Member. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>WITNESSETH: </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the Fund was formed by the filing of a Certificate of Formation with the Secretary of the State of Delaware on January [x], 2011; and </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">WHEREAS, the parties hereto wish to enter into this Agreement in order to set forth their binding agreement as to the affairs of the
Fund, the conduct of its business and certain rights with respect to the relationship among the parties hereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">NOW
THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
</FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_1"></A>ARTICLE 1. DEFINITIONS. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">As used in this Agreement, the following terms shall (unless otherwise expressly provided herein) have the following meanings:
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Acquisition Expenses&#148; shall mean expenses related to the selection acquisition and documentation of Investments
and potential Investments, including but not limited to (i)&nbsp;legal fees and expenses, (ii)&nbsp;travel and communications expenses, (iii)&nbsp;costs of credit reports, appraisals, valuations, inspections, searches and reference materials used to
evaluate transactions, (iv)&nbsp;non-refundable option payments on equipment and other personal property, (v)&nbsp;administrative and clerical expenses, (vi)&nbsp;accounting, tax and auditing fees and expenses, and (vii)&nbsp;miscellaneous other
expenses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Acquisition Fees&#148; shall mean the total of all fees and commissions paid by any party in connection with
the initial purchase of Investments. Any commission, selection fee, financing fee, nonrecurring management fee, or other similar fee, however designated, shall be included in the computation of Acquisition Fees. Acquisition Fees shall not include
Acquisition Expenses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Act&#148; shall mean the Delaware Limited Liability Company Act (6 Del.C. &#167; 18-101, et
seq.), as amended from time to time, or any successor statute thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Adjusted Capital Account Deficit&#148; shall
mean, with respect to any Member, the deficit balance if any, in such Member&#146;s Capital Account as of the end of the Fund taxable year, after giving effect to the following adjustments: (a)&nbsp;crediting to such Capital Account any amounts
which such Member is obligated to restore or is deemed to be obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and (b)&nbsp;debiting from such Capital Account the items described in Regulations
Section&nbsp;1.704-1(b)(2)(ii)(d)(4),(5) and (6). This definition is intended to comply with the provisions of Section&nbsp;1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Adjusted Capital Contribution&#148; means, as to any Member, as determined from time to time, the Member&#146;s Capital
Contribution reduced, but not below zero, by: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) all distributions previously made to the Member by the Fund
which are deemed by the Manager to reduce the Member&#146;s Capital Contribution; and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-1
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) all payments previously made to the Member in Redemption of a portion or
all of the Member&#146;s Shares under Section&nbsp;8.5 or 8.6. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Administrator&#148; shall mean the official or agency
administering the securities laws of a state. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Affiliate&#148; shall mean with respect to any Person: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) any other Person directly or indirectly controlling, controlled by or under common control with such Person;
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) any other Person owning or controlling 10% or more of the outstanding voting securities of such Person;
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) any officer, director or partner of such Person; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) if such other Person is an officer, director or partner, any company which such Person acts in such capacity.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Affiliated Investment&#148; shall mean any Investment in which the Manager, any of its Affiliates or any Program either
has or in the past has had an interest, but excluding any Joint Venture. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Affiliated Member&#148; shall mean any
officer, employee or securities representative of the Manager or any Affiliate of the Manager or of any Selling Dealer who is admitted as a Member at a Closing. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Agreement&#148; shall mean this Limited Liability Company Operating Agreement, as the same may hereafter be amended, supplemented or restated from time to time. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Applicable Redemption Price&#148; shall mean, with respect to any Share, the following amount (determined as of the date of
redemption of such Share): </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) during the Offering Period, the lesser of (i)&nbsp;$9.30 per Share and
(ii)&nbsp;$9.00 per share for shares purchased under the DRP, in all cases, unless such redemption is requested due to the verifiable death or permanent disability of the Member, in which case the amount shall be (i)&nbsp;the lesser of $10.00 per
Share and (ii)&nbsp;$9.00 per share for shares purchased under the DRP, in all cases minus cash distributions received and distributions used to purchase shares under the DRP; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) during the Operating Period, the lesser of (i)&nbsp;$9.50 per Share and (ii)&nbsp;$9.00 per share for shares purchased
under the DRP, in all cases plus a 5% annual return for each full twelve (12)&nbsp;month period of membership, minus cash distributions received and distributions used to purchase shares under the DRP; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) during the Liquidation Period, a price per Share equal to the net asset value per Share as of the date of redemption,
as determined by the Manager. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">For purposes of this Agreement, (i)&nbsp;the death of a Member shall be verified by the
delivery to the Fund by the Member&#146;s representative of a valid death certificate, certified by the appropriate medical or government authority, and (ii)&nbsp;permanent disability of a Member shall be verified by delivery to the Fund by the
Member or the Member&#146;s representative of the opinion of an impartial, reputable physician declaring that the Member is unable to continue, or obtain, employment indefinitely due to a physical or mental disability or illness that has existed for
a continuous period of at least six months. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Asset Management Fee&#148; shall mean the fee payable to the Manager and
its Affiliates for actively managing the leasing of the Fund&#146;s Equipment equal to the lesser of: (a)&nbsp;(i)&nbsp;5% of Gross Rental Payments from Non-Full Payout Leases (except that 1% of Gross Rental Payments shall be payable with respect to
Non-Full Payout Leases for which management services are performed by non-Affiliates under the Manager&#146;s supervision); </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-2
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
(ii)&nbsp;2% of Gross Rental Payments from Full Payout Leases which contain Net Lease provisions; and (iii)&nbsp;7% of Gross Rental Payments from Equipment for which the Fund provides services in
addition to Equipment management relating to the continued and active operation of the Fund&#146;s Equipment such as, but not limited to, ongoing marketing and re-leasing of Equipment and hiring or arranging for the hiring of crews or operating
personnel for the Fund&#146;s Equipment and similar services; or (b)&nbsp;the amount of fees which are competitive for similar services. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Assignee&#148; shall mean any Person to whom any Shares have been Assigned, in whole or in part, in a manner permitted by Section&nbsp;8.2 of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Assignment&#148; shall mean, with respect to any Shares, the offer, sale, assignment, transfer, gift or other disposition of, such
Share, whether voluntarily or by operation of law, except that in the case of a bona fide pledge or other hypothecation, no Assignment shall be deemed to have occurred unless and until the secured party has exercised his right of foreclosure with
respect thereto; and the terms &#147;Assign&#148; and &#147;Assigning&#148; have a correlative meaning. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Capital
Account&#148; shall mean the capital account maintained for each Member pursuant to Section&nbsp;3.4 of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Capital Contributions&#148; shall mean (a)&nbsp;as to the Manager, its $2,000 cash contribution, plus any additional amounts as may
be contributed by the Manager and (b)&nbsp;as to any other Member, the gross amount of the investment in the Fund actually paid by such Member for Shares, without deduction for Front-End Fees. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Cash Distributions&#148; shall mean, with respect to the Members, distributions of Cash Flow made to such Members by the Fund
during the Offering Period and Operating Period on a monthly basis equal to the aggregate amount of such Members&#146; Capital Contributions (as such Capital Contributions are reduced by any amounts of uninvested Capital Contributions distributed to
such Members pursuant to Section&nbsp;6.6, by any amounts paid to such Members for the redemption of such Members&#146; Shares pursuant to Sections 8.5 and 8.6 and by distributions in any prior month in excess of one-twelfth of the Cash Distribution
Rate on such Members&#146; Capital Contributions) times one-twelfth of the Cash Distribution Rate. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Cash Distribution
Rate&#148; shall mean the rate of distributions to be paid on a Member&#146;s Capital Contributions as determined by the Manager, in the Manager&#146;s sole discretion. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Cash Flow&#148; shall mean cash on hand derived from operating the Fund and the Sale of Fund Investments and shall include Reserves. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Certificate&#148; has the meaning specified in Section&nbsp;2.1 of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Closing&#148; shall mean the admission of Members to the Fund in accordance with Section&nbsp;3.2 of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Closing Date&#148; shall mean any date on which any Member shall be admitted to the Fund, which may occur on the Initial Closing
Date or any subsequent Closing Date up to and including the Final Closing Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Code&#148; shall mean the Internal
Revenue Code of 1986, as amended, and in effect from time to time, or corresponding provisions of subsequent federal revenue laws. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Consent&#148; shall mean either (a)&nbsp;consent given by vote at a meeting called and held in accordance with the provisions of Section&nbsp;11.1 of this Agreement or (b)&nbsp;the written consent
without a meeting, as the case may be, of any Person to do the act or thing for which the consent is solicited, or the act of granting such consent, as the context may require. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-3
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Controlling Person&#148; shall mean, with respect to the Manager or any of its
Affiliates, any of its chairmen, directors, presidents, or other executive or senior officers, any holder of a 5% or larger equity interest in the Manager or any such Affiliate, or any Person having the power to direct or cause the direction of the
Manager or any such Affiliate, whether through the ownership of voting securities, by contract or otherwise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Dealer
Manager&#148; shall mean Macquarie Capital (USA) Inc., an Affiliate of the Manager, and any successor thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Dealer
Manager Fees&#148; shall mean the fee payable by the Fund to the Dealer Manager in an amount equal to $0.30 per Share sold. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Discount Rate&#148; is the discount rate that, when applied to (i) the minimum rental payments under a Lease, plus (ii) the
estimated fair value of the Equipment to the lessor at the end of the Lease term, causes the aggregate present value at the beginning of the Lease term to equal the purchase price of the Equipment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Dissolution Event&#148; has the meaning specified in Section&nbsp;9.1 of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Distribution Reinvestment Plan&#148; or &#147;DRP&#148; shall mean a plan adopted by the Fund to allow Members to purchase
additional Shares with distributions received from the Fund. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Due Diligence Expenses&#148; shall mean the fees and
expenses actually incurred for bona fide, detailed and itemized, accountable due diligence efforts expended in connection with the Offering. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Effective Date&#148; shall mean the date the Registration Statement is declared effective by the SEC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Equipment&#148; shall mean the equipment acquired and owned by the Fund to be leased or sold by the Fund to others, as well as rights relating to equipment (including residual rights) and related
property, real or personal, acquired by the Fund, or in which the Fund has acquired a direct or indirect interest (including pursuant to any lease agreements, trading transactions, residual value guarantees, forward purchase agreements, total lease
return swaps, participation agreements, equipment purchase options, pay per use agreements or other equipment related transactions) of the types described in Section&nbsp;2.5 of this Agreement, and shall also be deemed to include other tangible and
intangible real or personal property which at any time is owned in fee simple or subject to a Lease. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;ERISA&#148; shall
mean the Employee Retirement Income Security Act of 1974, as amended. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Escrow Account&#148; shall mean an
interest-bearing account established and maintained by the Manager with the Escrow Agent, in accordance with the terms of the Escrow Agreement, for the purpose of holding, pending the distribution thereof in accordance with the terms of this
Agreement, any Subscription Funds received from subscribers, including Persons who are to be admitted as Members as a result of the Closing occurring on the Initial Closing Date. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Escrow Agent&#148; shall mean Wells Fargo Bank or another United States banking institution with at least $50,000,000 in assets,
which shall be selected by the Manager to serve in such capacity pursuant to the Escrow Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Escrow
Agreement&#148; shall mean that certain Escrow Agreement between the Fund, the Manager, the Dealer Manager and the Escrow Agent, substantially in the form filed as an exhibit to the Registration Statement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Final Closing Date&#148; shall mean the last Closing Date on which any Member (other than a Substitute Member) shall be admitted to
the Fund, which shall be as soon as practicable following the Termination Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;FINRA&#148; shall mean the Financial
Industry Regulatory Authority. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fiscal Period&#148; shall mean any interim accounting period established by the Manager
within a Fiscal Year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fiscal Quarter&#148; shall mean, for each Fiscal Year, the three-calendar-month period which
commences on the first day of such Fiscal Year or any of each subsequent three-calendar-month period. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-4
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fiscal Year&#148; shall mean the fiscal year of the Fund, which shall: </FONT></P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">until such time as the Initial Closing Date is achieved, commence on each April 1 and end on each March 31; and </FONT></TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">upon the Initial Closing Date, the fiscal year end shall commence on each January&nbsp;1 and end on each December 31, </FONT></TD></TR></TABLE>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">provided, however, that (a)&nbsp;in the case of the Fund&#146;s first fiscal year, &#147;Fiscal Year&#148; shall mean the period from and including the
date on which the Fund is formed under the Act to and including the immediately following December&nbsp;31 and (b)&nbsp;the final &#147;Fiscal Year&#148; of the Fund shall end on the date on which the winding up of the Fund is completed. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Front-End Fees&#148; shall mean fees and expenses paid by any Person for any services rendered during the Fund&#146;s organization
and offering or acquisition phases including Selling Commissions, Due Diligence Reimbursements, Dealer Manager Fee, O&amp;O Expense Allowance, Acquisition Fees, Acquisition Expenses and all other similar fees however designated. Notwithstanding the
foregoing, Front-End Fees shall not include any Acquisition Fees or Acquisition Expenses paid by a manufacturer of Equipment to any of its employees unless such Persons are Affiliates of the Manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Full-Payout Lease&#148; shall mean any lease pursuant to which the aggregate non-cancelable rental payments (which shall not
include payment for services to be provided under the lease, such as asset management, maintenance and other services) due during the initial term of such lease, on a net present value basis using the Discount Rate, are sufficient to permit the Fund
to recover the Purchase Price of the Equipment subject to such lease. A Full-Payout Lease includes any agreement, arrangement or other understanding (such as agreements for hire, use or bailment agreements) entered into or acquired by the Fund,
whether directly by the Fund or indirectly through one or more Persons and regardless of whether such lease is documented as a lease agreement or similar document or of an interest in the residual value of the Equipment that is the subject of such
agreement, arrangement or other understanding, including, without limitation, lease agreements, pay per use agreements, residual value guarantees, forward purchase agreements, total return swaps, participation agreements, options, and other
Equipment related transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fund&#148; shall mean Macquarie Equipment Leasing Fund Two, LLC. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fund Loan&#148; has the meaning specified in Section&nbsp;4.1(e)(ix) of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fund Minimum Gain&#148; has the same meaning as the term &#147;partnership minimum gain&#148; in Treas. Reg. Sections 1.704-2(b)(2)
and (d). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Fund Nonrecourse Deductions&#148; shall have the same meaning as the term &#147;nonrecourse deductions&#148;
in Treas. Reg. Sections 1.704-2(b)(1) and 1.704-2(c). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Gross Asset Value&#148; shall mean, with respect to any asset of
the Fund, the asset&#146;s adjusted tax basis, except that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) the initial Gross Asset Value of any asset
contributed by a Member to the Fund shall be the fair market value of such asset on the date of contribution; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the Gross Asset Values of all Fund assets shall be adjusted to equal their respective gross fair market values at such
times as the Members&#146; Capital Accounts are adjusted pursuant to Section&nbsp;3.4(g) hereof; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) the Gross
Asset Value of any Fund asset distributed to any Member shall be the gross fair market value of such asset on the date of distribution; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) to the extent not otherwise reflected in the Members&#146; Capital Accounts, the Gross Asset Values of Fund assets shall be increased (or decreased) to appropriately reflect any adjustments to the
adjusted basis of such assets pursuant to Code Section&nbsp;734(b) or Code Section&nbsp;743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treas. Reg.
Section&nbsp;1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this paragraph (d)&nbsp;to the extent that an adjustment pursuant to paragraph (b)&nbsp;above is required in connection with a
transaction that would otherwise result in an adjustment pursuant to this paragraph (d); and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-5
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) if on the date of contribution of an asset or a revaluation of an asset
in accordance with (b)-(d)&nbsp;above, the adjusted tax basis of such asset differs from its fair market value, the Gross Asset Value of such asset shall thereafter be adjusted by reference to the depreciation method described in Treas. Reg.
Section&nbsp;1.704-1(b)(2)(iv)(g)(3). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Gross Income&#148; shall mean the gross income of the Fund within the meaning of
Section&nbsp;61(a) of the Code. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Gross Offering Proceeds&#148; shall mean the aggregate gross amount of Capital
Contributions made by the Members other than the Initial Member in the Offering. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Gross Rental Payments&#148; shall mean
revenue or income from any and all sources with respect to a Lease or similar document including, but not limited to, (a)&nbsp;rental, royalty, lease, hire, license, usage, service, charter and other payments made by Lessees under or otherwise with
respect to Leases or similar documents whether or not pledged to a Lender and including such payments assigned for direct payment to such Lenders and (b)&nbsp;interest earned on funds on deposit for the Fund (other than Subscription Funds). Gross
Rental Payments includes receipts from any and all sources (whether received by the Fund or by a Lender) with respect to any Full- Payout Lease or Non-Full Payout Lease, as applicable, (including late payment charges and payments made by guarantors)
regardless of whether (a)&nbsp;such receipts are pledged or assigned for payment to a Lender by the Fund, the Lessee or a third party or (b)&nbsp;title to the Equipment is held by the Lessee, the Fund, a Lender or another Person. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Gross Share Price&#148; shall mean the gross purchase price paid by a Member for his Shares, which shall be $10.00 for each whole
Share purchased by a Member; provided, however, that for Members who purchase Shares from a broker who does not charge a Selling Commission or who charges a reduced Selling Commission, or for whom, based on established volume discounts, the amount
of Selling Commissions is reduced, the Gross Share Price is an amount per share equal to (i)&nbsp;$10.00 less (ii)&nbsp;the amount by which the Selling Commission is reduced (or $9.30 if no Selling Commission is charged) and provided further, that
for Members who purchase Shares pursuant to the DRP, the Gross Share Price is $9.00 per Share. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Impermissible
Purpose&#148; has the meaning specified in Section&nbsp;10.2(c) of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Indebtedness&#148; shall mean, with
respect to any Person as of any date, all obligations of such Person (other than capital, surplus, deferred income taxes and, to the extent not constituting obligations, other deferred credits and reserves) that could be classified as liabilities
(exclusive of accrued expenses and trade accounts payable incurred in respect of property purchased in the ordinary course of business which are not overdue or which are being contested in good faith by appropriate proceedings and are not so
required to be classified on such balance sheet as debt) on a balance sheet prepared in accordance with generally accepted accounting principles as of such date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Independent Director&#148; means a director who at the time of appointment to the Manager&#146;s board of directors is not, and within the last two years has not been, directly or indirectly
associated with the Manager or its Affiliates by virtue of (i)&nbsp;ownership of an interest in the Manager or its Affiliates; (ii)&nbsp;employment by the Manager or its Affiliates; (iii)&nbsp;service as an officer or director of the Manager&#146;s
Affiliates; (iv)&nbsp;performance of services, other than as a director, for the Fund; or (v)&nbsp;maintenance of a material business or professional relationship with the Manager or any of its Affiliates. A business or professional relationship is
considered material if the gross revenue derived by the director from the Manager and its Affiliates exceeds 5% of either the director&#146;s annual gross revenue during either of the last two years or the director&#146;s net worth on a fair market
value basis. An indirect relationship shall include circumstances in which a director&#146;s spouse, parents, children, siblings, mothers or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with the
Manager, any of its Affiliates or the Fund. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-6
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Initial Closing Date&#148; shall mean the first Closing Date for the Fund on which
Members holding in the aggregate Shares equal to, or greater than, the Minimum Offering are admitted to the Fund, and which shall be not later than fifteen (15)&nbsp;days after Subscription Funds are released from the Escrow Account to the Fund.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Initial Member&#148; shall mean the Manager. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Investments&#148; shall mean the Fund&#146;s portfolio of Equipment and Leases and any interest of the Fund in Equipment and Leases of any nature whatsoever, whether such interest is owned directly
or indirectly, through the ownership of equity or other instruments, whether held through a nominee, Joint Venture, partnership or otherwise, including, without limitation, lease agreements, pay per use agreements, trading transactions, residual
value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options, other Equipment related transactions, or any other agreement evidencing an interest in Equipment and Leases and in any
related matters. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Investment in Equipment&#148; shall mean the aggregate amount of Capital Contributions and
Indebtedness actually paid or allocated to the purchase, manufacture or renovation of Equipment acquired by the Fund, together with other cash payments such as interest, taxes and Reserves allocable thereto, but excluding Front-End Fees. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Investor Return&#148; shall mean the time when the aggregate amount of distributions to the Members equals, as of any determination
date, an amount equal to a pre-tax eight percent (8.0%)&nbsp;per annum internal rate of return compounded daily on all Capital Contributions of Members, calculated on the date of distribution and taking into account all Capital Contributions and all
distributions, such amount including the aggregate amount of such Members&#146; Capital Contributions. Income earned on escrowed funds and distributed to Members and amounts paid or withheld for taxes on a Member&#146;s behalf may be taken into
account in determining whether Investor Return has been achieved. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Involuntary Withdrawal&#148; shall mean, with respect
to the Manager, the removal or involuntary withdrawal of the Manager from the Fund pursuant to Section&nbsp;7.2 of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;IRA&#148; shall mean an Individual Retirement Account and its related funding vehicle. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;IRS&#148; shall mean the Internal Revenue Service or any successor agency thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Joint Venture&#148; shall mean any syndicate, group, pool, partnership, limited liability company, business trust or other unincorporated organization <B></B>or other transaction structure through
or by means of which the Fund acts jointly with any Program or with any Affiliate or non-Affiliated Person to make Investments. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Lease&#148; shall mean any Full-Payout Lease and any Non-Full Payout Lease and any residual value interest therein, including
pursuant to any lease agreements, pay per use agreements, residual value guarantees, forward purchase agreements, total return swaps, participation agreements, options, or other Equipment related transactions. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Lender&#148; shall mean any Person that lends cash or cash equivalents to the Fund, including any Person that acquires by purchase,
assignment or otherwise an interest in the future rents payable under any Lease and in the related Equipment, and any property securing, any such transaction. A Lender includes any Person that lends cash or cash equivalents to the Fund or any other
Person in connection with a transaction whereby the Person so lending acquires by purchase, assignment or otherwise an interest in the future rents payable under any Lease and in the related Equipment, and any property securing, any such
transaction. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Lessee&#148; shall mean a lessee, hirer, user, licensee, bailee, charterer or similar person under a
Lease. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-7
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Liquidation Period&#148; shall mean the period commencing on the first day following
the end of the Operating Period and continuing for the amount of time deemed necessary by the Manager for orderly termination of its operations and affairs and liquidation or disposition of the Fund&#146;s Investments and other assets and the
realization of the maximum proceeds therefor, which period is expected to continue for twelve (12)&nbsp;months beyond the end of the Operating Period but which shall last no longer than thirty-six (36)&nbsp;months beyond the end of the Operating
Period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Liquidator&#148; has the meaning specified in Section&nbsp;9.2(a)(i). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Majority&#148; or &#147;Majority Interest&#148; shall mean Members owning more than 50% of the aggregate outstanding Shares.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Manager&#148; shall mean Macquarie Asset Management Inc, a Delaware corporation or any other Person which succeeds it
in such capacity as provided for in this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Maximum Offering&#148; shall mean receipt and acceptance by the
Fund of subscriptions by Persons eligible to purchase the total number of Shares registered pursuant to the Registration Statement on or before the Final Closing Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Member&#148; shall mean any Person who is the owner of Shares and who has been admitted to the Fund as a Member and any Person who becomes a Substitute Member in accordance with this Agreement.
There shall be one class of members, whose interests in the Fund shall consist of up to the number of Shares outstanding on the Final Closing Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Member Nonrecourse Debt&#148; has the same meaning as the term &#147;partner nonrecourse debt&#148; in Treas. Reg. Section&nbsp;1.704-2(b)(4). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Member Nonrecourse Debt Minimum Gain&#148; shall mean an amount, with respect to each Member Nonrecourse Debt, equal to the Fund
Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treas. Reg. Section&nbsp;1.704-2(i)(3). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Member Nonrecourse Deductions&#148; shall have the same meaning as the term &#147;partner nonrecourse deductions&#148; in Treas. Reg. Sections 1.704-2(i)(1) and 1.704-2(i)(2). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Membership List&#148; shall mean a list, in alphabetical order by name, setting forth the name, address and business or home
telephone number of, and number of Shares held by, each Member. The list shall be printed on white paper in a readily readable type size (in no event smaller than 10-point type) and shall be updated at least quarterly to reflect any changes in its
information. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Minimum Offering&#148; shall mean receipt and acceptance by the Fund of subscriptions resulting in at
least $1,200,000 in Subscription Funds. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;NASAA Guidelines&#148; shall mean the Statement of Policy regarding Equipment
Programs adopted by the North American Securities Administrators Association, Inc., as in effect on the date of the Prospectus. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Net Lease&#148; shall mean a Lease under which the Lessee assumes responsibility for, and bears the cost of, insurance, taxes,
maintenance, repair and operation of the leased asset and where the non-cancellable rental payments pursuant to such Lease are absolutely net to the Fund. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Net Offering Proceeds&#148; shall mean the Gross Offering Proceeds minus Front-End Fees. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-8
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Net Worth&#148; shall mean, with respect to a Person, the excess of total assets over
total liabilities as determined by generally accepted accounting principles, except that if any such assets have been depreciated, then the amount of depreciation relative to any particular asset may be added to the depreciated cost of such asset to
compute total assets. The amount of depreciation may be added only to the extent that the amount resulting after adding such depreciation does not exceed the fair market value of such asset. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Non-Full Payout Lease&#148; shall mean any lease, entered into or acquired from time to time by the Fund, pursuant to which the
aggregate non-cancellable rental payments (which shall not include payment for services to be provided under the lease, such as asset management, maintenance and other services) during the initial term of such lease, on a net present value basis
using the Discount Rate, are not sufficient to permit the Fund to recover the Purchase Price of the Equipment subject to such lease. A Non-Full Payout Lease includes any agreement, arrangement or other understanding (such as agreements for hire, use
or bailment agreements) entered into or acquired by the Fund, whether directly by the Fund or indirectly through one or more Persons and regardless of whether such lease is documented as a lease agreement or similar document or of an interest in the
residual value of the Equipment that is the subject of such agreement, arrangement or other understanding, including, without limitation, lease agreements, pay per use agreements, residual value guarantees, forward purchase agreements, total return
swaps, participation agreements, options, other Equipment related transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Nonrecourse Liability&#148; has the
meaning set forth in Treas. Reg. Section&nbsp;1.704-2(b)(3). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Notice&#148; shall mean a writing containing the
information required by this Agreement to be communicated to any Person. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;O&amp;O Expense Allowance&#148; shall mean up
to $0.240 per Share for the first 3,500,000 Shares sold; $0.200 per Share for Shares sold that exceed 3,500,000 Shares but do not exceed 10,000,000 Shares; $0.172 per Share for Shares sold in excess of 10,000,000 Shares; and in each case including
shares sold pursuant to the DRP and to the Manager or its Affiliates. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Offering&#148; shall mean the offering of Shares
pursuant to the Prospectus. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Offering Period&#148; shall mean the period from the Effective Date to the Termination
Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Operating Expenses&#148; shall mean and include (a)&nbsp;all costs of personnel (including officers or employees
of the Manager or its Affiliates other than Controlling Persons) involved in the business of the Fund, allocated pro rata to their services performed on behalf of the Fund, but excluding overhead expenses attributable to such personnel; (b)&nbsp;all
costs of borrowed money, taxes and assessments on Investments and other taxes applicable to the Fund; (c)&nbsp;legal, audit, accounting, brokerage, appraisal, valuation, search and other fees; (d)&nbsp;printing, engraving and other expenses and
taxes incurred in connection with the issuance, distribution, transfer, registration and recording of documents evidencing ownership of an interest in the Fund or in connection with the business of the Fund; (e)&nbsp;fees and expenses paid to
independent contractors, bankers, brokers and services, leasing agents and sales personnel consultants and other equipment management personnel, insurance brokers and other agents; (f)&nbsp;expenses (including the cost of personnel as described in
(a)&nbsp;above) in connection with the disposition, replacement, alteration, repair, refurbishment, leasing, managing, invoicing, recording, tracking, registration, licensing, re-leasing, re-licensing, financing, refinancing and operation of
Equipment (including the costs and expenses of insurance premiums, brokerage and leasing and licensing commissions, if any, with respect to its Investments and the cost of maintenance of its Equipment); (g)&nbsp;expenses of organizing, revising,
amending, converting, modifying or terminating the Fund; (h)&nbsp;expenses in connection with distributions made by the Fund to, and communications and bookkeeping and clerical work necessary in maintaining relations with, its Members, including the
costs of printing and mailing to such Person evidences of ownership of Shares and reports of meetings of the Members and of preparation of proxy statements and solicitations of proxies in connection therewith and the costs associated with websites
and maintaining email accounts for Members; (i)&nbsp;expenses in connection with preparing and mailing reports required to be furnished to the Members for </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-9
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
investor, tax reporting or other purposes, and reports which the Manager deems it to be in the best interests of the Fund to furnish to the Members and to their sales representatives, including
the fees and expenses of a transfer agent and escrow agent; (j)&nbsp;any accounting, computer, statistical or bookkeeping costs necessary for the maintenance of the books and records of the Fund; (k)&nbsp;the cost of preparation and dissemination of
the informational material and documentation relating to potential sale, refinancing or other disposition of Equipment; (l)&nbsp;the costs and expenses incurred in qualifying the Fund to do business in any jurisdiction, including fees and expenses
of any resident agent appointed by the Fund; (m)&nbsp;the costs incurred in connection with any litigation, mediation, arbitration or regulatory proceedings in which the Fund is or may become involved; and (n)&nbsp;all other costs and expenses
necessary to operate the Fund. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Operating Period&#148; shall mean the period commencing with the Initial Closing Date
and ending five (5)&nbsp;years after the Final Closing Date; provided, however, that such period may be extended, by Notice to the Members, at the discretion of the Manager for a further period of not more than an additional twelve (12)&nbsp;months.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Operations&#148; shall mean all operations and activities of the Fund except Sales. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Organization and Offering Expenses&#148; shall mean expenses incurred in preparing the Fund for registration and subsequently
offering the Shares to the public, including all forms of compensation paid to underwriters or broker-dealers or their Affiliates in connection with the Offering and all advertising expenses, except advertising expenses related to the leasing of
Equipment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Person&#148; shall mean any natural person, corporation, general partnership, limited partnership, limited
liability company, joint venture, trust, business trust, association, unincorporated organization, country, state, city or other political subdivision, governmental agency or instrumentality, or other entity. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Profits&#148; or &#147;Losses&#148; shall mean, for any Fiscal Year, the Fund&#146;s taxable income or loss for such Fiscal Year,
determined in accordance with Code Section&nbsp;703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section&nbsp;703(a)(1) shall be included in taxable income or loss), with the
following adjustments: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) any income of the Fund that is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses shall be applied to increase such taxable income or reduce such loss; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) any expenditure of the Fund described in Code Section&nbsp;705(a)(2)(B), or treated as such pursuant to Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing
Profits and Losses shall be applied to reduce such taxable income or increase such loss; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) gain or loss
resulting from a taxable disposition of any asset of the Fund shall be computed by reference to the Gross Asset Value of such asset and the special depreciation calculations described in Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv)(g), notwithstanding
that the adjusted tax basis of such asset may differ from its Gross Asset Value; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) in lieu of the
depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss for such Fiscal Year, there shall be taken into account depreciation, amortization or other cost recovery determined pursuant
to the method described in Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv)(g)(3); and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) any items which are
specially allocated pursuant to Section&nbsp;6.2(f) shall not be taken into account in computing Profits or Losses. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Program&#148; shall mean, in addition to the Fund, a limited or general partnership, joint venture, limited liability company,
unincorporated association or similar organization, formed or operated by the Manager or any of its Affiliates for the primary purpose of investment in and the operation of or gain from an interest in Equipment or Leases. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-10
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Prospectus&#148; shall mean the prospectus included as part of the Registration
Statement on Form S-1 in the final form in which such prospectus is filed with the SEC pursuant to Rule 424 under the Securities Act and as thereafter supplemented or amended pursuant thereto. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Purchase Price&#148; shall mean, with respect to any Investment, the gross price paid by, or on behalf of, the Fund, including the
cash paid, Indebtedness incurred, assumed or to which the Fund&#146;s share of proceeds from the Lease, re-lease, Lease renewal or Equipment sale are subject, and the amount of the related Acquisition Fees on such Investment, plus that portion of
the reasonable, necessary and actual expenses incurred by the Manager or any of its Affiliates in acquiring Investments on an arm&#146;s length basis with a view to transferring such Investments to the Fund, which is allocated to the Investments in
question in accordance with allocation procedures employed by the Manager or such Affiliate from time to time. With respect to any Investment sold by the Fund, &#147;Purchase Price&#148; shall mean the price paid to the Fund, including the cash
paid, Indebtedness incurred, assumed or to which the buyer&#146;s share of proceeds from the Lease, re-lease, Lease renewal or Equipment sale are subject. Purchase Price shall also include, with respect to options or forward purchase agreements to
acquire Equipment or any interest therein, the sum of the exercise price (including Indebtedness that would be assumed if the option were concurrently exercised) and the price to acquire the option or forward purchase agreement. Notwithstanding the
foregoing, Purchase Price shall not include points or prepaid interest. Purchase Price, with respect to any Investment, including, but not limited to, a residual interest, a Joint Venture interest or an option to acquire a residual interest, may
include the Indebtedness incurred, assumed or to which the Fund&#146;s share of proceeds from the Lease, re-lease, Lease renewal or Equipment sale are subject, as well as the aggregate payments associated with such residual interest, joint venture
interest or an option to acquire a residual interest. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Qualified Plan&#148; shall mean a pension, profit-sharing or
stock bonus plan, including employee trusts, employer IRAs, Keogh Plans and corporate retirement plans meeting the requirements of Sections 401 et seq. of the Code, as amended. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Qualified Subscription Account&#148; shall mean the interest-bearing account established and maintained by the Fund for the purpose
of holding, pending the distribution thereof in accordance with the terms of this Agreement, of Subscription Funds received from Persons who are to be admitted as Members as a result of Closings to be held subsequent to the Initial Closing Date.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Registration Statement&#148; shall mean the registration statement for the Shares on Form S-1 filed with the SEC under
the Securities Act which registration statement was declared effective by the SEC. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Re-Leasing Fees&#148; shall mean a
fee in an amount not to exceed the lesser of: (i)&nbsp;2% of Gross Rental Payments derived from the re-lease of Equipment after the time that the re-lease of such Equipment has been consummated to a different Lessee as a result of the efforts of the
Manager or its Affiliates; or (ii)&nbsp;the competitive rate charged by others for comparable services for similar equipment transactions; provided, however, that no Re-Leasing Fees shall be paid if the Manager receives Asset Management Fees equal
to 7% of the Gross Rental Payments pursuant to Section&nbsp;4.6(h) of this Agreement and provided further that Re-Leasing Fees shall only be paid as each rental payment is made over the term of the lease. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Re-Marketing Fees&#148; shall mean the fee payable to the Manager in the amount equal to the lesser of (i)&nbsp;3% of the Purchase
Price paid to the Fund by the purchaser of the Investment, or (ii)&nbsp;one-half of reasonable, customary and competitive brokerage fees paid for services rendered in connection with the sale of equipment of similar size, type and location.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Reserves&#148; shall mean reserves established by the Fund for working capital and contingent liabilities, including
repairs, replacements, contingencies, accruals required by lenders for insurance, compensating balances required by lenders and other appropriate items, in an amount determined by the Manager. Upon the disposition of each Investment, any cash
reserve which was specifically allocated to that Investment need not be maintained thereafter, but may be applied as reserves for other Investments. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-11
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Sale&#148; shall mean the sale, exchange, involuntary conversion, foreclosure,
condemnation, taking, casualty (other than a casualty followed by refurbishing or replacement), or other disposition of any of the Fund&#146;s Investments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;SEC&#148; shall mean the United States Securities and Exchange Commission. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Selling Commissions&#148; has the meaning specified in Section&nbsp;4.6(c) of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Schedule A&#148; shall mean Schedule A attached to, and made a part of, this Agreement, which sets forth the names, addresses,
Capital Contributions and number of Shares owned by the Members, as amended or supplemented from time to time to add or delete, as the case may be, such information with respect to any Member. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Secondary Market&#148; has the meaning specified in Section&nbsp;8.2(c) of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Securities Act&#148; shall mean the Securities Act of 1933, as amended. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Selling Dealer&#148; shall mean each member firm of FINRA which has been selected by the Dealer Manager to offer and sell Shares
and which has entered into a Selling Dealer Agreement with the Dealer Manager. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Selling Dealer Agreement&#148; shall
mean each of the agreements entered into between the Dealer Manager and any Seller Dealer, each substantially in the form filed as an exhibit to the Registration Statement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Share&#148; shall mean a membership interest in the Fund. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Subscription Agreement&#148; shall mean the Subscription Agreement substantially in the form attached as an exhibit to the
Prospectus. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Subscription Funds&#148; shall mean the funds received from a subscriber in respect of a purchase of
Shares. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Substitute Member&#148; shall mean any Assignee of Shares who is admitted to the Fund as a Member pursuant to
Section&nbsp;8.3 of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Substitute Manager&#148; shall mean any successor to the Manager admitted to the
Fund in accordance with Article 7 of the Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Syndication Expenses&#148; shall mean all expenditures classified
as syndication expenses pursuant to Treasury Regulations Section&nbsp;1.709-2(b), including, but not limited to, O&amp;O Expense Allowance. Syndication Expenses shall be taken into account under this Agreement at the time they would be taken into
account under the Fund&#146;s method of accounting if they were deductible expenses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Tax&#148; or &#147;Taxes&#148;
shall mean all federal, state, local or foreign net or gross income, gross receipts, net proceeds, real property transfer, sales, use, ad valorem, value added, franchise, unincorporated business, bank shares, withholding, payroll, employment,
excise, property, alternative or add-on minimum, environmental or other taxes, assessments, duties, fees, levies or other governmental charges of any nature whatever, whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Tax Matters Partner&#148; shall mean the Person designated pursuant to
Section&nbsp;6231(a)(7) of the Code to manage administrative and judicial tax proceedings conducted at the Fund level by the IRS with respect to Fund matters. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Term&#148; has the meaning specified in Section&nbsp;2.8 of this Agreement. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Termination Date&#148; shall mean the earliest of (a)&nbsp;the date on which the
Maximum Offering has been sold, (b)&nbsp;twelve (12)&nbsp;months following the Effective Date provided that such twelve-month period may be extended at the discretion of the Manager for a further period of not more than an additional twelve
(12)&nbsp;months and (c)&nbsp;the termination of the Offering by the Manager at any time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Treasury Regulation&#148; or
&#147;Treas. Reg.&#148; shall mean final or temporary regulations issued by the United States Treasury Department pursuant to the Code. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#147;Voluntary Withdrawal&#148; shall mean, with respect to the Manager, the voluntary withdrawal from the Fund of the Manager as the Manager of the Fund, or the voluntary sale, assignment, encumbrance
or other disposition of all of the Manager&#146;s Shares pursuant to Section&nbsp;7.1 of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#147;Withdrawal&#148; shall mean, with respect to the Manager, the voluntary or involuntary withdrawal of such Manager. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_2"></A>ARTICLE 2. ORGANIZATION. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_3"></A>2.1 <B>Formation.</B> The Fund has been formed as a Delaware limited liability company by the execution and filing of a Certificate of Formation (as the same may be amended
from time to time, the &#147;Certificate&#148;) by an authorized person as required by the Act. The rights, powers, duties, obligations and liabilities of the Members (in their respective capacities as such) shall be determined pursuant to the Act
and this Agreement. To the extent that the rights, powers, duties, obligations and liabilities of any Member (in its capacity as such) are different by reason of any provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_4"></A>2.2 <B>Name.</B> The name of
the Fund shall be Macquarie Equipment Leasing Fund Two, LLC, and all business of the Fund shall be conducted in that name or in such other names that comply with applicable law as the Manager may select from time to time. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_5"></A>2.3 <B>Registered Office; Registered Agent; Principal Office; Other Offices; Address of Members. </B>The
registered office of the Fund required by the Act to be maintained in the State of Delaware shall be the office of the initial registered agent named in the Certificate or such other office (which need not be a place of business of the Fund) as the
Manager may designate from time to time in the manner provided by law. The registered agent of the Fund in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person or Persons as the Manager may
designate from time to time in the manner provided by law. The principal office of the Fund shall be at such place as the Manager may designate from time to time, which need not be in the State of Delaware, and the Fund shall maintain its books and
records at such principal office. The Fund may have such other offices as the Manager may designate from time to time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
places of residence of the Members shall be those addresses set forth opposite their respective names in Schedule A, as such may be supplemented or amended from time to time. Any Member may change his, her or its respective place of residence by
giving Notice of such change to the Fund, which Notice shall be effective five (5)&nbsp;
days after receipt. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_6"></A>2.4 <B>Purposes.</B> The Fund has been organized for the purposes of:
(a)&nbsp;acquiring, investing in, purchasing, owning, acquiring or granting options or obligations or rights to purchase, holding, leasing, hiring, renting, licensing, bailing, chartering, sub-leasing, re-leasing, financing, taking beneficial,
economic or equitable interests in, refinancing, borrowing, managing, maintaining, operating, trading, improving, upgrading, modifying, exchanging, assigning, encumbering, creating security interests in, pledging, selling, transferring or otherwise
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">disposing of, and in all respects otherwise dealing in, or with, and taking any action incidental or related to, Equipment and any other type
of direct or indirect interest (including residual interests, which encompass, among </FONT></P>
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other things, the right to Equipment rental and sales proceeds after the payout of debt associated with the Equipment) in Equipment and Leases of all kinds and purchasing equity interests in
Equipment-owning entities or entities owning direct or indirect interests in Equipment; and (b)&nbsp;establishing, acquiring, conducting and carrying on any business suitable, necessary, useful or convenient in connection therewith. Subject to the
provisions of this Agreement, the Fund shall have the power and authority to take any and all actions necessary, appropriate, advisable, desirable or incidental to or for the furtherance and accomplishment of the foregoing purposes. Notwithstanding
anything herein to the contrary, nothing set forth herein shall be construed as authorizing the Fund to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of
Delaware. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_7"></A>2.5 <B>Types of Equipment. </B>The Equipment acquired by the Fund shall be selected
from among new or used: (a)&nbsp;transportation equipment such as aeronautical, maritime, rail and road transportation; (b)&nbsp;construction, mining and manufacturing equipment; (c)&nbsp;utilities equipment; (d)&nbsp;technological equipment such as
semiconductor, information technology, telecommunications, scientific and medical and other technological equipment; and (e)&nbsp;any other types of equipment which the Manager believes may meet the Fund&#146;s investment objectives. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_8"></A>2.6 <B>Powers.</B> In furtherance of the above purposes, the Fund shall have the power, directly or
indirectly: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) to acquire, invest in, purchase or make future commitments to purchase, own, acquire or grant
options or obligations or rights to purchase, hold, lease, hire, rent, license, bail, charter, sub-lease, re-lease, finance, refinance, borrow, manage, maintain, operate, trade, invest in, improve, upgrade, modify, exchange, assign, encumber, create
security interests in, take economic, beneficial or equitable interests in, pledge, sell, transfer or otherwise dispose of, and in all respects otherwise deal in or with and take any action incidental or related to, Equipment and Leases; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) to enter into Joint Ventures, partnerships and other business, financing and legal and beneficial ownership
arrangements with respect to Equipment and Leases; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) to purchase and hold trust certificates, debt
securities and equity securities issued by any Person; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) to lend and borrow money, to issue and accept
evidences of indebtedness in respect thereof, and to secure the same by mortgages or pledges or grants of liens on, or other security interests in, Investments of the Fund and accept such kinds and amounts of security for loans, leases and other
arrangements it makes to others as the Manager shall deem appropriate; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) to do all things, carry on any
activities and enter into, perform, modify, supplement or terminate any contracts necessary to, connected with, or incidental to, or in furtherance of, the purposes of the Fund consistent with the terms of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_9"></A>2.7 <B>Foreign Qualification.</B> Prior to the Fund&#146;s conducting business in any jurisdiction other
than Delaware where qualification is necessary, the Manager shall use its reasonable efforts to cause the Fund to comply (to the extent that procedures for doing so are available and such compliance is reasonably within the control of the Manager in
the relevant jurisdiction) with all requirements necessary to qualify the Fund as a foreign limited liability company in such jurisdiction. At the request of the Manager, each Member shall execute, acknowledge, swear to and deliver all certificates
and other instruments in conformity with this Agreement that are necessary or appropriate to qualify, continue or terminate the Fund as a foreign limited liability company in each such jurisdiction in which the Fund may conduct business from time to
time. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_10"></A>2.8 <B>Term.</B> The term of the Fund commenced on January 19, 2011 and shall terminate
at midnight on December&nbsp;31, 2030, unless sooner dissolved as provided in Article 9. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_11"></A>2.9
<B>No State-Law Partnership.</B> The Members intend that the Fund shall not be a partnership (including, without limitation, a limited partnership) or joint venture, and that no Member or Manager shall be a partner or joint venturer of any other
Member or Manager, for any purposes other than federal, and if applicable, state tax purposes, and this Agreement shall not be construed to the contrary. Notwithstanding the immediately preceding sentence, the Members intend that the Fund shall be
treated as a partnership for federal tax and, if applicable, </FONT></P>
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state income tax and local income tax purposes, and each Member and the Fund shall file all Tax returns, and otherwise take all Tax and financial reporting positions, in a manner consistent with
such treatment. Neither the Members nor the Fund shall make any election under Treas. Reg. &#167;301.7701-3, or any comparable provisions of state or local law, to treat the Fund as an entity other than a partnership for federal tax or state or
local income tax purposes. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_12"></A>ARTICLE 3. MEMBERS AND CAPITAL. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_13"></A>3.1 <B>The Initial Member.</B> The Manager has contributed $2,000 in cash to the Fund. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_14"></A>3.2 <B>Members. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Any Person desiring to become a Member shall execute and deliver to the Manager a Subscription Agreement pursuant to
which, among other things, such Person shall agree to be bound by all terms and provisions of this Agreement, and such other documents as the Manager shall request, which shall be in form and substance satisfactory to the Manager. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Unless more stringent standards are required by an Administrator (which standards shall be disclosed in the
Prospectus) each Member shall either (i)&nbsp;a minimum annual gross income of $70,000 and a minimum Net Worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or (ii)&nbsp;minimum Net Worth of $250,000 (calculated
exclusive of home, home furnishings and automobiles). In the case of fiduciary accounts, these minimum standards must be met by the beneficiary, the fiduciary account, or by the donor or grantor who directly or indirectly supplies the funds to
purchase the Shares if the donor or grantor is the fiduciary. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Each Person desiring to become a Member
shall make a Capital Contribution, in cash, in an amount equal to the Gross Share Price to the capital of the Fund for each Share or fraction thereof purchased. From the date hereof to, but not including, the Initial Closing Date, all Subscription
Funds shall be deposited into the Escrow Account. All eligible subscribers must purchase a minimum of five hundred (500)&nbsp;Shares. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) The Manager retains the unconditional right to refuse to admit any subscriber as a Member for any reason whatsoever. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) No subscribers shall be admitted to the Fund unless and until the Minimum Offering is achieved. Upon the determination
by the Manager that the Minimum Offering has been achieved, the Manager shall set the Initial Closing Date. Following the Initial Closing Date, weekly or more frequent Closings may be held. As promptly as is practicable following the admission of
each subscriber as Member, the Manager shall send or cause to be sent a confirmation of purchase to each Member. Subscribers who tender Subscription Funds and who are accepted as Members shall be admitted not later than the last day of the calendar
month following the date their subscription was accepted. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) The Manager and any Affiliate of the Manager
shall have the right to subscribe for Shares for its own account and for investment purposes only. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) From
and after the Initial Closing Date, all Subscription Funds shall be held by the Fund in a Qualified Subscription Account until the release thereof on the applicable Closing Date. Subscriptions for Shares received after the Initial Closing Date shall
promptly be accepted or rejected by the Manager after their receipt by the Fund (but in any event not later than 30 days thereafter) and the Manager shall send or cause to be sent a confirmation of receipt thereof to the subscriber. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) On the Initial Closing Date or any subsequent Closing Date, whichever may be applicable, all Subscription Funds then
held in the Escrow Account or any Qualified Subscription Account, as the case may be, together with any interest earned thereon, shall be released to the Fund. If the number of Shares subscribed for as of the Termination Date are insufficient to
constitute the Minimum Offering, all Subscription Funds deposited by any subscriber shall be returned, together with any interest earned thereon and without deduction for any Front-End Fees, to such subscriber. Any Subscription Funds deposited by
any </FONT></P>
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subscriber who is not accepted by the Manager to become a Member shall be promptly returned, together with any interest earned thereon and without deduction for any Front-End Fees, to such
subscriber. In no event shall any Subscription Funds be held in the Escrow Account or a Qualified Subscription Account for more than one year beyond the Effective Date before either being released to the Fund upon a Closing or returned to the
subscriber. Notwithstanding the foregoing, no interest will be paid on any Subscription Funds returned unless said Subscription Funds have been held in the Escrow Account or any Qualified Subscription Account for at least 21 days. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) Each Person whose subscription is accepted by the Manager shall be admitted to the Fund as a Member within fifteen
(15)&nbsp;days after Subscription Funds have been released from the Escrow Account and shall for all purposes of this Agreement be treated as a Member on the Initial Closing Date. If the Person&#146;s subscription is accepted after the Initial
Closing Date, the Person shall be admitted as a Member on or before the last day of the calendar month following the date the subscription was accepted by the Fund. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) The amount of the Capital Contribution made by each Member is set forth on Schedule A hereto, as such may be
supplemented or amended from time to time, which shall be no less frequently than quarterly; provided, however, that any failure to amend Schedule A following any Closing Date shall not in any way affect the admission of any Member to the Fund if
such Member was duly and properly admitted to the Fund as a result of such Closing. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(k) No subscriber shall be
admitted to the Fund until such time that at least five (5)&nbsp;business days have lapsed since the subscriber received the Prospectus. In making such a determination, Manager shall be entitled to rely on representations made by subscribers and
Selling Dealers regarding the timing and receipt of the Prospectus. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_15"></A>3.3 <B>Fund Capital. </B>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) No Member shall be paid interest on any Capital Contribution (except any interest earned on Subscription
Funds as provided in Section&nbsp;3.2(h)). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) No Member shall have the right to withdraw or receive any
return of such Member&#146;s Capital Contribution, except as specifically provided in this Agreement, and no Capital Contribution may be returned to any Member in the form of property other than cash. Except as provided in Article 8 hereof, the Fund
shall not repurchase any Shares. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Except as otherwise specifically provided herein, no Member shall have
priority over any other Member as to: (i)&nbsp;the return of such Member&#146;s Capital Contribution or Capital Account; (ii)&nbsp;such Member&#146;s share of Profits and Losses; or (iii)&nbsp;such Member&#146;s share of distributions of Cash Flow.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Neither the Manager nor any of its Affiliates shall have any personal liability for the repayment of the
Capital Contribution of any Member except to the extent as may be set forth in this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_16"></A>3.4 <B>Capital Accounts. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) A separate Capital Account shall be established and maintained for each Member. A Member who owns Shares in the Fund
shall have a single Capital Account that reflects all such Shares, regardless of the time or manner in which such Shares were acquired. The initial Capital Account balance of each Member shall be the amount of such Member&#146;s Capital
Contribution. No Member shall be required to make any Capital Contribution in addition to the Gross Share Price paid for such Member&#146;s Shares pursuant to the Offering. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The initial Capital Account balance of the Manager shall be $2,000. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) The Manager shall not be required to make any Capital Contributions except pursuant to and in accordance with
Section&nbsp;7.3(a)(iii)(B) of this Agreement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) The Capital Account of each Member shall be increased by:
(i)&nbsp;the amount of any additional money contributed by such Member to the Fund (including under the DRP); and (ii)&nbsp;allocations to such Member of Profits (or items thereof), and items of income or gain specially allocated pursuant to
Section&nbsp;6.2(f) hereof. </FONT></P>
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The Capital Account of each Member shall be decreased by: (i)&nbsp;the amount of money distributed to or on behalf of such Member by the Fund; (ii)&nbsp;if a liquidating trust is utilized
pursuant to Section&nbsp;6.8, the fair market value of any property distributed to such trust for the benefit of such Member by the Fund (net of liabilities secured by such distributed property that such Member is considered to assume or take
subject to under Code Section&nbsp;752); (iii)&nbsp;allocations to such Member of expenditures described in Code Section&nbsp;705(a)(2)(B); and (iv)&nbsp;allocations to such Member of Losses (or items thereof), and items of expense, loss or
deduction specially allocated pursuant to Section&nbsp;6.2(f) hereof. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) If a Share is sold or otherwise
transferred, the Capital Account of the transferor with respect to such Share shall carry over to the transferee in accordance with Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv)(l). </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) For any taxable year in which the Fund has a Code Section&nbsp;754 election in effect, the Capital Accounts shall be
maintained in accordance with Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv)(m). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) Upon the occurrence of the
events specified in Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv)(f), the Members&#146; Capital Accounts shall be adjusted and thereafter maintained to reflect the revaluation of Fund assets on the books of the Fund in accordance with such Treasury
Regulation and Treas. Reg. Sections 1.704-1(b)(2)(iv)(g) and (h); provided, however, that, other than upon liquidation of the Fund within the meaning of Treas. Reg. Section&nbsp;1.704-1(b)(2)(ii)(g), such an adjustment shall be made only if the
Manager determines in its sole discretion that such an adjustment is necessary to reflect the relative economic interests of the Members in the Fund. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(h) Notwithstanding anything herein to the contrary, the Members&#146; Capital Accounts shall at all times be maintained in the manner required by Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv), and any
questions or ambiguities arising hereunder shall be resolved by reference to such Treasury Regulations. Further, such Treasury Regulations shall govern the maintenance of the Capital Accounts to the extent this Agreement is silent as to the
treatment of a particular item. In the event Treas. Reg. Section&nbsp;1.704-1(b)(2)(iv) shall fail to provide guidance as to how adjustments to the Capital Accounts should be made to reflect particular adjustments to the capital on the books of the
Fund, such Capital Account adjustments shall be made in a manner that is consistent with the underlying economic arrangement of the Members and is based, wherever practicable, on federal tax accounting principles. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) Distributions shall be applied first to satisfy the Investor Return which has been accrued but not paid and then as a
return of the Member&#146;s Capital Contributions. For these purposes, contributions and distributions made on or before the 15th day of the month shall be treated as having been made on the 1st day of such month, and contributions and distributions
made after the 15th day of the month shall be treated as having been made on the 1st day of the following month. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_17">
</A>3.5 <B>Loans by Members. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">No loan by any Member or any Affiliate of any Member to the Fund (including, without
limitation, any Fund Loan) shall constitute a Capital Contribution to the Fund or increase the Capital Account balance of any Member, but shall be treated, for all purposes, as Indebtedness of the Fund payable or collectible only out of the assets
of the Fund in accordance with the terms and conditions upon which such loan was made. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_18"></A>3.6
<B>No Right to Return of Capital. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">No Member shall be entitled to demand any distribution of or with respect to such
Member&#146;s Capital Contribution or Capital Account. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_19"></A>ARTICLE 4. MANAGER. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_20"></A>4.1 <B>Powers and Duties. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Subject to the terms and conditions of this Agreement, the Manager, on behalf of the Members, shall have the sole and
exclusive right and authority to manage and control the business and affairs of the Fund, and shall possess all rights and powers of a &#147;manager&#148; of a limited liability company as provided in
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-17
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
the Act and otherwise by law. Except as otherwise expressly provided for herein, the Members hereby agree to the exercise by the Manager of all such powers and rights conferred on them by the Act
with respect to the management and control of the Fund. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The Manager shall have responsibility as a
fiduciary for the safekeeping and use of all funds and assets of the Fund, whether or not in its immediate possession or control, and shall not employ, or permit any other Person to employ, such funds or assets in any manner other than as permitted
by this Agreement. Except as specifically herein stated or implied, the Manager may not contract away the fiduciary duty owed to such Members by the Manager. The Manager shall devote that amount of its time deemed necessary in its absolute
discretion to carry out its duties to the Fund. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) The Manager may employ the services of its Affiliates to
assist the Manager in its managerial duties. Where the services provided by the Manager&#146;s Affiliates are services not otherwise contemplated by Section&nbsp;4.6, the Manager may compensate all such Persons (or be reimbursed if such agreements
are made directly with the Manager) from the assets of the Fund at rates which are fair and reasonable; provided, however, that: (i)&nbsp;the compensation, price or fee payable to any of its Affiliates shall not exceed an amount which is comparable
and competitive with the compensation, price or fee which would be charged by non-Affiliates of the Manager to render comparable services which could reasonably be made available to the Fund upon comparable terms; (ii)&nbsp;all services for which
the Manager&#146;s Affiliates are to receive compensation from the Fund shall be embodied in a written contract which (A)&nbsp;accurately describes the services to be rendered and all compensation to be paid therefor and (B)&nbsp;is terminable by
either party without penalty upon 60 days written notice; and (iii)&nbsp;the Manager&#146;s Affiliates must be independently engaged in providing such services to Persons other than Affiliates and at least 75% of such Affiliates&#146; gross revenue
from providing such services must be derived from Persons other than the Manager or its Affiliates. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) The
Manager shall provide such personnel and services as the Manager may deem necessary or appropriate to conduct the business activities of the Fund and the day-to-day management of its assets. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) The conduct of the Fund&#146;s business shall be solely controlled by the Manager. The Manager shall have full power
and authority, subject to the provisions of this Agreement or as provided in the Act, to carry out and accomplish the purposes and functions of the Fund, including, by way of illustration but not by way of limitation, the power to: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">do all things necessary or advisable, as determined by the Manager, to effect the admission of Members, including, but not limited to, registering the Shares under the
Securities Act and effecting the qualification of, or obtaining exemptions from the qualification of, the Shares for sale with state securities regulatory authorities, and engaging the Dealer Manager to select Selling Dealers to offer and sell
Shares; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">acquire, purchase, make future commitments to purchase, invest in, own, acquire or grant options or obligations or rights to purchase, hold, lease, hire, rent, bail,
sub-lease, re-lease, trade, finance, refinance, borrow, manage, maintain, operate, improve, upgrade, modify, exchange, improve, combine, divide, assign, encumber, create security interests in, take economic, beneficial or equitable interest in,
pledge, sell, transfer or otherwise dispose of, and in all respects otherwise deal in or with and transact business with respect to interests in real and personal property of any and all kinds whatsoever, both tangible and intangible, including,
without limitation, Equipment, Leases, contract rights, lease rights, debt instruments and equity interests in corporations, partnerships (both limited and general), limited liability companies, joint ventures and other entities (including, but not
limited to, common and preferred stock, debentures, bonds and other securities of every kind and nature), and, in connection therewith, to execute, deliver, amend, modify and cancel documents and instruments relating to real and personal property of
whatever kind and description, including, but not limited to, mortgages, leases and other documents of title or conveyance, assumption agreements pertaining to such agreements, powers of attorney and other contracts, instruments and agreements of
all kinds, and contract with others, including Affiliates, to do the same on behalf of the Fund; </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-18
</FONT></P>


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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">maintain proper books of account for the Fund and prepare reports, statements and other relevant information for distribution to Members or governmental agencies in
accordance with applicable laws and regulations; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">expend Fund capital, invest all funds held by the Fund, assure the proper application of revenues of the Fund and determine the appropriate accounting method or methods
to be used by the Fund; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">open accounts, and deposit, withdraw and maintain funds in the name of the Fund in banks or savings and loan associations and designate the terms and conditions of such
deposits and draws thereon; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">borrow money or otherwise to procure extensions of credit for the Fund, including the sale or assignment of receivables of the Fund, and, if security is required
therefore, execute, seal, acknowledge and deliver agreements, promissory notes, guarantees and other written documents or instruments constituting obligations or evidences of Indebtedness and to pledge, hypothecate, mortgage, assign, transfer or
convey mortgages or security interests in the Equipment and Leases and other assets of the Fund, and prepay, refinance, increase, modify, consolidate or extend such security device, all of the foregoing at such terms and in such amounts as the
manager, in its sole and absolute discretion, deems to be in the best interests of the Fund; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">purchase or otherwise make Investments in its own name, an Affiliate&#146;s name, the name of a nominee or nominees, or a trust or trustees or otherwise temporarily
hold title thereto for the purpose of facilitating an Investment by the Fund; provided, however, that with respect to Affiliated Investments: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(A)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager determines that the Affiliated Investment is in the best interest of the Fund; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(B)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Affiliated Investment is acquired at a purchase price determined according to a pre-agreed mechanism as may be reasonably agreed to by the Manager;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">establish Reserves, which shall be in an amount not less than 1% of the Gross Offering Proceeds; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ix)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">loan or advance or cause its Affiliate to loan or advance funds to the Fund (each such loan or advance, a &#147;Fund Loan&#148;), provided that (i)&nbsp;any interest,
financing charges or fees payable by the Fund in connection with the Fund Loan shall not exceed amounts charged by unrelated lending institutions for the same purpose in the same geographic area; and (ii)&nbsp;the term of the Fund Loan does not
extend more than 12 months beyond the end of the Operating Period. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:17%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the Manager or any of its Affiliates
purchase Investments in its own name and with its own funds in order to facilitate ultimate purchase by the Fund, the Manager or an Affiliate, as the case may be, shall be deemed to have made a Fund Loan in an amount equal to the Purchase Price paid
for such Equipment and shall be entitled to receive interest on such amount in accordance with clause (A)&nbsp;above. Any advances made by the Manager or any of its Affiliates for the purpose of paying Organization and Offering Expenses shall not
constitute a Fund Loan, but shall be reimbursed to the Manager or such Affiliate (to the extent possible) from the O&amp;O Expense Allowance, without interest, in accordance with, and to the extent provided in, Section&nbsp;4.6(e) of this Agreement;
</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(x)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">cause the Fund to invest in (i)&nbsp;purchases of Equipment without having in place a concurrent lease agreement or sale agreement related to such Equipment; and
(ii)&nbsp;options or other obligations to purchase Equipment; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">adopt, amend and terminate a Distribution Reinvestment Plan on behalf of the Fund; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">purchase and maintain such insurance policies as the Manager, except as limited elsewhere in this Agreement, deems necessary or appropriate to protect
the interests of the Fund and the </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-19
</FONT></P>


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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P><FONT STYLE="font-family:Times New Roman" SIZE="2">
Manager, for the conservation of Fund assets, or for any purpose convenient or beneficial to the Fund, and the Manager and any Affiliate of the Manager and their respective employees and agents
may be named as additional insured parties thereunder, provided that the Manager pays any incremental costs associated with being added as an additional insured; </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xiii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">employ or contract with Persons in the operation and management of the Fund including, but not limited to, equipment management agents, insurance brokers, repairmen,
packers, transporters, cleaners, appraisers, valuers, architects and equipment lease brokers, engineers, contractors, attorneys, accountants, brokers, appraisers, escrow agents, printers, designers, transfer agents, tax accountants, accounting
advisors and auditors, and such other consultants, advisors, artisans and workmen as may be necessary or advisable, in the sole and absolute discretion of the Manager, for all such purposes described above, provided that no Person is employed to
provide duplicative services; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(xiv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">assure the doing of all other things necessary, convenient or advisable in connection with the supervision of the affairs, business and assets of the Fund, including
causing the Fund to pay Operating Expenses and Acquisition Expenses; and take all such actions and execute all such documents, agreements and other instruments as the Manager may deem necessary, convenient or advisable to accomplish or further the
purposes of the Fund or to protect and preserve Fund assets. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) The Board of Directors of the
Manager must consist of at least one Independent Director, except for a period of 90 days after the death, removal or resignation of an Independent Director. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_21"></A>4.2 <B>Limitations on the Exercise of Powers of Manager.</B> The Manager shall have no power to take any action prohibited by this Agreement or by the Act. Furthermore, the
Manager shall be subject to the following in the administration of the Fund&#146;s business and affairs: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a)
the Manager shall not operate the Fund in a manner which causes the Fund to be deemed an &#147;investment company&#148; as such term is defined in the Investment Company Act of 1940, as amended; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the Manager shall not enter into contracts that would bind the Fund after the expulsion, adjudication of bankruptcy or
insolvency of a Manager, or continue the business of the Fund with Fund assets after the occurrence of such an event; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) the Manager shall not alter the primary purpose of the Fund set forth in Article 2 without the Consent of a Majority Interest; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) neither the Manager nor any of its Affiliates shall engage in any transaction with the Fund which would circumvent the
provisions of this Agreement, or circumvent the restrictions herein against dealing with the Manager and its Affiliates, or that would make it impossible to carry on the ordinary business of the Fund; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) the Manager shall not confess a judgment against the Fund in connection with any threatened or pending legal action;
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) the Manager shall not possess any Equipment or assign the rights of the Fund in specific equipment for
other than a Fund purpose; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) the Manager shall not commingle the Fund&#146;s funds with those of any other
Person; provided, however, the Manager may establish a master fiduciary account pursuant to which separate subtrust accounts are established for the benefit of Programs that are Affiliates of the Fund if the Fund&#146;s funds are protected from
claims of such other Programs and/or their creditors. The prohibition of this Section shall not apply to investments meeting the requirements of Section&nbsp;4.2(l); </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) the Manager and its Affiliates shall not receive any rebates or give-ups and shall not participate in any reciprocal
business arrangement which would circumvent the provisions of this Agreement, or circumvent the restrictions herein against dealing with the Manager and its Affiliates; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-20
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) the Manager shall not directly or indirectly pay or award any
commissions or other compensation to any Person engaged by a potential investor for investment advice as an inducement to such advisor to advise the purchase of the Shares; provided; however, that this provision shall not prohibit the normal sales
commissions payable to, or reimburse the reasonable expenses of, a registered broker-dealer, or other properly licensed Person for selling the Shares; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(j) the Manager shall not cause the Fund to incur any Indebtedness wherein the lender would have or acquire any direct or indirect interest in the profit, capital or property of the Fund other than as a
secured creditor, or incur any Indebtedness specifically for the purpose of funding distributions; provided, however, that the Fund may enter into refinancing transactions with respect to its equipment and distribute net proceeds from any such
refinancing to the extent such refinancing is consistent with the Fund&#146;s investment objectives; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(k) the
Fund shall not exchange Shares for property other than cash; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(l) the Fund may not make investments in limited
partnership interests of other Programs; however, the Fund may make investments in other Programs or Joint Ventures with non-Affiliates which own and operate specific equipment and may make investments in Joint Ventures to the extent and in the
manner provided in Sections 4.2(m) and 4.2(v); </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(m) the Fund may make investments in Joint Ventures with other
Programs sponsored by the Manager if the following conditions are met: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager shall have determined that: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(A)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Investment is in the best interests of the Fund; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(B)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Investment shall not result in duplicate fees to the Manager or any of its Affiliates, and such investment shall not result in the impairment, abrogation or
circumvention of any of the terms of this Agreement; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">all other Programs participating in the Joint Venture have substantially identical investment objectives; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the compensation payable to the Manager arising from the investment in the Joint Venture is substantially identical for each Program; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Fund has the right of first refusal to buy the underlying Equipment held by the other Programs sponsored by the Manager the Joint Venture if the other Programs
desire to sell such Equipment; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Fund&#146;s investment is on substantially the same terms and conditions as the investments made in the Joint Venture by the other Programs;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Joint Venture agreement does not authorize the Fund to take any action with respect to the Investment that the Fund or the Manager could not do under the provisions
of this Agreement; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Joint Venture is entered into either for the purpose of effecting appropriate diversification of the Fund&#146;s portfolio or to purchase Equipment or Investments
made in accordance with Section&nbsp;4.2(r). </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Investment objectives of the Joint Venture are consistent with the Investment objectives of the Fund; </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(n) the Manager shall not allow the Fund to make loans to the Manager or its Affiliates; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(o) the Manager shall not provide financing to the Fund, other than as described in Section&nbsp;4.1(e)(ix); </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(p) the Fund shall not acquire Equipment or other Investments from a Program in which the Manager has an interest, other
than as described in Section 4.2(r); </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-21
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(q) the Fund shall not acquire from the Manager or an Affiliate Equipment or
other Investments, other than as described in Section&nbsp;4.2(r). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This provision shall not affect the right of the Fund to
invest in Joint Ventures under Section&nbsp;4.2(m) or (v); </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(r) the Fund shall not acquire from the Manager, an
Affiliate or a Program in which the Manager has an interest Equipment or other Investments which have been warehoused and acquired for the purpose of facilitating the acquisition of such Equipment or other Investments for the Fund, unless the
following conditions have been met: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Equipment or other Investments were not purchased by the Manager or Affiliate from another Affiliate; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Equipment or other Investments are held by the Manager or Affiliate on a temporary or interim basis only; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager has determined that the purchase of the Equipment or the other Investment is in the best interest of the Fund; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Equipment or Investment is purchased by the Fund for a price not greater than the cost of the Equipment or Investment to the Manager or Affiliate;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">there is no difference in interest terms with loans secured by the Equipment or Investment at the time acquired by the Manager or Affiliate than at the time acquired by
the Fund; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">no other benefit arises out of the transaction to the Manager apart from compensation otherwise permitted under this Agreement; and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">in the case of an acquisition from a Program in which the Manager has an interest, the acquisition is for the purpose of a Joint Venture with that Program which meets
the requirements set forth under Section 4.2(m). </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">This provision shall not affect the right of the Fund to
invest in Joint Ventures under Section&nbsp;4.2(m); </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(s) the Fund may not purchase or lease Equipment from or
sell or lease Equipment to the Manager, except as described in Section&nbsp;4.2(r) and except that the Fund may lease Equipment to the Manager under a lease arrangement made at the outset and on terms no more favorable to the Manager than those
offered to other Persons; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(t) the Fund may not grant an exclusive right to the Manager or an Affiliate to sell
Equipment on its behalf; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(u) the Fund shall not pay, directly or indirectly, a commission or fee (except as
permitted under this Agreement) to the Manager in connection with the reinvestment or distribution of Cash Flow; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(v) the Fund may make investments in Joint Ventures with Affiliates if the following conditions are met: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager has determined that the investment is in the Fund&#146;s best interests and will not result in duplicate fees to the Manager or its Affiliates or impair,
abrogate or circumvent any provisions of the this Agreement; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Joint Venture agreement does not authorize the Fund to do anything with respect to the Equipment that the Fund or the Manager could not do under the provisions of
this Agreement; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">a majority of the Manager&#146;s directors, including a majority of the Manager&#146;s Independent Directors, have approved the Joint Venture; and
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the investment objectives of the Joint Venture are consistent with the Fund&#146;s investment objectives. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_22"></A>4.3 <B>Reliance on Reports and Information by Manager.</B> In performing its duties, the Manager and its
Affiliates shall be fully protected in relying in good faith upon the provisions of this Agreement and on information, opinions, reports or statements of any Member, an officer, employee or agent of the Fund, or by any other Persons as to matters
the Manager reasonably believes are within such other Persons&#146; professional or expert </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-22
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
competence, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of the Fund or the value and amount of the assets or
reserves or contracts, agreements or other undertakings that would be sufficient to pay claims and obligations of the Fund or to make reasonable provision to pay such claims and obligations, or other facts pertinent to the existence and amount of
assets from which distributions to Members or creditors might properly be paid. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_23"></A>4.4
<B>Limitation of Liability. </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Neither the Manager nor any of its Affiliates shall be personally liable
under any judgment of a court, or in any other manner, for any debt, obligation or liability of the Fund, whether that liability or obligation arises in contract, tort or otherwise, solely by reason of being the Manager. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Neither the Manager nor any Affiliate of the Manager performing services on behalf of the Fund and acting with the
scope of the Manager&#146;s authority shall have any liability to the Fund or to any Member for any loss suffered by the Fund or the Member that arises out of any action or inaction of the Manager or its Affiliates if: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager and its Affiliates determined in good faith that the course of conduct or choice to take no action was in the best interest of the Fund;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager and its Affiliates were acting within the scope of authority on behalf of, or performing services for, the Fund; and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the course of conduct or inaction did not constitute negligence or misconduct of the Manager or its Affiliates. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_24"></A>4.5 <B>Right to Indemnification. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) The Fund shall indemnify the Manager and its Affiliates performing services on behalf of the Fund and acting within
the scope of the Manager&#146;s authority against all loses, judgments, expenses, and amounts paid in settlement of any claims sustained by them in connection with the Fund, provided that: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager and its Affiliates determined in good faith that the course of conduct or choice to take no action was in the best interest of the Fund;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager and its Affiliates were acting within the scope of authority on behalf of, or performing services for, the Fund; and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the course of conduct or inaction did not constitute negligence or misconduct of the Manager or its Affiliates. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Notwithstanding the foregoing, the Manager and its Affiliates shall not be indemnified by the Fund for any losses,
liabilities or expenses arising from or out of an alleged violation of federal or state securities laws unless: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">there has been a successful adjudication on the merits of each count involving securities law violations as to the particular indemnitee and a court of competent
jurisdiction has approved the indemnification of litigation costs; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee and a court of competent jurisdiction
has approved indemnification of the litigation costs; or </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) a court approves the settlement and finds that indemnification of the settlement and related costs should be made or (ii)&nbsp;a court approves indemnification of
litigation costs if a successful defense is made; and </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-23
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) The Manager or its Affiliate seeking indemnification may not be entitled
to indemnification for alleged violations of federal or state securities laws unless such indemnitee has advised the court regarding the current position of the Securities and Exchange Commission and any applicable state securities&#146;
administrator on the issue of indemnification for securities laws violations. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Any amounts payable pursuant
to this Section&nbsp;4.5 shall be recoverable solely out of the assets of the Fund and not from the Members. The Fund may not incur the cost of that portion of liability insurance which insures the Manager or its Affiliates for any liability as to
which the Manager or its Affiliates is prohibited from being indemnified under this Section&nbsp;4.5. Nothing in this Section&nbsp;4.5(d) shall prohibit the Manager from adding itself or its Affiliates as additional insureds to any policies covering
losses due to property or personal injury to non-Affiliates incurred during the normal operations of the Fund; provided, however, that Manager shall pay any incremental costs associated with being added as an additional insured. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_25"></A>4.6 <B>Compensation of the Manager and its Affiliates. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager and its Affiliates shall not, in their respective capacities as such, receive any salary, fees, profits, distributions,
commissions or other compensation (including in connection with the reinvestment or distribution of Cash Flow or from the proceeds from the sale, exchange or refinance of Investments), except in accordance with Section&nbsp;6.1(b), Section
4.1(e)(xiv) or this Section&nbsp;4.6; or pay or award any commissions or other compensation to any Person engaged by a potential Member as an investment advisor as an inducement to the Person to advise the potential Member about the Fund; provided,
however, that the payment of Dealer Manager Fees and Selling Commissions otherwise in accordance with this Section&nbsp;4.6 and the payment for attendance of conferences or trade shows are not prohibited hereby. Furthermore, the sum of all
Organization and Offering Expenses paid by the Fund shall not exceed fifteen percent (15%)&nbsp;of the Gross Offering Proceeds. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) The Manager shall be entitled to receive the allocations and distributions provided for under Article 6 and Section&nbsp;7.3, in addition to any allocations and distributions with respect to the
Shares it holds. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The Fund shall pay the Dealer Manager Fees to the Dealer Manager; provided, however, that
such Dealer Manager Fees shall not be payable with respect to any Shares sold pursuant to the DRP. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c)
Commissions in the amount of $0.70 per Share sold (&#147;Selling Commissions&#148;) shall be paid by the Fund to the Dealer Manager and each Selling Dealer with respect to the Shares sold by each of them; provided, however, that no Selling
Commissions shall be payable by the Fund with respect to Shares sold (i)&nbsp;to investors whose broker-dealer waives the Selling Commission; (ii)&nbsp;to broker-dealers participating in the Offering or any of their associated persons purchasing
shares for their own account or for their respective IRAs or Qualified Plans; or (iii)&nbsp;pursuant to the DRP. Further, Selling Commissions payable by the Fund shall be reduced by an amount as set out in the Prospectus with respect to Shares sold
according to established volume discounts. Selling Commissions must be paid in cash, if at all. Notwithstanding the foregoing, the Manager may agree with the Dealer Manager or any Selling Dealer to reduce the amount of Selling Commissions in certain
instances as the Manager may determine, so long as the Selling Commissions paid in such instances do not exceed the amount set forth herein. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) Due Diligence Expenses may, in the Manager&#146;s sole discretion, be reimbursed by the Fund to the Dealer Manager and each Selling Dealer, up to a maximum of 0.5% of Gross Offering Proceeds.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) The Fund shall pay to the Manager or its Affiliates immediately following each Closing Date the O&amp;O
Expense Allowance. The O&amp;O Expense Allowance will not exceed the actual Organization and Offering Expenses incurred by our Manager or any of its Affiliates. The Manager shall bear any Organization and Offering Expenses incurred by the Manager or
any of its Affiliates (including, without limitation, the Dealer Manager) in excess of the O&amp;O Expense Allowance. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(f) At such time as the Fund has entered into a binding contract to make an Investment and substantially all of the material conditions to the closing of such Investment have been satisfied, the Fund
shall pay the Manager or its Affiliates, for services rendered in connection with acquiring the Investment, an Acquisition Fee equal to the difference (to the extent greater than zero) between (i)&nbsp;3.0% of the Purchase
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-24
</FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Price paid by the Fund for any Investment, and (ii)&nbsp;the aggregate amount of Acquisition Fees paid by or on behalf of the Fund to any other Person in connection with such Investment; if the
Fund purchases an Investment from the Manager or one of its Affiliates pursuant to Section&nbsp;4.1(e)(vii) for a Purchase Price which includes an Acquisition Fee amount, such Acquisition Fee amount shall be deemed paid pursuant to this
Section&nbsp;4.6(f), and there shall be no duplicative payment thereof. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) The Fund shall not pay any
Front&#150;End Fees, or any part thereof, that would cause the Fund&#146;s Investment in Equipment (including Equipment that at any time is subject to, or is the collateral for, Leases or Indebtedness) to be less than the greater of: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">80% of the Gross Offering Proceeds, reduced by .0625% for each 1% of Indebtedness encumbering the Fund&#146;s Investments; or </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">75% of the Gross Offering Proceeds. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:10%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">To calculate the percentage of Indebtedness encumbering the Fund&#146;s Investments, the aggregate amount of the Indebtedness shall be divided by the aggregate Purchase Price (without deduction for
Front&#150;End Fees) paid for all Investments. The quotient so calculated shall be multiplied by .0625% to determine the percentage to be deducted from 80%. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(h) Each month, the Fund shall pay to the Manager or its Affiliates Asset Management Fees attributable to the Gross Rental Payments of the Fund during such month. The Asset Management Fee shall continue
to be payable to the Manager or its Affiliates during the extension of the term of a Lease or when a new Lease is entered into with the same lessee or its Affiliates or a different lessee. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) Until the end of the Operating Period, the Fund shall pay the Manager or its Affiliates Re-Leasing Fees for providing
substantial re-leasing services (including, but not limited to, ongoing marketing or hiring or arranging for the hiring of crews or operating personnel) in connection with the re-lease of the Fund&#146;s Equipment. In addition, the Re-Leasing Fee
shall only be payable to the Manager or its Affiliates if the Equipment is not re-leased to the same lessee or its affiliates and the Manager performs Equipment management services which would entitle it to the Asset Management Fee. In connection
therewith, the Manager or its Affiliates shall maintain adequate staff for rendering re-leasing services to the Fund. Re-leasing fees will be paid to the Manager as each rental payment is received over the term of the lease. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) For providing services in connection with the sale of any Investment, the Fund shall pay to the Manager or its
Affiliates the applicable Re-Marketing Fee; provided that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">in no event shall any Re-Marketing Fees payable to the Manager be paid prior to Investor Return. For the avoidance of doubt, where the Manager participates with an
independent broker on the sale of any Investment, the aforementioned subordination will only apply to that part of the Re-Marketing Fee payable to the Manager; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager or its Affiliates shall not be entitled to receive any Re-Marketing Fees to the extent that such amount would cause the total compensation paid to the
manager in connection with the sale of such Investments to exceed one-half the fee for services which is reasonable, customary and competitive in light of the size, type and location of such Investment; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">in no event shall aggregate Re-Marketing Fees paid to all Persons in connection with the sale of such Investments exceed the fee for services which is reasonable,
customary and competitive in light of the size, type and location of such Investment; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Re-Marketing Fees that cannot be paid to the Manager or its Affiliates when earned because Investor Return has not been achieved shall accrue, without interest, and be
paid to the Manager after Investor Return. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(k) General Fund Expenses. </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Except as otherwise provided in this Section&nbsp;4.6(k), expenses of the Fund other than those incurred and otherwise reimbursed in accordance with Sections 4.6(b)
through (j), shall, to the extent practicable, be billed directly to and paid by the Fund. </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-25
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund shall reimburse the Manager and any of its Affiliates for the actual cost of goods and materials used for or by the Fund and obtained from non-Affiliates of
the Manager. The Manager may be reimbursed for the administrative services necessary to the prudent operation of the Fund; provided, that the reimbursement shall be at the lower of the Manager&#146;s actual cost or the amount that the Fund would be
required to pay to independent third parties for comparable administrative services in the same geographic location. No reimbursement is permitted for services for which the Manager or any Affiliate is entitled to compensation by way of a separate
fee pursuant to other provisions of this Section&nbsp;4.6. The Manager and its Affiliates shall not be reimbursed by the Fund for amounts expended by it with respect to the following: </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(A)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Rent or depreciation, utilities, capital equipment, and other administrative items; and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(B)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Salaries, fringe benefits, travel expenses and other administrative items incurred by or allocated to any Controlling Person of the Manager or of any of its Affiliates
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund shall reimburse the Manager for other services provided to the Fund by an Affiliate in accordance with the provisions of Section&nbsp;4.1(c).
</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_26"></A>4.7 <B>Other Interests of the Manager and its Affiliates. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Except as set forth in the Prospectus, and subject to their fiduciary duties to the Fund, the Manager and its Affiliates shall not be
obligated to present any particular investment opportunity to the Fund, regardless of whether such opportunity is of such character that the Fund could take advantage thereof, and the manager and its Affiliates shall have the right to take for their
own accounts or to recommend such investment opportunity to others. The Manager and its Affiliates, the Members, any shareholders, officer, director, member or employee thereof, or any Person owning a legal or beneficial interest therein, may engage
in or possess an interest in any other business or venture of every nature and description, independently or with others including, but not limited to, the ownership, financing, leasing, trading, hiring, licensing, bailing, renting, operation,
management and brokerage of equipment. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_27"></A>ARTICLE 5. POWERS AND LIABILITIES OF MEMBERS.
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_28"></A>5.1 <B>No Control Over Fund Business. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">No Member shall participate in or have any control over the Fund&#146;s business or have any right or authority to act for, or to bind or
otherwise obligate, the Fund, except for a Member who is also the Manager, and then only in its capacity as the Manager. No Member shall have the right to have the Fund dissolved and liquidated or to have all or any part of such Member&#146;s
Capital Contribution or Capital Account returned except as provided in this Agreement. The Members hereby consent to the exercise by the Manager of the powers granted to the Manager pursuant to this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_29"></A>5.2 <B>Limited Liability. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Except as otherwise provided in the Act or pursuant to this Agreement, after the payment of all Subscription Funds for the Shares purchased by a Member, such Member shall have no further obligations to
the Fund, shall not be subject to any additional assessment and shall not be required to contribute any additional capital to, or to loan any funds to, the Fund. The liability of each Member in its capacity as such shall be limited to the amount of
such Member&#146;s Capital Contribution and its pro rata share of any undistributed Profits. Except as otherwise required by the Act or as expressly set forth in this Agreement, no Member shall have any personal liability whatsoever in such
Member&#146;s capacity as a Member, whether to the Fund, to any of the other Members, to the creditors of the Fund or to any other third party, for the debts, liabilities, commitments or other obligations of the Fund or for any losses of the Fund.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-26
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_30"></A>ARTICLE 6. DISTRIBUTIONS AND ALLOCATIONS. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_31"></A>6.1 <B>Distributions of Cash. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) The Manager shall have the sole discretion to determine what portion, if any, of cash on hand shall be invested and
reinvested in additional Investments and what portion shall be distributed to the Members; provided, however, with respect to the reinvestment of Cash Flow derived from the Sale of the Fund&#146;s Investments, the Manager shall retain sufficient
cash to be distributed to Members to pay state and federal income tax obligations, if any, and not otherwise withheld and paid by the Manager pursuant to Section&nbsp;6.9 of this Agreement, created by the Sale of the Fund&#146;s Investments. Until
the end of the Operating Period, the Manager intends to cause the Fund to make, to the extent available, monthly Cash Distributions; provided, however, that the amount of each Cash Distribution shall be computed on a non-cumulative basis (that is,
without increase for any portion of the monthly cash distribution amount computed above which the Fund is unable to make, and without reduction for any cash distributions actually made, in any prior period). </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Prior to Investor Return, the Fund shall pay the Manager an amount equal to 1.0% of distributions made to the Members
pursuant to this Section&nbsp;6.1. After Investor Return, the Fund shall pay the Manager an amount equal to 19.0% of distributions pursuant to this Section&nbsp;6.1. Notwithstanding the foregoing, (i)&nbsp;no Member shall be entitled to receive any
distributions in an amount that exceeds the positive adjusted Capital Account balance of that Member immediately preceding the distribution (taking into account the effect of any revaluation of the assets of the Fund pursuant to Section&nbsp;3.4)
and (ii)&nbsp;any amount not distributed to a Member pursuant to clause (i)&nbsp;shall be distributed to the other Members that have positive adjusted Capital Account balances, after taking into account their share of the distribution, in accordance
with their respective positive adjusted Capital Account balances. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Notwithstanding the provisions of
Section&nbsp;6.1(b), distributions of cash following a Dissolution Event shall be made in accordance with the provisions of Section&nbsp;9.3. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_32"></A>6.2 <B>Allocations of Profits and Losses. </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) The Profits and Losses of the Fund shall be determined for each Fiscal Year or Fiscal Period. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) Except as otherwise provided in this Agreement, whenever a proportionate part of the Fund&#146;s Profits or Losses is allocated to a Member, every item of income, gain, loss or deduction entering into
the computation of such Profits or Losses, or arising from the transactions with respect to which such Profits or Losses were realized, shall be allocated to such Member in the same proportion. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Profits for any Fiscal Period during the Operating Period shall be allocated as follows: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">First, to the extent that an amount of Loss has been allocated under Section&nbsp;6.2(e) for a prior Fiscal Period and that allocation has not been offset by a
subsequent allocation of Profits pursuant to this Section&nbsp;6.2(c)(i) or Section&nbsp;6.2(d)(i), to the Members in proportion to, and in an amount equal to, the unrecovered amount of Loss (and, if there is an unrecovered Loss for more than one
Fiscal Period or that has been allocated pursuant to Section&nbsp;6.2(e)(i) or Section&nbsp;6.2(e)(ii), then this Section&nbsp;6.2(c)(i) shall be applied first to the Loss arising in the most recent Fiscal Period until that Loss is recovered fully,
and thereafter successively to each preceding Fiscal Period for which there is an unrecovered Loss, ending with the first such Fiscal Period, in each case offsetting Loss allocated pursuant to Section&nbsp;6.2(e)(ii) before those allocated pursuant
to Section&nbsp;6.2(e)(i); </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">second, 1% to the Manager and 99% to the Members in proportion to their Shares, until the Members are allocated the Investor Return to the extent not previously
allocated pursuant to this Section&nbsp;6.2(c)(ii) or Section&nbsp;6.2(d)(ii); and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">thereafter, 19% to the Manager and 81% to the Members. </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-27
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Profits for any Fiscal Period during the Liquidation Period shall be
allocated as follows: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">First, to the extent that an amount of Loss has been allocated under Section&nbsp;6.2(e) for a prior Fiscal Period and that allocation has not been offset by a
subsequent allocation of Profits pursuant to Section&nbsp;6.2(c)(i) or this Section&nbsp;6.2(d)(i), to the Members in proportion to, and in an amount equal to, the unrecovered amount of Loss (and, if there is an unrecovered Loss for more than one
Fiscal Period or that has been allocated pursuant to Section&nbsp;6.2(e)(i) or Section&nbsp;6.2(e)(ii), then this Section&nbsp;6.2(d)(i) shall be applied first to the Loss arising in the most recent Fiscal Period until that Loss is recovered fully,
and thereafter successively to each preceding Fiscal Period for which there is an unrecovered Loss, ending with the first such Fiscal Period, in each case offsetting Loss allocated pursuant to Section&nbsp;6.2(e)(ii) before those allocated pursuant
to Section&nbsp;6.2(e)(i); </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Second, the greater of (A)&nbsp;1% or (B)&nbsp;the excess of the distributions made to the Manager (other than with respect to any Shares it owns) pursuant to the first
sentence of Section&nbsp;6.1(b) (but only to the extent that such distributions have not been treated under the Treasury Regulations as attributable to the distribution of the proceeds of Nonrecourse Liabilities) over the cumulative amount of income
previously allocated to the Manager pursuant to Section&nbsp;6.2(c)(i), Section&nbsp;6.2(f)(v) and this Section&nbsp;6.2(d)(i) (and not offset by Losses allocated pursuant to Section&nbsp;6.2(e)(ii)) to the Manager and the balance to the Members
(including the Manager with respect to any Shares it owns) until such Members have been allocated in the aggregate an amount equal to the Investor Return to the extent not previously allocated pursuant to this Section&nbsp;6.2(d)(ii) or
Section&nbsp;6.2(c)(ii); and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">thereafter, 19% to the Manager and 81% to the Members (including the Manager with respect to any Shares it owns). </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) Losses for any Fiscal Period shall be allocated as follows: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">first, 19% to the Manager and 81% to the Members until the cumulative amount of Losses allocated pursuant to this Section&nbsp;6.2(e)(i) to those who are then Members
equals the cumulative Profits previously allocated to such Members (or their predecessors-in-interest) pursuant to Sections 6.2(c)(iii) and 6.2(d)(iii); and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">thereafter, 1% to the Manager and 99% to the Members; provided, however, that if and to the extent that an allocation of Losses to any Member pursuant to this
Section&nbsp;6.2(e) or Section&nbsp;6.2(f) would result in any such Member having an Adjusted Capital Account Deficit, such Losses shall be allocated to all other Members in accordance with this Section&nbsp;6.2(e) and, when no Member can be
allocated any such Losses without violating the limitation contained in this proviso, such remaining Losses shall be allocated to the Manager. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(f) The following special allocations shall, except as otherwise provided, be made prior to allocations in Section&nbsp;6.2(c)-(e)&nbsp;in the following order: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fund Minimum Gain Chargeback. Any Fund Nonrecourse Deduction for a Fiscal Period shall be allocated to the Members in accordance with their respective Capital Accounts
at the beginning of such period. If there is a net decrease in the Fund Minimum Gain during a Fiscal Period, then items of income and gain for such Fiscal Period (and, if necessary, for subsequent periods) shall be allocated to the Members in the
manner and to the extent required by Treasury Regulations Section&nbsp;1.704-2(f). This clause is intended to constitute a &#147;minimum gain chargeback&#148; as provided by Treasury Regulations Section&nbsp;1.704-2(f), and this clause shall be
construed accordingly. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Member Minimum Gain Chargeback. Any Member Nonrecourse Deduction shall be allocated in the manner specified in Treasury Regulations
Section&nbsp;1.704-2(i)(1), and, subject to the exceptions set forth in Treasury Regulations Section&nbsp;1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during a Fiscal Period attributable to a Member
</FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-28
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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P><FONT STYLE="font-family:Times New Roman" SIZE="2">
Nonrecourse Debt, then each Member with a share of Member Nonrecourse Debt Minimum Gain attributable to such Member&#146;s Nonrecourse Debt, determined in accordance with Treasury Regulations
Section&nbsp;1.704(2)(i)(5), shall be specially allocated items of income and gain for such Fiscal Period (and, if necessary, for subsequent periods) in an amount equal to such Member&#146;s share of the net decrease in Member Nonrecourse Debt
Minimum Gain for such period attributable to such Member Nonrecourse Debt (which share of such net decrease shall be determined under Treasury Regulations Section&nbsp;1.704-2(i)(4) and 1.704-2(g)(2)). This clause is intended to constitute a
&#147;chargeback of partner nonrecourse debt minimum gain&#148; as provided by Treasury Regulations Section&nbsp;1.704-2(i)(4), and this clause shall be construed accordingly. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Qualified Income Offset. In the event that a Member unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations
Section&nbsp;1.704-1(b)(2)(ii)(d)(4), (5)&nbsp;or (6), items of Fund income and gain (consisting of a pro rata portion of each item of Fund income, including gross income, and gain) shall be specially allocated to such Member in the manner required
by Treasury Regulations Section&nbsp;1.704-1(b)(2)(ii)(d) to eliminate, to the extent required by such regulation, the Adjusted Capital Account Deficit of such Member as quickly as possible. This clause is intended to constitute a &#147;qualified
income offset&#148; as provided by Treasury Regulations Section&nbsp;1.704-1(b)(2)(ii)(d), and this clause shall be construed accordingly. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Special Liquidation Period Allocation. During the Liquidation Period, there shall be a special allocation of gross income to the Members (including the Manager
regardless of its Shares) in proportion to, and to the extent of, the deficit balances, if any, in their respective Capital Accounts in excess of the amounts that such Members are obligated to restore and are deemed obligated to restore pursuant to
the penultimate sentences of Treas. Reg. Sections 1.704-2(g)(i) and 1.704-2(i)(5), provided that an allocation pursuant to this Section&nbsp;6.2(f)(iv) shall be made only if and to the extent that such Member would have a deficit Capital Account in
excess of such sum after all other allocations pursuant to this Article 6 have been made as if this Section&nbsp;6.2(f)(iv) and Section&nbsp;6.2(f)(iii) were not part of this Agreement. </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Compliance Allocations. The special allocations provided for in the proviso of Section&nbsp;6.2(e)(ii) and in Sections 6.2(f)(i)-(iv)&nbsp;are intended to comply with
certain requirements of Treas. Reg. Sections 1.704-1 and 1.704-2. To the extent that any of such special allocations shall have been made, subsequent allocations of income, gains, losses and deductions and items thereof (curative allocations) shall
be made as soon as possible and in a manner so as to cause, to the extent possible without violating the requirements of Treas. Reg. Sections 1.704-1 and 1.704-2, the Members&#146; Capital Account balances to be as nearly as possible in the same
proportions in which they would have been had such special allocations not occurred. In making such curative allocations, due regard shall be given to the character of the Profits and Losses and items thereof that were originally allocated pursuant
to the provision of Sections 6.2(e) and Sections 6.2(f)(i)-(iv)&nbsp;in order to put the Members as nearly as possible in the positions in which they would have been had such special allocations not occurred. </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the Manager determines, after consultation with counsel, that the allocation of any item of Fund income, gain, loss or deduction is not specified in this Article 6
(an &#147;unallocated item&#148;), or that the allocation of any item of Fund income, gain, loss or deduction hereunder is clearly inconsistent with the Members&#146; economic interests in the Fund determined by reference to this Agreement, the
general principles of Treas. Reg. Section&nbsp;1.704-1(b) and the factors set forth in Treas. Reg. Section&nbsp;1.704-1(b)(3)(ii)(a) &#147;misallocated item&#148;), then the Manager may allocate such unallocated items and reallocate such
misallocated items, to reflect such economic interests. </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-29
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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Special Allocation of State, Local and Foreign Taxes. Any state, local or foreign taxes imposed on the Fund by reason of a Member being a citizen, resident or national
of such state, locality or foreign jurisdiction, including any item(s) of taxable income or tax loss resulting therefrom, shall be specially allocated to such Member. </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Transactions with the Fund. If, and to the extent that, any Member is deemed to recognize any item of income, gain, loss, deduction or credit as a result of any
transaction between such Member and the Fund pursuant to Code Sections 482, 483, 1272-1274, 7872 or any similar provision now or hereafter in effect, any corresponding Profits or Losses or items thereof shall be allocated to the Member who was
charged with such item. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fees and Commissions Paid to the Manager. It is the intent of the Fund that, any amount paid or deemed paid to the Manager as a fee or payment described in
Section&nbsp;4.6 shall be treated as a &#147;guaranteed payment&#148; or a payment to a Member not acting in his capacity as a Member pursuant to Code Section&nbsp;707(c) or (a), respectively, to the extent possible. If any such fee or payment is
deemed to be a distribution to the Manager and not a guaranteed payment or a payment to a Member not acting in his capacity as a Member, the Manager shall be allocated an amount of Fund ordinary gross income equal to such payment.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ix)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Syndication Expenses. Syndication Expenses attributable to the Selling Commissions and Dealer Manager Fees paid on the Fund&#146;s sale of any Share shall be specially
allocated to the Member who purchased such Share; and all other Syndication Expenses shall be allocated to the Members who are admitted to the Fund from time to time so that, to the extent possible, the cumulative Syndication Expenses (other than
Selling Commissions and Dealer Manager Fees) allocated with respect to each Share are the same. If the Manager determines that such result is not likely to be achieved through future allocation of Syndication Expenses, the Manager may allocate a
portion of Profits or Losses or other items of income, gain, loss, deduction or expense to achieve the same effect on the Capital Accounts of the Members. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_33"></A>6.3 <B>Tax Allocations; Code Section&nbsp;704(c); Revaluations. </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) Except as otherwise provided in this Section&nbsp;6.3, the taxable income or loss of the Fund (and items thereof) for any Fiscal Period shall be allocated among the Members in proportion to and in the
same manner as Profit, Loss and separate items of income, gain, loss and deduction (excluding items for which there are no related tax items) are allocated among the Members for Capital Account purposes pursuant to the provisions of
Section&nbsp;6.2. Except as otherwise provided in this Section&nbsp;6.3, the allocable share of a Member for tax purposes in each specified item of income, gain, deduction and loss of the Fund comprising Profit, Loss, or an item allocated pursuant
to Section&nbsp;6.2 shall be the same as such Member&#146;s allocable share of Profit, Loss, or the corresponding item for such Fiscal Period. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) In accordance with Code Section&nbsp;704(c) and the Treasury Regulations thereunder, income, gain, loss and deduction, and items thereof, with respect to any property contributed to the capital of the
Fund shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Fund for federal income tax purposes and its initial Gross Asset Value. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) In the event the Gross Asset Value of any Fund asset is adjusted pursuant to clause (b)&nbsp;of the definition of
Gross Asset Value herein and Section&nbsp;3.4(g) hereof, subsequent allocations of income, gain, loss and deduction, and items thereof, with respect to such asset shall take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in a manner consistent with the requirements of Treas. Reg. Section&nbsp;1.704-3(a)(6). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) Any elections or other decisions relating to the allocations required by clauses (b)&nbsp;and (c)&nbsp;of this Section&nbsp;6.3 shall be made in a manner that reasonably reflects the purpose and
intention of this Agreement. Allocations pursuant to this clause (d)&nbsp;of this Section&nbsp;6.3 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member&#146;s
Capital Account or share of Profits, Losses, other items or distributions pursuant to any provision of this Agreement. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-30
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_34"></A>6.4 <B>Distributions and Allocations Among the Members. </B>
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Except to the extent otherwise provided herein, all distributions of cash and all allocations of Profits
and Losses and items thereof for any Fiscal Year or Fiscal Period to the Members (including the Manager with respect to any Shares it owns) shall be distributed or allocated, as the case may be, among the Members in proportion to their respective
numbers of Shares. Each distribution of cash shall be made to the Members or their respective assignees of record as of the day on which such distribution is made. If the Manager determines at any time that the amount of distributions made to any
such Member during or with respect to a Fiscal Year does not (or will not) properly reflect such Member&#146;s share of the total distributions made or to be made by the Fund for such Fiscal Year, the Manager shall, as soon as practicable, make a
supplemental distribution to such Member, or withhold from a subsequent distribution that otherwise would be payable to such Member, such amount as shall cause the total distributions to such Member for such Fiscal Year to be the proper amount.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Notwithstanding the general rule set forth in Section&nbsp;6.4(a) regarding the allocation of Profits and
Losses among Members, beginning with the first Fiscal Year that starts on or after the first day of the Liquidation Period, Profits and Losses allocated to the Members (as distinct from Profits and Losses allocated to the Manager as manager)
pursuant to Sections 6.2(c), 6.2(d), or 6.2(e) shall first be allocated among the Members so as to equalize, as soon as practicable, the ratio for each Member of such Member&#146;s Capital Account (as adjusted to take into account amounts the Member
is obligated, or deemed obligated, to restore pursuant to Treas. Reg. Section&nbsp;1.704-2(g)(i) and 1.704-2(i)(5)) to the number of Shares held by such Member, and thereafter in proportion to their respective number of Shares. If there are not
sufficient Profits or Losses so allocated to the Members for such Fiscal Year to bring such ratios into equality, such Profits and Losses shall be allocated among the Members in the same proportions as would have been the case had the minimum amount
of Profits or Losses, as the case may be, necessary to produce such equality been available for allocation. For purposes of applying this provision to the Manager with respect to any Shares it owns, similar principles to those set forth above shall
be applied. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) In connection with any Fiscal Year in which any Members (other than the Manager) are admitted
to the Fund or, with respect to clause (ii), have Shares redeemed by the Fund, Profits and Losses or items thereof shall be allocated, and distributions made, among such Members as follows: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Operations and Sales shall be deemed to have occurred ratably over such Fiscal Year, irrespective of the actual results of Operations or Sales;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">for purposes of determining the Profits, Losses or any other items allocable to any period (including for periods of less than a Fiscal Year to the extent necessary in
order to comply with Code Section&nbsp;706(d)), Profits, Losses and any such other items shall be determined on a daily, monthly or other basis, as determined by the Manager using any permissible method under Code Section&nbsp;706 and the Treasury
Regulations thereunder. If the amount of Profit or Loss allocable to a Member is limited as a result of the use of such method compared to the amount of such Profit or Loss that otherwise would have been allocated to such Member pursuant to Sections
6.2(c), 6.2(d) or 6.2(e) (as amplified by Sections 6.4(a) or 6.4(b), as the case may be), such excess amount shall be reallocated to the other Members in proportion to the amounts allocated to them pursuant to said Sections; and
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">all distributions made to such Members pursuant to Section&nbsp;6.1(b) shall be distributed among the Members in the ratio that the number of Shares held by each Member
multiplied by the number of days that such Shares were held by such Member preceding the date on which the distribution is made bears to the sum of that calculation for all Members. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) In the event of a transfer of a Share during a Fiscal Year in accordance with Article 8, the transferor and transferee
shall be allocated a ratable share of Profits and Losses for such Fiscal Year based on the number of days in such Fiscal Year that each held such transferred Shares. Monthly distributions made by the Fund in accordance with Section&nbsp;6.1(b) shall
be allocated between the transferor and transferee (and subsequently adjusted, if necessary) in the manner set forth in Section&nbsp;6.4(a). </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-31
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_35"></A>6.5 <B>Compliance with NASAA Guidelines Regarding Front-End
Fees. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Notwithstanding anything in this Agreement to the contrary, in the event the Fund fails, at any time after the
expiration of 30 months from the date of the Prospectus, to comply with the restrictions set forth in Section&nbsp;4.6(b) through (j)&nbsp;above, the Manager shall appropriately adjust the allocations and distributions set forth in this Article 6 so
as to comply with the requirements contained in the NASAA Guidelines. No adjustment proposed to be made pursuant to this Section&nbsp;6.5 shall require the Manager to obtain the Consent of the Members unless such proposed adjustment adversely
affects the allocations or distributions made, or to be made, to any Member. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_36"></A>6.6 <B>Return of
Uninvested Capital Contribution. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If any amount of the Net Offering Proceeds has not been committed to Investments or
committed to Reserves by twenty-four (24)&nbsp;months after the Effective Date of the Offering, the amount of such uninvested Net Offering Proceeds shall be promptly distributed by the Fund to the Members, pro rata based upon their respective number
of Shares, as a return of capital, without interest and without reduction for Front-End Fees in respect of such uninvested Capital Contributions (which distributions shall not in any event exceed the related Capital Contribution of any Member).
Funds shall be deemed to have been committed to Investments and need not be returned to a Member to the extent written agreements in principle, commitment letters, letters of intent or understanding, option agreements or any similar contracts or
understandings are executed and not terminated during the applicable periods described above, and if such Investments are ultimately consummated within a further period of twelve (12)&nbsp;months. Funds deemed committed which are not actually so
invested within such twelve (12)&nbsp;month period will be promptly distributed, without interest and without reduction for Front-End Fees in respect of such uninvested Net Offering Proceeds, to the Members on a pro rata basis, as a return of
capital. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_37"></A>6.7 <B>Members&#146; Return of Investment in the Fund. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Each Member shall look solely to the assets of the Fund for the return of his or her Capital Contribution and for any other distributions
with respect to his or her Shares. If the assets of the Fund remaining after payment or discharge, or provision for payment or discharge, of its debts and liabilities are insufficient to return such Capital Contribution or to make any other
distribution to such Member, he or she shall not have any recourse against the personal assets of the Manager, any of its Affiliates or any other Member, except to the limited extent set forth in this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_38"></A>6.8 <B>No Distributions in Kind. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Distributions in kind shall not be permitted except upon dissolution and liquidation of the Fund&#146;s assets and may only then be made
to a liquidating trust which has been established for the purpose of liquidation of the Fund&#146;s assets and distribution of the net cash proceeds of such liquidation in cash to the Members in accordance with the provisions of this Agreement.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_39"></A>6.9 <B>Fund Entitled to Withhold. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund shall, at all times, be entitled to withhold or make payments to any governmental authority with respect to any federal, state,
local or foreign tax liability of any Member arising as a result of such Member&#146;s participation in the Fund. Each such amount so withheld or paid shall be deemed to be a distribution for purposes of Articles 6 and 9, as the case may be, to the
extent such Member is then entitled to a distribution. To the extent that the amount of such withholdings or payments made with respect to any Member exceeds the amount to which such Member is then entitled as a distribution, the excess shall be
treated as a demand loan, bearing interest at a rate equal to twelve percent (12%)&nbsp;per annum simple interest from the date of such payment or withholding until such excess is repaid to the Fund (i)&nbsp;by deduction from any distributions
subsequently payable to such Member pursuant to this Agreement or (ii)&nbsp;earlier payment of such excess and interest by such Member to the Fund. Such excess and interest shall, in any case, be payable not less than 30 days after demand therefor
by </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-32
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
the Manager, which demand shall be made only if the Manager determines that such Member is not likely to be entitled to distributions within twelve (12)&nbsp;months from the date of such
withholding or payment by the Fund in an amount sufficient to pay such excess and interest. The withholdings and payments referred to in this Section&nbsp;6.9 shall be made at the maximum applicable statutory rate under the applicable tax law unless
the Manager shall have received an opinion of counsel or other evidence, satisfactory to the Manager, to the effect that a lower rate is applicable, or that no withholding or payment is required. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_40"></A>ARTICLE 7. WITHDRAWAL OF THE MANAGER. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_41"></A>7.1 <B>Voluntary Withdrawal. </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Manager may voluntarily withdraw as a Manager from the Fund and terminate its service to the Fund provided that the following conditions are met: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) each Member shall have received written Notice of the Manager&#146;s intention to withdraw sixty (60)&nbsp;days in
advance; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the Fund shall have received an opinion of counsel (which need not be special counsel) to the
effect that such withdrawal will not constitute a termination of the Fund, or otherwise materially adversely affect the status of the Fund for federal income tax purposes; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) a Substitute Manager shall have been selected, and such Substitute Manager shall have: (i)&nbsp;expressed a
willingness to be admitted to the Fund, (ii)&nbsp;received the specific written Consent of the Majority Interest to such admission and (iii)&nbsp;a Net Worth sufficient to satisfy the net worth requirements for a &#147;sponsor&#148; under the NASAA
Guidelines. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Notwithstanding the foregoing, the Manager may voluntarily withdraw as a Manager from the Fund
(a)&nbsp;immediately upon the conclusion of the Liquidation Period; or (b)&nbsp;with ten (10)&nbsp;days advanced written Notice to the Members in the event of the amendment of this Agreement by the Members. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_42"></A>7.2 <B>Involuntary Withdrawal.</B> The Manager shall be deemed to have involuntarily withdrawn as a
Manager from the Fund upon the removal of the Manager pursuant to the Consent of the Majority Interest or upon the occurrence of any other event that constitutes an event of withdrawal under the Act as then in effect. For purposes of this
Section&nbsp;7.2 and Article 11, neither the Manager nor any of its Affiliates will participate in any vote by the Members to (a)&nbsp;involuntarily remove the Manager or (b)&nbsp;cancel any management or service contract or agreement with the
Manager or any such Affiliate. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_43"></A>7.3 <B>Consequences of Withdrawal. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Upon the withdrawal of the Manager in accordance with either Section&nbsp;7.1 or Section&nbsp;7.2, the Manager, or its
estate, successors or legal representatives, shall be entitled to receive from the Fund: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the positive fair market value of the interest in the income, losses, distributions and capital of the Fund then held by the Manager, as calculated in accordance with
the provisions of clause (c)&nbsp;of this Section&nbsp;7.3; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Asset Management Fees payable to the Manager with respect to Investments acquired by the Fund prior to the effective date of the Withdrawal of the Manager and which
have accrued as at the effective date of the Withdrawal of the Manager, as and when the Fund receives the Cash Flow from such Investments; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">an amount equal to the difference between (A)&nbsp;any amounts due and owing to the Manager by the Fund (including any deferred fees) and (B)&nbsp;any amounts due and
owing by the Manager to the Fund, and, upon such payment, the Manager&#146;s interest in the income, losses, distributions and capital of the Fund shall be terminated. </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-33
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Upon the Voluntary Withdrawal or Involuntary Withdrawal of the Manager
in accordance with Section&nbsp;7.1 or Section&nbsp;7.2, the Manager shall be paid the amounts due under Section&nbsp;7.3(a) pursuant to a non-interest-bearing, unsecured promissory note of the Fund, with principal payable, if at all, from
distributions that the withdrawn Manager otherwise would have received under this Agreement had the Manager not withdrawn. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) For purposes of this Section&nbsp;7.3, the fair market value of the withdrawn Manager&#146;s interest in the income, losses, distributions and capital of the Fund shall be determined, in good faith,
by such Manager and the Fund, or, if they cannot agree, by arbitration in accordance with the then current rules of the American Arbitration Association by two independent appraisers, one selected by the withdrawn Manager and one by the Members. In
the event that such two appraisers are unable to agree on the value of the withdrawn Manager&#146;s Shares within 90 days, they shall, within 20 days thereafter, jointly appoint a third independent appraiser whose determination shall be final and
binding; provided, however, that if the two appraisers are unable to agree within such 20 days on a third appraiser, the third appraiser shall be selected by the American Arbitration Association. The expense of arbitration shall be borne equally by
the withdrawn Manager and the Fund. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) In the event that the Manager pledges the Asset Management Fees
payable to it by the Fund to a Lender, the assignment to the Lender shall be binding in the event of the Voluntary Withdrawal or Involuntary Withdrawal of the Manager. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_44"></A>7.4 <B>Continuation of Fund Business. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In the
event that the Manager withdraws from the Fund, the Manager, or its estate, successors or legal representatives, shall deliver to the Members Notice stating that it has withdrawn. If, within 90 days following such Withdrawal, any Person shall be
admitted to the Fund as a Substitute Manager, such Substitute Manager shall execute a counterpart of this Agreement and the business of the Fund shall continue. If no Substitute Manager shall have been so admitted to the Fund within 90 days
following the date of the Manager&#146;s Withdrawal, then the Fund shall be dissolved. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_45"></A>ARTICLE 8. TRANSFER OF UNITS. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_46"></A>8.1 <B>Member Withdrawal. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A Member may withdraw from the Fund only in accordance with this Article 8. The withdrawal of a Member shall not dissolve or terminate the Fund. In the event of the withdrawal of any Member because of
death, legal incompetence, dissolution or other termination, the estate, legal representative or successor of such Member shall be deemed to be the Assignee of the Shares of such Member and may become a Substitute Member upon compliance with the
provisions of Section&nbsp;8.3. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_47"></A>8.2 <B>Assignment. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Subject to the provisions of Sections 8.2(b) and (c)&nbsp;and 8.3 of this Agreement, any Member may Assign all or any
portion of the Shares owned by such Member to any Person (the &#147;Assignee&#148;); provided, that </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">such Member and such Assignee shall each execute a written Assignment instrument, which shall: </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(A)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">set forth the terms of such Assignment; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(B)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">evidence the acceptance by the Assignee of all of the terms and provisions of this Agreement; </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-34
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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(C)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">include a representation by both such Member and such Assignee that such Assignment was made in accordance with all applicable laws and regulations (including, without
limitation, such minimum investment and investor suitability requirements as may then be applicable under state securities laws and the NASAA Guidelines); and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(D)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">otherwise be satisfactory in form and substance to the Manager. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) Notwithstanding the foregoing, unless the Manager shall specifically consent, no Shares may be Assigned: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">to a minor or incompetent (unless a guardian, custodian or conservator has been appointed to handle the affairs of such Person); </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">to any Person if, in the opinion of counsel, such Assignment would result in the termination of the Fund, or its status as a partnership, for federal income tax
purposes; provided, however, that the Fund may permit such Assignment to become effective if and when, in the opinion of counsel, such Assignment would no longer result in the termination of the Fund, or its status as a partnership, for federal
income tax purposes; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">to any Person if such Assignment would affect the Fund&#146;s existence or qualification as a limited liability company under the Act or the applicable laws of any
other jurisdiction in which the Fund is then conducting business; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">to any Person not permitted to be an Assignee under applicable law, including, without limitation, applicable federal and state securities laws;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">if such Assignment would result in the transfer of less than 500 Shares (unless, after giving effect to such Assignment, the Member would continue to own at least 500
Shares); </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">if such Assignment would result in the retention by such Member of less than 500 Shares, or if the Assignee would not own at least 500 Shares; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">if, in the reasonable belief of the Manager, such Assignment might violate applicable law; or </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">if, in the determination of the Manager, such Assignment would not be in the best interest of the Fund and its Members. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any attempt to make any Assignment of Shares in violation of this Section&nbsp;8.2(b) shall be null and void ab initio. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) No transfer, Assignment or redemption of Shares shall be made, and the Manager shall not recognize any such transfer,
Assignment or redemption for any purpose whatsoever, if it would result in the Fund being treated as an association taxable as a corporation or as a &#147;publicly traded partnership&#148; for federal income tax purposes. In addition, the Manager
shall not recognize for any purpose whatsoever (including recognizing any rights of the transferee, such as the right of the transferee to receive directly or indirectly Fund distributions or to acquire an interest in the capital or profits of the
Fund), an Assignment of Shares (or interest therein) if such Assignment occurred on an established securities market or a secondary market (or the substantial equivalent thereof) as defined under the Code and any Treasury Regulations or published
notices promulgated thereunder (a &#147;Secondary Market&#148;) or fails to meet one or more of the Secondary Market &#147;safe harbor&#148; provisions of Treas. Reg. Section&nbsp;1.7704-1 or any substitute safe harbor provisions that subsequently
may be established by Treasury Regulations or published notices. The Manager may, in its sole discretion, decline to recognize, for any purpose whatsoever, a transfer or Assignment even if it falls within one or more of the foregoing-referenced
Secondary Market &#147;safe harbor&#148; provisions. The Members agree to provide all information with respect to Assignments which the Manager deems necessary in order to determine whether a proposed transfer occurred or will occur on a Secondary
Market, and each Member hereby consents and agrees to any decision made by the Manager, in good faith, to deny a proposed Assignment of Shares hereunder. In no event shall the Fund recognize, for any purpose whatsoever, transfers in any taxable year
(other than those that the Manager concludes in good faith are described in </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-35
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Treas. Reg. Sections 1.7704-1(e)(1)(i)-(vii), 1.7704-1(e)(1)(ix), or 1.7704-1(g)), to the extent such transfers in the aggregate exceed 2% of the total interests in the Fund&#146;s capital or
profits as determined in accordance with Treas. Reg. Sections 1.7704-1(j) and 1.7704-1(k). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Assignments
made in accordance with this Section&nbsp;8.2 shall be considered consummated on the last day of the month upon which all of the conditions of this Section&nbsp;8.2 shall have been satisfied and effective for record purposes and for purposes of
Article 8 as of the first day of the month following the date upon which all of the conditions of this Section&nbsp;8.2 shall have been satisfied. Distributions to the Assignee shall commence the month following effectiveness of the Assignment.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_48"></A>8.3 <B>Substitution. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) An Assignee shall be admitted to the Fund as a Substitute Member only if: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager has reasonably determined that all conditions specified in Section&nbsp;8.2 have been satisfied and that such admission shall not have any adverse effect
upon the Fund; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">such Assignee shall have executed a transfer agreement and such other forms, including a power of attorney to the effect required by Article 13, as the Manager
reasonably may require to determine compliance with this Article 8. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) An Assignee who does not
become a Substitute Member in accordance with this Section&nbsp;8.3 and who desires to make a further Assignment of his or her Shares shall be subject to all the provisions of Sections 8.2, 8.3 and 8.4 to the same extent and in the same manner as a
Member desiring to make an Assignment of Shares. Failure or refusal of the Manager to admit an Assignee as a Substitute Member shall in no way affect the right of such Assignee to receive distributions of cash and the share of the Profits or Losses
for tax purposes to which his or her predecessor in interest would have been entitled in accordance with Article 6. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) The Fund will amend this Agreement at least once each calendar quarter to reflect the admittance of an Assignee as a Substitute Member. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_49"></A>8.4 <B>Status of an Assigning Member. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Any Member that shall Assign all of his or her Shares to an Assignee who becomes a Substitute Member shall cease to be a Member and shall
no longer have any of the rights or privileges of a Member. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_50"></A>8.5 <B>Repurchase of Shares Held
by Foreign Partners. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund shall have the right, but not the obligation, to repurchase, for cash, all or a portion of
the Shares of any Member, at the Applicable Repurchase Price, if such Member becomes a &#147;foreign partner&#148; as that term is used in Code Section&nbsp;1446 at any time during the Term; provided, however, that: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) it must be the opinion of the Fund that such repurchase would not constitute a transaction on an established
securities market or a Secondary Market (or the substantial equivalent thereof); </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) it must be the opinion of
the Fund that such repurchase would not jeopardize the Fund&#146;s treatment as a partnership for federal income tax purposes; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) it must be the opinion of the Fund that sufficient cash flow is available to provide the funds for such repurchase; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) the Fund shall not, in any calendar year, repurchase Shares pursuant to this Section&nbsp;8.5 that, in the aggregate,
along with all Shares otherwise transferred in such calendar year (other than those that the Manager in good faith concludes are described in Treas. Reg. Sections 1.7704-1(e)(i)-(vii), 1.7704-1(e)(ix) or 1.7704-1(g)), including Shares repurchased
pursuant to Section&nbsp;8.6, exceed 2% of the total interests in the Fund&#146;s capital or profits as determined in accordance with Treas. Reg. Sections 1.7704-1(j) and 1.7704-1(k). </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-36
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_51"></A>8.6 <B>Redemption of Shares. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) A Member (other than the Manager or an Affiliated Member) may request that the Fund redeem such Member&#146;s Shares.
The Fund shall not, in any calendar year, redeem Shares pursuant to this Section&nbsp;8.6 that, in the aggregate, along with all Shares otherwise transferred in such calendar year (other than those that the Manager in good faith concludes are
described in Treas. Reg. Sections 1.7704-1(e)(i)-(vii), 1.7704-1(e)(ix), or 1.7704-1(g)) including Shares redeemed pursuant to Section&nbsp;8.5, exceed 2% of the total interests in the Fund&#146;s capital or profits as determined in accordance with
Treas. Reg. Sections 1.7704-1(j) and 1.7704-1(k). With the prior Consent of the Manager, the Fund shall redeem, for cash, up to 100% of the Shares of such Member, at the Applicable Redemption Price. The Fund shall be under no obligation to redeem
Shares of a Member and shall do so only in the discretion of the Manager. In this regard, the Manager may take into consideration the time of year during which a redemption request is made, and the effect such a redemption would have on the 2% limit
described above. A Member desiring to have a portion or all of his Shares redeemed shall submit a request in form and substance satisfactory to the Fund. A request for redemption may be withdrawn by the Member at any time by providing Notice in
writing five (5)&nbsp;business days prior to the end of the fiscal quarter. The Manager shall accept or deny redemption requests quarterly. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) No reserves shall be established by the Fund for the redemption of Shares. Funds for the redemption of any Share may be derived from Cash Flow, general Reserves or additional Capital Contributions of
Members. Shares may be redeemed only if such redemption would not impair the capital or the Operations of the Fund and would not result in the termination under the Code of the Fund&#146;s taxable year or of its federal income tax status as a
partnership. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) In the event that the Manager receives requests for the Fund to redeem more Shares than there
are funds sufficient to redeem, the Manager may, in its discretion, give priority (i)&nbsp;first, to hardship redemptions (e.g., requests arising from death, major medical expense, family emergency, disability, a material loss of family income,
etc.), (ii)&nbsp;second, to provide liquidity for IRAs or qualified plans to meet required distributions, and (iii)&nbsp;to all other redemption requests. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) In the event that all Shares of any Member are redeemed, such Member shall be deemed to have withdrawn from the Fund and shall, from and after the date of the redemption of all Shares of such Member,
cease to have the rights of a Member. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_52"></A>8.7 <B>Cancellation of Shares. </B>Any Shares acquired
(whether by redemption or otherwise) by the Fund pursuant to this Article 8 or any other provision of this Agreement shall (i)&nbsp;not be cancelled and shall remain available for sale pursuant to the Offering if acquired prior to the Termination
Date and (ii)&nbsp;be cancelled if acquired on or after the Termination Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_53"></A>8.8 <B>Shares by
Assignment.</B> Persons holding Shares by assignment from entities holding Shares for the purpose of assigning all or a portion of such interests to subscribers (the &#147;Assignor&#148;) shall have the same rights as if they were Members except as
prohibited by applicable law. The Assignor&#146;s management shall have fiduciary responsibility for the safekeeping and use of all funds and assets of the assignees, whether or not in the Assignor management&#146;s possession or control, and the
management of the Assignor shall not employ, or permit another to employ such funds or assets in any manner except for the exclusive benefit of the assignees. Such assignees shall not be permitted to contract away the fiduciary duty owed to the
assignees by the Assignor&#146;s management under the common law of agency. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-37
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_54"></A>ARTICLE 9. DISSOLUTION AND WINDING-UP. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_55"></A>9.1 <B>Events Causing Dissolution. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund shall be dissolved upon the happening of any of the following events (each a &#147;Dissolution Event&#148;): </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) the withdrawal of the Manager, unless a Substitute Manager shall have been admitted to the Fund in accordance with
Article 7 of this Agreement; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) the voluntary dissolution of the Fund (i)&nbsp;by the Manager with the
Consent of the Majority Interest or (ii)&nbsp;subject to Article 11 of this Agreement, by the Consent of the Majority Interest without action by the Manager; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) the Sale of all or substantially all of the Investments of the Fund; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) the expiration of the Fund term specified in Section&nbsp;2.8 of this Agreement; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(e) the Operations of the Fund shall cease to constitute legal activities under the Act or any other applicable law; or </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) any other event which causes the dissolution or winding-up of the Fund under the Act to the extent not otherwise
provided herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_56"></A>9.2 <B>Winding-Up of the Fund; Capital Contribution by the Manager Upon
Dissolution. </B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Upon the occurrence of a Dissolution Event, the winding-up of the Fund and the
termination of its existence shall be accomplished as follows: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">if there is no Manager upon the occurrence of a Dissolution Event, a Person shall be selected by the Consent of the Majority Interest, to wind up the affairs of the
Fund, or if no such other Person is so selected, such other Person as is required by law to wind up the affairs of the Fund (the &#147;Liquidator&#148;), which Liquidator may exercise all of the powers granted to the Manager herein and is hereby
authorized to do any and all acts and things authorized by law and by this Agreement for such purposes and any and all such other acts or things consistent therewith as may be expressly authorized by the Majority Interest; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager or Liquidator shall proceed with the liquidation of the Fund, including, without limitation, the Sale of any remaining Investments and cancellation of the
Certificate of Formation, and is hereby authorized to adopt such plan, method or procedure as may be deemed reasonable by the Manager or Liquidator to effectuate an orderly winding-up; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">all Profits or Losses or items thereof and all amounts required to be specially allocated pursuant to Section&nbsp;6.2(f) for the period prior to final termination
shall be credited or charged, as the case may be, to the Members in accordance with Article 6; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">in the event that, after all requirements of the foregoing clauses of this Section&nbsp;9.2(a) shall have been accomplished, the Manager shall have a deficit balance in
its Capital Account, the Manager shall contribute within thirty (30)&nbsp;days to the Fund as a Capital Contribution an amount equal to the amount of such deficit balance; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the proceeds from Sales and all other assets of the Fund shall be applied and distributed in liquidation as provided in Section&nbsp;9.3; and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Manager or Liquidator shall file such certificates and other documents as shall be required by the Act, the Code and any other applicable laws to terminate the
Fund. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) If the winding-up of the Fund is effected by the Manager, the Manager shall be
compensated for its services in connection therewith as provided in Section&nbsp;4.6 of this Agreement and, if the winding-up is </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-38
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
effected by a Liquidator, the Liquidator shall be compensated for its services in connection therewith in an amount not in excess of the amount customarily paid to non-affiliated third parties
rendering similar services in respect of similar entities in the same geographic location. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_57"></A>9.3
<B>Application of Liquidation Proceeds Upon Dissolution. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Following the occurrence of any Dissolution Event, the proceeds
of liquidation and the other assets of the Fund shall be applied as follows and in the following order of priority (subject to any requirements of the Act): </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) first, to the payment of creditors of the Fund in order of priority as provided by law, except obligations to Members or their Affiliates; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) next, to the setting up of any Reserve that the Manager or Liquidator shall determine is reasonably necessary for any
contingent or unforeseen liability or obligation of the Fund or the Members; such Reserve may, in the discretion of the Manager or Liquidator be paid over to an escrow agent selected by it to be held in escrow for the purpose of disbursing such
Reserve in payment of any of the aforementioned contingencies, and at the expiration of such period as the Manager or Liquidator may deem advisable, to distribute the balance thereafter remaining as provided in clauses (c)-(e)&nbsp;of this
Section&nbsp;9.3. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) next, to the payment of all reimbursements to which the Manager or any of its Affiliates
may be entitled pursuant to this Agreement; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) next, to the payment of all obligations to the Members in
proportion to, and to the extent of advances made by, each Member pursuant to the provisions of this Agreement; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(e) thereafter, to the Members, within the time period specified in Treas. Reg. Section&nbsp;1.704-1(b)(2) (ii)(b)(2), in proportion to, and to the extent of, the positive balances of their Capital
Accounts after giving effect to all contributions, distributions, and allocations for all periods. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_58">
</A>ARTICLE 10. FISCAL MATTERS AND REPORTS. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_59"></A>10.1 <B>Title to Property and Bank Accounts.
</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">All Investments and other assets of the Fund shall be held in the name of the Fund, except to the extent permitted in
Section&nbsp;4.1(e)(vii). The funds of the Fund shall be deposited in the name of the Fund in such bank account or accounts as shall be designated by the Manager, and withdrawals therefrom shall be made upon the signature of the Manager or such
Person or Persons as shall be designated in writing by the Manager. The funds of the Fund shall not be commingled with the funds of any other Person except as permitted in Section&nbsp;4.2(g). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_60"></A>10.2 <B>Maintenance of and Access to Basic Fund Documents. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) The Manager shall maintain the following documents: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the Membership List, which shall be updated at least quarterly to reflect any known change in the information contained therein; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">a copy of the Certificate of Formation and all amendments thereto; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">copies of this Agreement and any amendments hereto, as well as executed copies of any powers of attorney pursuant to which this Agreement or any such amendment has been
executed; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">copies of the audited financial statements of the Fund for the three most recently completed Fiscal Years, including, in each case, the balance sheet and related
statements of operations, cash flows and changes in Members&#146; equity at or for such Fiscal Year, together with the report of the Fund&#146;s independent auditors with respect thereto; </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-39
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">copies of the Fund&#146;s federal, state and local income tax returns and reports, if any, for the three most recently completed Fiscal Years; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vi)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">records as required by applicable tax authorities, including those specifically required to be maintained by &#147;tax shelters,&#148; if so required by the Fund;
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(vii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">investor suitability records for Shares sold for a period of six years after such sale; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(viii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">complete and accurate financial books and records with respect to the business and affairs of the Fund, kept on an accrual basis and prepared in accordance with
generally accepted accounting principles; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ix)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">such other records as are required to be maintained pursuant to the Foreign Corrupt Practices Act of 1977, as amended. </FONT></TD></TR></TABLE>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Such books and records shall be kept at the principal place of business of the Fund and each Member and his or her
designated representative shall be given access to all of the foregoing records of the Fund, and may inspect the same and make copies of the same (subject, in the case of copying the Membership List, to compliance with clause (c)&nbsp;of this
Section&nbsp;10.2) at the Member&#146;s expense, upon reasonable Notice and during normal business hours, which Notice shall specify the documents the Member intends to examine and/or copy. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) The Manager shall mail a copy of the Membership List to, or as directed by, any Member within ten (10)&nbsp;business
days of receipt by the Fund of a written request therefor together with a check in payment of the cost to the Manager of preparing and transmitting such list to such party or his designated representative; provided that, in connection with any
copying or request for a copy, such Member shall certify to the Fund that the Member is not requesting the Membership List for the purpose of (each, an &#147;Impermissible Purpose&#148;): </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">providing the Membership List (or any of the information set forth therein) to any third party (other than to the Member&#146;s designated representative(s)), except
when used in connection with exercising any voting rights of the Shares or any rights under federal proxy solicitation laws; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">selling the Membership List; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">using the Membership List for a commercial purpose unrelated to the Shares; or </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">using the Membership List for an unlawful purpose. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Manager shall not be required to mail a copy of the Membership List to, or as directed by, any Member unless such Member shall have certified to the Fund that the Member is not requesting the
Membership List for an Impermissible Purpose. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) If the Manager refuses or neglects to comply with
Section&nbsp;10.2(b) or (c)&nbsp;hereof, the Manager shall be liable to such Member for the costs, including reasonable attorneys&#146; fees, incurred by such Member to compel production of the Membership List, and for the actual damages (if any)
suffered by such Member by reason of such refusal or neglect. It shall be a defense that the requesting Member (i)&nbsp;has failed to pay the required fee, (ii)&nbsp;has not provided the Manager with the certification called for by
Section&nbsp;10.2(c) hereof, or (iii)&nbsp;the Manager, in good faith, believes that the Member&#146;s purpose in requesting the Membership List is an Impermissible Purpose. The remedies provided under this Section&nbsp;10.2(d) to Members requesting
copies of the Membership List are in addition to, and shall not in any way limit, other remedies available to Members under federal law or any applicable state laws. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_61"></A>10.3 <B>Accounting Decisions</B>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">All decisions
as to accounting matters, except as specifically provided to the contrary herein, shall be made by the Manager in accordance with the accounting methods adopted by the Fund for federal income tax purposes
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-40
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 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
or otherwise in accordance with generally accepted accounting principles. Such decisions must be reasonably acceptable to the accountants, and the Manager may rely upon the advice of the
accountants and counsel as to whether such decisions are in accordance with the methods adopted by the Fund for federal income tax purposes or generally accepted accounting principles. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_62"></A>10.4 <B>Reports. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the Manager shall
deliver to each Person who was a Member at any time during such Fiscal Quarter, the following written materials: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">a report containing the same financial information as is contained in the Fund&#146;s quarterly report on Form 10-Q filed with the SEC under the Securities Exchange Act
of 1934, as amended; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">a detailed statement prepared by the Manager setting forth the fees and other compensation and costs and expenses which were paid or reimbursed by the Fund to the
Manager and its Affiliates during such Fiscal Quarter, identified and properly allocated as to type and amount. Such report shall (A)&nbsp;include a detailed statement identifying any services rendered or to be rendered to the Fund and the
compensation received therefor (if any) and (B)&nbsp;summarize the terms and conditions of any contract (if any), which was not filed as an exhibit to the Registration Statement, as amended and in effect as on the Effective Date. The requirement for
such summary shall not be circumvented by lump-sum payments to non-Affiliates who then disburse the funds to, or for the benefit of, the Manager and its Affiliates; and </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">until all Capital Contributions have been invested or committed to investment in Investments and Reserves, used to pay permitted Front-End Fees or returned to the
Members (as provided in Section&nbsp;6.6), a report of all Investments made during such Fiscal Quarter which shall include (A)&nbsp;a description of the types of Investments acquired, (B)&nbsp;the Purchase Price paid for such categories of
Investments, (C)&nbsp;the amounts of Capital Contributions and Indebtedness used to acquire such Investments, (D)&nbsp;the Acquisition Fees and Acquisition Expenses paid (identified by party) in connection therewith and (E)&nbsp;the amount of
Capital Contributions, if any, which remain unexpended and uncommitted to pending Investments as of the end of such Fiscal Quarter. </FONT></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) Within 90 days after the end of each Fiscal Year, the Manager shall deliver to each Person who was a Member at any time during such Fiscal Year the following written materials: </FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">financial statements for the Fund for such Fiscal Year, including a balance sheet as of the end of such Fiscal Year and related statements of operations, cash flows and
changes in Members&#146; equity, which shall be prepared in accordance with generally accepted accounting principles and the rules and regulations of the SEC; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">an analysis, prepared by the Manager (which need not be audited by the Fund&#146;s auditors), of distributions made to the Members during such Fiscal Year separately
identifying the portion (if any) of such distributions from: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(A)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash Flow from operations during such period; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(B)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash Flow from operations during a prior period which had been held as Reserves; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(C)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Proceeds from the Sale of Investments; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(D)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Reserves comprised of Capital Contributions from Members; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">a status report with respect to each piece of Equipment which individually represents at least 10% of the aggregate Purchase Price of the Fund&#146;s Investments held
at the end of such Fiscal Year, which report shall state: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(A)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the condition of each such item of Equipment, to the knowledge of the Manager; </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-41
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<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(B)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">how such Equipment was being utilized as of the end of such Fiscal Year (i.e., leased, operated directly by the Fund or held for lease, repair or sale), to the
knowledge of the Manager; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(C)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the remaining term of any Lease to which such Equipment is subject; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(D)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the projected or intended use of such Equipment during the next following Fiscal Year (i.e., lease; lease renewal; retire or sell); </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(E)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the method used to determine values set forth therein; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(F)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">such other information as may be relevant to the value or use of such Equipment as the Manager deems appropriate; </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">an annual report which shall state: </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(A)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the fees and other compensation and costs and expenses which were paid or reimbursed by the Fund to the Manager and its Affiliates during such Fiscal Year. Such report
shall (A)&nbsp;include a detailed statement identifying any services rendered or to be rendered to the Fund and the compensation received therefor (if any) and (B)&nbsp;summarize the terms and conditions of any contract (if any), which was not filed
as an exhibit to the Registration Statement, as amended and in effect as on the Effective Date. The requirement for such summary shall not be circumvented by lump-sum payments to non-Affiliates who then disburse the funds to, or for the benefit of,
the Manager and its Affiliates; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(B)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">in the case of reimbursed costs and expenses, the Manager shall also prepare an allocation of the total amount of all such items and shall include support for such
allocation to demonstrate how the Fund&#146;s portion of such total amounts were allocated between the Fund and any other Programs in accordance with this Agreement and the respective governing agreements of such other Programs. Such cost and
expense allocation shall be reviewed by the accountants in connection with their audit of the financial statements of the Fund for such Fiscal Year in accordance with the American Institute of Certified Public Accountants United States Auditing
standards relating to special reports and such independent publicly registered accountants shall state that, in connection with the performance of such audit, such independent publicly registered accountants reviewed, at a minimum, the time records
of, and the nature of the work performed by, individual employees of the Manager and its Affiliates, the cost of whose services were reimbursed; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="16%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(C)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">the additional costs of the special review required by this subsection (ii)&nbsp;will be itemized by the independent publicly registered accountants and may be
reimbursed to the Manager and its Affiliates by the Fund in accordance with this subparagraph only to the extent such reimbursement, when added to the cost for all administrative services rendered, does not exceed the competitive rate for such
services as determined in such report; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="10%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="6%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">until all Capital Contributions have been invested or committed to investment in Investments and Reserves, used to pay permitted Front-End Fees or returned to the
Members (as provided in Section&nbsp;6.6), a special report concerning all Investments made during such Fiscal Year which shall include (A)&nbsp;a description of the types of Equipment or Leases acquired, (B)&nbsp;the total Purchase Price paid for
such Investments, (C)&nbsp;the amounts of Capital Contributions and Indebtedness used to acquire such Investments, (D)&nbsp;the Acquisition Fees and Acquisition Expenses paid (identified by party) in connection therewith and (E)&nbsp;the amount of
Capital Contributions, if any, which remain unexpended and uncommitted to pending Investments as of the end of such Fiscal Year. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) The Manager may deliver the quarterly and annual reports electronically by posting the report on the Manager&#146;s website. If the Manager elects to deliver the quarterly and annual reports
electronically, the Manager shall provide a paper copy to any Member that requests one. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-42
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_63"></A>10.5 <B>Tax Returns and Tax Information. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager shall: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) prepare or cause its accountants to prepare, in accordance with applicable laws and regulations, the tax returns (federal, state, local and foreign, if any) of the Fund for each Fiscal Year not later
than 75 days after the end of such Fiscal Year; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) deliver to each Member by within 75 days after the end
of each Fiscal Year, all information necessary for the preparation of Members&#146; federal income tax returns; provided, that the Manager shall deliver a Form K-1 or other statement setting forth such Member&#146;s share of the Fund&#146;s income,
gains, losses, deductions, and items thereof, and credits if any, for such Fiscal Year. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_64"></A>10.6
<B>Federal Tax Elections. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Fund, in the discretion of the Manager, may make elections for federal tax purposes as
follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) in case of a transfer of all or some of the Shares of a Member, the Fund, in the discretion of
the Manager, may timely elect pursuant to Section&nbsp;754 of the Code (or corresponding provisions of future law), and pursuant to similar provisions of applicable state or local income tax laws, to adjust the basis of the assets of the Fund. In
such event, any basis adjustment attributable to such election shall be allocated solely to the transferee; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) all other elections, including, but not limited to, the adoption of accelerated depreciation and cost recovery
methods, required or permitted to be made by the Fund under the Code shall be made by the Manager in such manner as will, in the opinion of the Manager (as advised by counsel or the accountants as the Manager deems necessary) be most advantageous to
the Members as a group. The Fund shall, to the extent permitted by applicable law and regulations, elect to treat as an expense for federal income tax purposes all amounts incurred by it for state and local taxes, interest and other charges which
may, in accordance with applicable law and regulations, be considered as expenses. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_65"></A>10.7 <B>Tax
Matters Partner. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager is hereby designated as the &#147;Tax Matters Partner&#148; under Section&nbsp;6231(a)(7)
of the Code and may hereafter designate its successor as Tax Matters Partner. The Tax Matters Partner is authorized to represent the Fund before the Internal Revenue Service and any other governmental agency with jurisdiction; provided, however,
that (a)&nbsp;the Tax Matters Partner shall provide to the Members a timely summary of each oral and written communication from or to the Internal Revenue Service or any other taxing authority relating to any material Fund Tax matter and shall
promptly furnish to the Manager a copy of any significant correspondence relating thereto, (b)&nbsp;the Tax Matters Partner shall promptly provide to the Manager reasonably detailed accounts of all stages of each administrative or judicial
proceeding relating to Fund Tax matters and shall provide the Manager with sufficient notice thereof to enable them to participate fully therein, and (c)&nbsp;the Tax Matters Partner shall not (i)&nbsp;sign any consent, (ii)&nbsp;enter into any
settlement agreement or (iii)&nbsp;compromise any dispute with the IRS or any other taxing authority without the approval of the Manager. Nothing in this Section&nbsp;10.7 shall limit the ability of any Member to take any action in his individual
capacity relating to Tax audit matters relating to the Fund that is left to the determination of an individual Member under sections 6222 through 6232 of the Code or any similar state or local provision. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_66"></A>10.8 <B>Reports to Federal and State Authorities. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager shall submit to an Administrator any information that such Administrator reasonably requires, including, but not limited to,
reports and statements required to be distributed to Members pursuant to Section&nbsp;10.4. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-43
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_67"></A>10.9 <B>Special Direction and Consent Regarding Possible
Issuance of Final Regulations Affecting Issuance of Partnership Interests for Services. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">In the event that proposed
regulations under,<I> inter alia</I>, Code Sections 83, 704 and 721 and issued by the IRS on May&nbsp;24, 2005 under the docket number REG-105346-03, relating to issuance of partnership equity for services become finalized and, as finalized, would
apply to the Manager&#146;s interest in the Fund upon issuance of Shares in the Fund, the Fund is hereby authorized and directed to make the analogue found in such final regulations to the &#147;safe harbor&#148; election presently described in
Prop. Treas. Reg. Section&nbsp;1.83-3(l)(1), whereby such Manager&#146;s interest would be valued for federal income tax purposes at its so-called &#147;liquidation value,&#148; as such election is further amplified by a Revenue Procedure presently
published in draft form as Notice 2005-43. The Fund and each of its Members, including the Manager, agree to comply with all of the requirements of the safe harbor in connection with interests in the Fund transferred in connection with the
performance of services while the election remains effective, to execute such documentation as the Manager reasonably determines is necessary to comply with such election, and not to take any position for federal income tax purposes inconsistent
with such election. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_68"></A>ARTICLE 11. MEETINGS AND VOTING RIGHTS OF THE MEMBERS. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_69"></A>11.1 <B>Meetings of the Members. </B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) In its sole discretion, the Manager may at any time call a meeting of the Members, and the Manager may submit for
action by Consent of the Members, in lieu of a meeting, any matter on which the Members may vote as set forth in this Article 11. The Manager shall call a meeting of the Members upon receipt of written request(s) for a meeting from Members holding
10% or more of the then outstanding Shares, to act upon any matter on which the Members may vote as set forth in this Article 11. Every such request for a meeting shall state with reasonable specificity (i)&nbsp;the purpose(s) for which such meeting
is to be held and (ii)&nbsp;the text of any matter, resolution or action proposed to be voted upon by the Members at such meeting. Within ten (10)&nbsp;days following the receipt of such a request, the Manager shall give Notice to all Members of
such meeting in the manner and for a time and place as specified in paragraph 11.1(b). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) A Notice of any
such meeting or action by written Consent in lieu of a meeting shall be given to all Members by certified mail and a meeting called pursuant to such Notice shall be held (or Consent action taken) not less than 15 days nor more than 60 days after the
date such Notice is distributed. Such Notice shall be mailed to each Member at his or her recorded address, or at such other address as he or she may have furnished in writing to the Manager for receipt of Notices, and shall state the place, date
and time of such meeting (as the Manager shall determine to be reasonable and convenient to the Members) and shall state the purpose(s) for which such meeting is to be held. If any meeting of the Members is properly adjourned to another time or
place, and if any announcement of the adjournment of time or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting. The presence in person or by proxy of the Majority Interest shall constitute a quorum at
all meetings of the Members; provided, however, that, if there be no such quorum, holders of a majority of the Shares so present or so represented may adjourn the meeting from time to time without further notice, until a quorum shall have been
obtained. No Notice of any meeting of Members need be given to any Member who attends in person or is represented by proxy (except when a Member attends a meeting for the express purpose of objecting at the beginning of the meeting to the
transaction of any business on the ground that the meeting is not lawfully called or convened) or to any Member otherwise entitled to such Notice who has executed and filed with the records of the meeting, either before or after the time thereof, a
written waiver of such Notice. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) For the purpose of determining the Members entitled to vote on any matter
submitted to the Members at any meeting of such Members (or to take action by Consent in lieu thereof), or any adjournment thereof, the Manager or the Members requesting such meeting may fix, in advance, a date as the record date, which shall be a
date not more than fifty (50)&nbsp;days nor less than ten (10)&nbsp;days prior to any such meeting (or Consent action), for the purpose of any such determination. </FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) Any Member may authorize any Person or Persons to act for such Member by
proxy in respect of all matters as to which such Member is entitled to participate, whether by waiving Notice of any meeting, taking action by Consent or voting as to any matter or participating at a meeting of the Members. Every proxy must be
signed by a Member or his or her attorney-in-fact. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at any time by the Member executing it.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) At each meeting of the Members, the Members present or represented by proxy may adopt such rules for the
conduct of such meeting as they shall deem appropriate, provided that such rules shall not be inconsistent with the provisions of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_70"></A>11.2 <B>Voting Rights of the Members. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
Members, acting by Consent of the Majority Interest, may take the following actions without the concurrence of the Manager: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) amend this Agreement; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) dissolve the Fund; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) remove the Manager and elect one or more Substitute Managers; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) approve or disapprove of the Sale or series of Sales of all or substantially all the assets of the Fund. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If the Manager is a Member, it may not vote or consent on matters submitted to a vote of Members regarding the removal of the Manager or
regarding any transaction between the Fund and the Manager. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_71"></A>ARTICLE 12. AMENDMENTS.
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_72"></A>12.1 <B>Amendments by the Manager. </B> </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Subject to Section&nbsp;12.2 of this Agreement and all applicable law, this Agreement may be amended, at any time and from time to time,
by the Manager without the Consent of the Majority Interest to effect any change in this Agreement for the benefit or protection of the Members, including, without limitation: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) to add to the representations, duties or obligations of the Manager or its Affiliates or to surrender any right or
power granted to the Manager herein; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) to cure any ambiguity, to correct or supplement any provision herein
that may be inconsistent with any other provision herein or to add any other provision with respect to matters or questions arising under this Agreement that will not be inconsistent with the terms of this Agreement which would not be inconsistent
with the provisions of this Agreement, and provided that no amendment hereunder will change the voting rights of the Members; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) to preserve the status of the Fund as a &#147;partnership&#148; for federal income tax purposes (or under the Act or any comparable law of any other state in which the Fund may be required to be
qualified); </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) to delete or add any provision of or to this Agreement required to be so deleted or added by
the staff of the SEC, by any other federal or state regulatory body or other agency (including, without limitation, any &#147;blue sky&#148; commission) or by any Administrator or similar such official; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) to permit the Shares to fall within any exemption from the definition of &#147;plan assets&#148; contained in ERISA
Section&nbsp;3(42) or Section&nbsp;2510.3-101 of Title 29 of the Code of Federal Regulations; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) if the Fund
is advised by counsel, by the Fund&#146;s accountants or by the IRS that any allocations of income, gain, loss or deduction provided for in this Agreement are unlikely to be respected for federal income tax purposes, to amend the allocation
provisions of this Agreement, in accordance with the advice of </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-45
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such counsel, such accountants or the IRS, to the minimum extent necessary to effect as nearly as practicable the plan of allocations and distributions provided in this Agreement. Amendments made
by the Manager in reliance upon the advice of the accountants or counsel described above shall be deemed to be made pursuant to the fiduciary obligation of the Manager to the Fund and the Members, and no such amendment or amendments shall give rise
to any claim or cause of action by any Member; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) to change the name of the Fund or the location of its
principal office. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_73"></A>12.2 <B>Amendments with the Consent of the Majority Interest. </B>
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Manager may propose to the Members, in writing, any amendment to this Agreement, which shall require the Consent of the
Majority Interest (except as provided for in Section&nbsp;12.1); provided, however, that no such amendment shall increase the liability of any Member or adversely affect in a disproportionate manner any Member&#146;s share of distributions of cash
or allocations of Profits or Losses for tax purposes or of any investment tax credit amounts of the Fund without in each case the prior written consent of each Member affected thereby. </FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_74"></A>ARTICLE 13. SPECIAL POWER OF ATTORNEY </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_75"></A>13.1 <B>Execution of Power of Attorney.</B> By their subscription for Shares and admission as members
hereunder, each Member hereby grants to the Manager a special power of attorney irrevocably making, constituting and appointing the Manager, its duly appointed officers, and any one of them, as the attorney-in-fact for such Member, with power and
authority to act alone in his name and on his behalf to execute, acknowledge and swear to the execution, acknowledgement and filing of the following documents: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) this Agreement, the Certificate, any separate certificates, as well as any amendments to the foregoing which, under the laws of the State of Delaware or the laws of any other state or other
jurisdiction, are required to be filed or which the Manager deems advisable to file; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) any other instrument
or document which may be required to be filed by the Fund under the laws of any state or other jurisdiction or by any governmental agency, or which the Manager deems advisable to file; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) any document, certificate or instrument required to record or reflect any action of the Members duly taken in the
manner provided for in this Agreement; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) any instrument or document which may be required to effect the
continuation of the Fund, the admission of an additional or Substitute Member, or the dissolution and termination of the Fund in accordance with the terms of this Agreement, or to reflect any reductions in amount of contributions of Members.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_76"></A>13.2 <B>Amendments to Agreement and Certificate of Formation.</B> With respect to any
amendment of this Agreement or any action proposed to be taken or omitted by, or with respect to, the Fund, which amendment or action requires, under the terms of this Agreement, the Consent of the Members, then, on the satisfaction of that
requirement, each Member hereby agrees that the Consent of the Members shall constitute the approval of all of the Members and shall satisfy any unanimity requirements under the Delaware Act. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_77"></A>13.3 <B>Special Power of Attorney.</B> The special power of attorney being granted hereby: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) is a special power of attorney coupled with an interest, is irrevocable, shall survive the death or legal incapacity
of the granting Member, and is limited to those matters herein set forth; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) may be exercised by the Manager
acting alone for each Member by a facsimile signature of such Manager or by one of its officers, or by listing all of the Members executing any instrument with a single signature of a Manager, or of one of the Manager&#146;s officers, acting as
attorney-in-fact; and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-46
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 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) shall survive an assignment by a Member of all or any portion of his
Shares except that, where the Assignee of the Shares owned by a Member has been approved by the Manager for admission to the Fund as a Substitute Member, the special power of attorney shall survive such assignment for the sole purpose of enabling
the Manager to execute, acknowledge and file any instrument or document necessary to effect such substitution. </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="appatoc147678_78">
</A>ARTICLE 14. GENERAL PROVISIONS. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_79"></A>14.1 <B>Notices.</B> Unless
otherwise expressly specified or permitted by the terms of this Agreement, all notices, requests, demands and instructions hereunder shall be in writing and shall be delivered by hand or courier service, or shall be mailed by registered or certified
mail, postage prepaid, or shall be sent by facsimile to the following addresses: (a)&nbsp;if to the Manager, to Macquarie Asset Management Inc., 225 Franklin Street, 17</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> Floor, Suite 1700, Boston, MA 02110, facsimile: (617)&nbsp;457-0648; or (b)&nbsp;if to any Member, at such address as
appears for such Member on Schedule A, or, in either case, at such other address as the relevant party hereto may from time to time designate by written notice to the other parties hereto. Whenever any notice is required to be given hereunder, such
notice shall be deemed given only when such notice is delivered or, if mailed or sent by facsimile, when received, unless otherwise expressly specified or permitted by the terms hereof. Whenever any notice is required to be given by law or this
Agreement, a written waiver thereof signed by the Person entitled to such notice, whether before or after the time stated at which such notice is required to be given, shall be deemed equivalent to the giving of such notice. Notwithstanding the
foregoing, the Fund may provide Notice, the reports required under Section&nbsp;10.4 and the tax information required under Section&nbsp;10.5 electronically, either through delivery to email addresses provided by a Member or by posting such reports
or information to the Fund&#146;s internet website, subject to, and in compliance with, all of the requirements of any applicable federal or state laws, rules or regulations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_80"></A>14.2 <B>Reliance by Third Parties. </B>No Person dealing with the Fund or its assets, whether as assignee, lessee, purchaser, mortgagee, grantee or otherwise, shall be
required to investigate the authority of the Manager in selling, assigning, leasing, mortgaging, conveying or otherwise dealing with any Investments or other assets or any part thereof, nor shall any such assignee, lessee, purchaser, mortgagee,
grantee or other Person entering into a contract with the Fund be required to inquire as to whether the approval of the Members for any such assignment, lease, sale, mortgage, transfer or other transaction has been first obtained. Any such Person
shall be conclusively protected in relying upon a certificate of authority signed by the Manager, or in accepting any instrument signed by the Manager, in the name and behalf of the Fund or the Manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_81"></A>14.3 <B>Entire Agreement.</B> This Agreement, together with all Schedules hereto, constitutes the entire
agreement of the Members relating to the Fund with respect to the subject matter hereof, and supersedes any and all prior contracts or agreements with respect to the subject matter hereof, whether oral or written. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_82"></A>14.4 <B>Effect of Waiver or Consent.</B> A waiver or consent, express or implied, to or of any breach or
default by any Person in the performance by that Person of its obligations hereunder or with respect to the Fund is not a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations
of that Person hereunder or with respect to the Fund. Failure on the part of a Person to complain of any act of any Person or to declare any Person in default hereunder or with respect to the Fund, irrespective of how long that failure continues,
does not constitute a waiver by that Person of its rights with respect to that default until the applicable statute-of-limitations period has run. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_83"></A>14.5 <B>Binding Effect.</B> Subject to the restrictions on Transfers set forth in this Agreement, this Agreement shall be binding on, and inure to the benefit of, the
Members and their respective heirs, legal representatives, successors and permitted assigns. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_84"></A>14.6 <B>Governing Law.</B> This Agreement is governed by and shall be construed in accordance with the
laws of the State of Delaware, excluding any conflict of laws rule or principle that might refer the governance or the </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-47
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construction of this Agreement to the law of another jurisdiction. In the event of a direct conflict between the provisions of this Agreement and any provision of any mandatory provision of the
Act, the applicable provision of the Act shall control. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_85"></A>14.7 <B>Further Assurances.</B> In
connection with this Agreement and the transactions contemplated hereby, each Member shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate or perform the
provisions of this Agreement and those transactions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_86"></A>14.8 <B>Waiver of Certain Rights.</B> To
the fullest extent permitted by law, each Member irrevocably waives any right to maintain any action for dissolution (except pursuant to Section&nbsp;18-802 of the Act) of the Fund or for partition of the property of the Fund. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_87"></A>14.9 <B>Notice to and Consent of Members.</B> By executing this Agreement, each Member acknowledges that
it has actual notice of and consents to (a)&nbsp;all of the provisions hereof (including the restrictions on Transfer set forth in Article 8) and (b)&nbsp;all of the provisions of the Certificate. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_88"></A>14.10 <B>Counterparts.</B> This Agreement may be executed in multiple counterparts with the same effect as
if all signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_89"></A>14.11 <B>Headings.</B> The headings used in this Agreement are for the purpose of reference only and shall not otherwise affect the meaning or interpretation of any
provision of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_90"></A>14.12 <B>Remedies.</B> The Fund, the Manager and the Members
shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement (including costs of enforcement) and to exercise any and all other rights existing in their
favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that the Fund, the Manager or any Member may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation or threatened violation of the provisions of this Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_91"></A>14.13 <B>Severability.</B> Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained
herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><A NAME="appatoc147678_92"></A>14.14 <B>Certain Conventions.</B> Unless the context otherwise requires, the masculine
when used herein shall include the feminine and neuter and vice versa. The words &#147;herein,&#148; &#147;herewith&#148; and &#147;hereof&#148; and words of similar import refer to this Agreement as a whole and not to any particular article,
section or provision. The words &#147;include,&#148; &#147;includes&#148; and &#147;including&#148; shall be deemed to be followed by the phrase &#147;without limitation.&#148; </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-48
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="46%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="49%"></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">MACQUARIE ASSET MANAGEMENT INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">MANAGER:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;David
Fahy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>David Fahy, President</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">INITIAL MEMBER:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;David
Fahy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>David Fahy, President</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">FUND:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/&nbsp;&nbsp;&nbsp;&nbsp;David
Fahy&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>David Fahy, President</B></FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A-49
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_64a"></A>APPENDIX B </B></FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B></B><I></I><B></B><B><I></I></B><B></B><I></I><B></B><B><I></I></B><B></B><I></I><B></B><B><I></I></B><B></B><I></I><B></B><B><I></I></B>
<B>PRIOR PERFORMANCE TABLES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. (the &#147;Manager&#148;) is the manager of Macquarie
Equipment Leasing Fund Two, LLC (the &#147;Fund&#148;) being offered by this prospectus. The Manager is a member of the Macquarie Group. The Macquarie Group is a diversified international provider of banking, financial, leasing, advisory and
investment services. The Macquarie Group has extensive equipment leasing experience, approximately $8.6 billion of equipment leases under management for its own account with over 700 employees located in North America, Europe, Asia and Australia /
New Zealand as at September 30, 2010. The Manager is also the manager of Macquarie Equipment Leasing Fund, LLC (&#147;Fund One&#148;), the only previous publicly-offered equipment leasing fund sponsored by our Manager. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fund One commenced a public offering of up to $157,200,000 of its shares on June 19, 2009. As of September 30, 2010, $13,180,685 of
offering proceeds, net of offering costs, had been received from 450 investors. Fund One was in its offering phase until June 18, 2011. Fund One had acquired equipment and made equipment related investments with a total purchase cost of $6,500,000
as of September 30, 2010. There were no sales or dispositions as of September 30, 2010. Fund One has investment objectives and policies that are substantially similar to those of the Fund. The records for Fund One were maintained in accordance with
accounting principles generally accepted in the United States of America (&#147;GAAP&#148;) for financial statement purposes. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following unaudited tables disclose certain information relating to the performance, operations and investment for Fund One.
Purchasers of shares in the Fund will not acquire any ownership interest in Fund One and should not assume that they will experience investment results or returns, if any, comparable to those experienced by investors in Fund One. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following is a list of the tables set forth in this Exhibit B: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Table&nbsp;I</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Experience in Raising and Investing Funds</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Table&nbsp;II</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Compensation to the Manager and Affiliates</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Table&nbsp;III</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Operating Results of Prior Programs</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Fund
One is the only previous publicly-offered equipment leasing fund sponsored by our Manager. Fund One is currently in its operating phase, and as such the Manager has no prior performance information available for completed programs. Fund One has not
made any sales or disposals of its portfolio investments. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Additional information concerning Fund One is contained in the
Annual Reports on Form 10-K for Fund One, which may be obtained (after their respective filing dates) without charge by contacting Macquarie Asset Management Inc., 225 Franklin St., Suite 1700, Boston, MA 02110 Such Annual Reports on Form 10-K will
also be available upon request at the office of the Securities and Exchange Commission. The results of Fund One should not be considered indicative of the likely results of the Fund. Moreover, the information presented below should not be considered
indicative of the extent to which Fund One will achieve its objectives, because this will in large part depend upon facts which cannot now be determined or predicted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Investors in the Fund should not expect results comparable to those of Fund One or other equipment leasing activities conducted by the Macquarie Group Limited group of companies. Prior performance is
not indicative of future performance. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">B-1
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TABLE I </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>EXPERIENCE IN RAISING AND INVESTING FUNDS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>December 31, 2010
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Unaudited) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The following table sets forth certain information, for the period from the inception of Fund One to December&nbsp;31, 2010, concerning the experience of the Manager in raising and investing funds in the
only publicly-offered equipment leasing fund it has previously offered, Fund One. Fund One information is provided with respect to the manner in which Fund One&#146;s offering proceeds have been applied as at December&nbsp;31, 2010. Fund One had not
completed its offering at that date. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="69%"></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="6%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Fund One</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="2" VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>%&nbsp;of&nbsp;Dollar<BR>Amount&nbsp;Raised</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dollar amount offered</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">157,200,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dollar amount raised, net of redemption</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">20,743,194</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">100</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Less offering expenses:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Sales Commissions</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1,341,671</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">6.47</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dealer Manager Fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(523,779</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.53</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Organizational and Offering Expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(510,536</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.46</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash Reserves</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Offering proceeds available for investment</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">18,367,208</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">88.55</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total assets acquired to date</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9,300,833</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">44.41</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition costs:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Purchase price</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9,212,688</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">44.41</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">276,381</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.33</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">6,764</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.03</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total acquisition costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9,495,833</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">45.78</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Percent leverage (acquisition debt incurred divided by total assets acquired)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date offering commenced</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">June&nbsp;19,&nbsp;2009</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Original offering period (in months)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">24</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Offering period remaining as at December&nbsp;31, 2010 (in months)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.5</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Months to invest 90% of amount available for investment<BR>(measured from the beginning of the offering)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investors in the Fund should not expect results comparable to those of Fund One. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Prior performance is not indicative of future performance. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">B-2
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TABLE II </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>COMPENSATION TO MACQUARIE ASSET MANAGEMENT INC. AND AFFILIATES </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>December
31, 2010 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Unaudited) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The following table sets forth certain information, for the period from the inception of Fund One to December&nbsp;31, 2010, concerning the compensation received by the Manager and its affiliates from the
only publicly-offered equipment leasing fund the Manager has previously offered, Fund One. Fund One had not completed its offering at that date. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="73%"></TD>
<TD VALIGN="bottom" WIDTH="7%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="9%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="6" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Fund One</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Dollar&nbsp;Amount</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>%&nbsp;of&nbsp;Equity<BR>Invested</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date offering commenced</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">June&nbsp;19,&nbsp;2009</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dollar amount raised to date, net of redemption</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">20,743,194</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Offering proceeds and cash generated from operations</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">20,719,202</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amounts paid/accrued to the Manager and its affiliates from proceeds of the&nbsp;offering:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dealer Manager Fees and Selling Commissions</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">523,779</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.69</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Organizational and Offering Expense allowance</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">510,536</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.54</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other Offering Expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Dollar amount of cash generated from operations before deducting such payments/accruals to the Manager and its
affiliates</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">208,090</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.26</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amounts paid/accrued to the Manager:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">276,381</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Asset Management fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">32,143</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.35</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition expense reimbursements</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.00</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Outperformance fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">6,385</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.07</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Operating expense reimbursements</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">850,130</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9.23</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Distributions</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">77,591</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">0.84</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">%</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investors in the Fund should not expect results comparable to those of Fund One. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Prior performance is not indicative of future performance. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">B-3
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TABLE III </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>OPERATING RESULTS OF PRIOR PUBLIC FUNDS&nbsp;&#151;&nbsp;FUND ONE </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>December 31, 2010 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>(Unaudited) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following table summarizes the operating results of Fund
One for the three years ended December&nbsp;31, 2010,&nbsp;December&nbsp;31, 2009 and December&nbsp;31, 2008. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="73%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Years Ended December&nbsp;31,</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2010</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2009</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2008</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Revenues</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">226,924</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Profit (loss) on sale of assets</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Gross revenues</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">226,924</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Less: Operating expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Impairment loss</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Interest expense</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Depreciation and amortization</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(56,877</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Management fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(32,143</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Administrative expense reimbursements</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(850,130</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">General and administrative</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Acquisition fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(195,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Vessel operating expense</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Loss on hedging instruments</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Bad debt expense</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other financial loss</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Other</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(22,728</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(410</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(116</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Noncontrolling interest</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Net income (loss)&nbsp;&#151;&nbsp;GAAP</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(929,954</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(410</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(116</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Net income (loss) allocable to investors&nbsp;&#151;&nbsp;GAAP</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(929,954</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(410</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(116</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Taxable income (loss):</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;from operations</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;from gain (loss) on sales</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash used by operations</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(23,466</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(410</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(116</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash used by investing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(8,942,742</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash generated from financing (before distribution)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">18,428,725</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">5,000</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash generated from operations, sales and refinancing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9,462,517</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(410</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,884</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Less:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash distributions to investors from operations, sales and refinancing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(430,318</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash distributions to Manager from operations, sales and refinancing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(66,598</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash generated from (used by) operations, sales and refinancing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">8,965,601</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">(410</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">)&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">4,884</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">B-4
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TABLE III </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>OPERATING RESULTS OF PRIOR PUBLIC FUNDS&nbsp;&#151;&nbsp;FUND ONE&#151;(continued) </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>December 31, 2010 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Unaudited) </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="75%"></TD>
<TD VALIGN="bottom" WIDTH="3%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>

<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Years Ended December&nbsp;31,</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2010</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2009</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2008</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD></TR>


<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Tax and distributions data per $1,000 investment</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Federal income tax results:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Taxable income (loss)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;from operations</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;from gain (loss) on sales</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Cash distributions to investors</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Source (on GAAP basis):</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;Investment income</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;Return of capital</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:7.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Source (on Cash basis):</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;Operations (current and/or prior periods)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;Sales</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:5.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;Refinancing</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:7.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Weighted average number of additional member shares outstanding</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">994,634</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">500</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amount invested in assets (cost, excluding acquisition fees)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">9,212,688</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amount invested in assets (net book value)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">8,856,640</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#151;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Amount remaining invested in fund assets at December&nbsp;31, 2009</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investors in the Fund should not expect results comparable to those of Fund One. </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Prior performance is not indicative of future performance. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">B-5
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_65"></A>APPENDIX C </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>HOW TO INVEST </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>SUBSCRIPTION AGREEMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A Delaware Limited Liability Company </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>SUMMARY AND INSTRUCTIONS </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="25%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="74%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>1.&nbsp;Subscription&nbsp;Amount</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Complete the information requested in Section 1 on Page
C-8.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The subscription price for each Share is $10.00, subject
to certain exceptions and reductions as described in the prospectus relating to the offering of the Shares (the Prospectus).</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The minimum initial investment is 500 Shares (equaling a
$5,000 minimum investment at $10.00 per Share). </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There is no minimum initial investment for our DRP, or for members of Macquarie Equipment Leasing Fund, LLC who elect to invest all the distributions that they receive
with respect to their investment in that fund in our shares issued under our DRP.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you have already subscribed for the minimum initial investment, you may make additional
investments in any amount.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>2.&nbsp;Registration&nbsp;Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Complete the information requested in Section 2(a) on
Page C-8.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check the appropriate box in Section 2(b) on Page C-8
indicating whether you are a U.S. Citizen with a resident address in the U.S. or a U.S. Resident Alien with a resident address in the U.S. Non-Residents are prohibited from purchasing Shares.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If your investment is in an IRA or Qualified Plan,
trust, custodial account, or profit sharing plan, complete Section 2(c) on Page C-8.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Optional: If you would like to list the person to whom your shares should be
transferred to in the case of death, complete Section 2(d) on Page C-8</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:1px"><FONT SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check the appropriate box in Section 2(e) on Page C-8 if
you:</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:6.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;are (i) an employee of the Macquarie Group of Companies (the Macquarie
Group), or (ii) an immediate family member or person or personal company controlled by a Macquarie Group employee, or (iii) a Macquarie Group company or a company controlled by the Macquarie Group. Such persons may be prohibited from purchasing
Shares.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:6.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;are (i) an employee of a selling dealer, or any of its affiliates, who is
participating in this offering, AND (ii) you are purchasing for your own account or your IRA or qualified plan.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>3. Form of Ownership</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please mark only one box indicating the form of ownership (e.g. individual or corporation)
in Section 3 on Page C-9.</FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-1
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


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<TD WIDTH="69%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>4. Distribution and DRP Elections</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions will be directly deposited into the
bank account that you specify in Section 5 on Page C-9.</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4.00em; text-indent:-2.00em"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may elect to participate in our distribution reinvestment plan (DRP) by checking the box in Section 4 on Page C-9. This allows you to reinvest all or a
portion of your distributions from us by acquiring additional Shares in lieu of cash. The subscription price for Shares under the DRP is $9.00 per Share, and there is no minimum purchase amount.</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may elect to split distributions among two payees or to have
distributions paid to another payee in Section 4 on Page C-9.</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5.&nbsp;Bank&nbsp;Account</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Complete the information requested in Section 5 on Page C-9.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6.&nbsp;Electronic&nbsp;Delivery</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Complete the information requested in Section 6 on Page C-10. By checking
&#147;Yes&#148; and providing your email address, you consent to the electronic delivery to you of prospectus materials and notices associated with this offering instead of receiving those materials in paper form.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>7.&nbsp;Signatures&nbsp;and&nbsp;Initials</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You must sign and initial the appropriate areas in Section 7 on<BR>Page C-10 or your
subscription cannot be accepted.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>8. Further Signatures</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You must sign Section 8 on Page C-10 or your subscription cannot be
accepted.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>9. Selling Dealer Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your Selling Dealer must complete and sign Section 9 on Page&nbsp;C-11 or this
subscription cannot be accepted.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>10.&nbsp;Subscription&nbsp;Funds,&nbsp;Mailing Instructions and Confirmations</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Checks should be made payable to &#147;Macquarie Equipment Leasing Fund Two,
LLC,&#148; unless your Selling Dealer informs you that the minimum offering escrow is still in effect, in which case the checks should be payable to &#147;Wells Fargo Bank as Escrow Agent for Macquarie Equipment Leasing Fund Two, LLC.&#148; Wiring
instructions are available upon request.</FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>NO SUBSCRIPTION AGREEMENT WILL BE ACCEPTED UNLESS IT IS FULLY COMPLETED AND
ACCOMPANIED BY PAYMENT IN FULL. ANY SUBSCRIPTION PAYMENT THAT IS DISHONORED WILL CAUSE THE SUBSCRIPTION AND ANY CERTIFICATE FOR SHARES TO BE VOID AS OF THE SUBSCRIPTION DATE AND SHALL OBLIGATE THE SUBSCRIBER TO PAY ALL COSTS AND CHARGES ASSOCIATED
THEREWITH. OUR MANAGER MAY REJECT ANY SUBSCRIPTION AGREEMENT FOR ANY REASON IN ITS SOLE DISCRETION. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you have any questions about
completing this Subscription Agreement, please call Macquarie Asset Management Inc., Investor Relations at 888-299-8699 or consult your selling dealer. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Important Information for All Subscribers </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Terms used but not defined in this Subscription Agreement have the meanings ascribed to them in the Limited Liability Company Operating Agreement of
Macquarie Equipment Leasing Fund Two, LLC (the &#147;Operating Agreement&#148;). </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">No offer to sell Shares may be made except by means of the Prospectus. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-2
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">You should not rely upon any oral statements by any person, or upon any written information other than as specifically set forth in the Prospectus and
supplements thereto or in promotional brochures clearly marked as being prepared and authorized by Macquarie Asset Management Inc., our Manager, or by Macquarie Capital (USA), Inc., our Dealer Manager, for use in connection with the offering of
Shares to the general public by means of the Prospectus. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">An investment in our Shares involves certain risks and tax consequences, including those described in the Prospectus under the headings &#147;Risk
Factors&#148; and &#147;Federal Income Tax Consequences.&#148; </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Our Shares are subject to substantial restrictions on transferability and there will be no public trading market for the Shares. It may not be possible
for you to readily liquidate your Shares, if at all, even in the event of an emergency. Any transfer of our Shares is subject to our approval and must comply with the terms of Article 8 of our Operating Agreement. There will be no public market for
our Shares. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">The representations that you make under the &#147;Terms of the Subscription Agreement&#148; in no way waive any of your rights under the Delaware
Limited Liability Company Act or applicable federal or state securities laws. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Unless otherwise specified below, you must meet our basic suitability requirements in order to purchase our Shares. In general, you must have either:
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a minimum annual gross income of $70,000 and a minimum net worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a minimum net worth of $250,000 (calculated exclusive of home, home furnishings and automobiles). </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">Basic suitability requirements may vary from state to state. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">You must be either a U.S. citizen with a resident address in the U.S. (individuals only) or a resident alien residing in the U.S. in order to purchase
our Shares. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Important Information for Residents of Certain States </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Alabama Investors.</B> You must meet the general suitability standards set forth above. In addition, your investment in us and similar equipment
leasing programs may not exceed 10% of your liquid net worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>California Investors.</B> The offering is limited to suitable investors only. You must have either (1)&nbsp;a liquid net worth of not less than
$100,000 and a gross annual income of not less than $75,000, or (2)&nbsp;a liquid net worth of $250,000, in both instances exclusive of your home, home furnishings and automobiles. In addition, your investment in us may not exceed 10% of your net
worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Iowa Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates may not
exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Kansas Investors.</B> Under suitability guidelines of the Office of the Kansas Securities Commissioner, you are cautioned to carefully evaluate
whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash
equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early
distribution. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Kentucky Investors.</B> You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Michigan Investors.</B> You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliated
programs may not exceed 10% of your liquid net worth. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-3
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Missouri Investors. </B>You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of
your net worth, calculated exclusive of home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Ohio Investors.</B> You must meet the general suitability standards set forth above. In addition, your investment in us and in affiliated programs
may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Oklahoma Investors.</B> You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth, calculated exclusive of your home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Oregon Investors.</B> You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of your
net worth, calculated exclusive of home, home furnishings and automobiles. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Pennsylvania Investors. </B>You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates
may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. Because the minimum offering amount is less than $20,000,000, which represents 10% of the maximum offering amount, you are cautioned to
carefully evaluate the program&#146;s ability to fully accomplish its stated objectives and to inquire as to the current dollar volume of program subscriptions. In addition, subscription proceeds of Pennsylvania investors will be held in an escrow
account until we receive and accept subscriptions for at least $10,000,000 in offering proceeds. We must offer you the opportunity to rescind your subscription if we have not received subscriptions for $10,000,000 within 120 days of the date the
escrow agent receives your subscription proceeds. We must repeat this offer to you every 120 days during the offering period until we have received and accepted subscriptions for $10,000,000. </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Tennessee Investors.</B> You must meet the general suitability standards set forth above. In addition, your investment in us must not exceed ten
percent (10%)&nbsp;of your liquid net worth. </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Vermont Investors.</B> You must meet the general suitability standards set forth above. In addition, your maximum investment in us and our
affiliates may not exceed 10% of your net worth. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Consent to Electronic Delivery of Offering Materials </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Equipment Leasing Fund Two, LLC (the &#147;Fund&#148;) will deliver quarterly reports and annual reports to you electronically
by way of us posting the quarterly reports and annual reports to our website (www.macquarie.com/mami). The Fund can deliver offering materials to you electronically, instead of in paper form. The delivery of offering materials to you electronically
is optional. By checking the &#147;Yes&#148; box and providing your email address in Section&nbsp;6 on Page C-8, you consent to having the Fund electronically deliver offering materials to you, including: </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prospectuses;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prospectus supplements;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prospectus amendments;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;supplemental sales materials;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;notices; and</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-left:4.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;distribution statements and other information.</FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(collectively, the &#147;Offering Materials&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Fund may accomplish electronic delivery via: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">posting Offering Materials to our website (www.macquarie.com/mami). You will be notified that such materials are available for viewing on the website
by e-mail, physical mail or telephone; and </FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
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<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">sending e-mails to investors containing Offering Materials. </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-4
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">You may need to download a portable document format (.pdf) .document
viewer, such as Adobe Acrobat<FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&reg;</SUP></FONT>, in order to view certain Offering Materials. Investors can download the Adobe
Acrobat<FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP STYLE="vertical-align:baseline; position:relative; bottom:.8ex">&reg;</SUP></FONT> software free of charge at http://www.adobe.com/products/acrobat/readermain.html. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">If you would like to update your email address, or if you are otherwise in need of assistance in connection with electronic delivery of
Offering Materials, you should contact Macquarie Asset Management Inc., Investor Relations at 888-299-8699. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">You may revoke
your consent to electronic delivery of offering materials at any time by providing timely notice of revocation to the Fund. You may elect to receive paper copies of Offering Materials at any time upon request, with or without revoking this consent.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-5
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUBSCRIPTION AGREEMENT </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A Delaware Limited Liability Company </FONT></P> <P STYLE="margin-top:4px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TERMS OF SUBSCRIPTION AGREEMENT
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">By signing your name to Section&nbsp;7 and Section&nbsp;8 on Page C-10, you thereby agree to the following terms and
conditions of this Subscription Agreement: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. <I>Subscription</I>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">1.1. You agree to (i)&nbsp;subscribe for the number and dollar amount of Shares set forth in Section&nbsp;1 on Page C-8; (ii)&nbsp;agree to become a member of Macquarie Equipment Leasing Fund Two, LLC
(the &#147;Fund&#148;) upon the acceptance of your subscription by Macquarie Asset Management Inc. (the &#147;Manager&#148;); and (iii)&nbsp;adopt and to be bound by each and every provision of the Fund&#146;s Limited Liability Company Operating
Agreement (the &#147;Operating Agreement&#148;) and this Subscription Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1.2. You have tendered good funds with this
Subscription Agreement in full payment for the Shares as specified in Section&nbsp;1 on Page C-8. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. <I>Grant of Special Power of
Attorney</I>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.1. You grant to the Manager a special power of attorney irrevocably making, constituting and appointing the
Manager, its duly appointed officers, and any one of them, as your attorney-in-fact, with power and authority to act alone in your name and on your behalf to the full extent, and for the purposes and duration, set forth in Article 13 of the
Operating Agreement, all of the terms of which are hereby incorporated herein by this reference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Such purposes include,
without limitation, the power to make, execute, sign, acknowledge, affirm, deliver, record and file any (a)&nbsp;document or instrument that the Manager deems necessary or desirable to carry out fully the provisions of the Operating Agreement (in
the manner and for the purposes provided in Section&nbsp;13.1 of the Operating Agreement) and (b)&nbsp;amendment to the Operating Agreement and to the Certificate of Formation of the Fund (in the manner and for the purposes provided in
Section&nbsp;13.1 of our Operating Agreement, including, without limitation, admission of members to the Fund and any application, certificate, instrument, affidavit or other document required or appropriate in connection with registration or
documentation of the Fund&#146;s investments). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2.2. The special power of attorney being granted is a special power of
attorney coupled with an interest, is irrevocable, shall survive your death or legal incapacity, and is limited to those matters set forth in Section&nbsp;13.1 of the Operating Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3. <I>Subscriber Representations</I>. As a condition to you being admitted as a member of the Fund, you hereby represent that: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3.1. You have either (i)&nbsp;a minimum annual gross income of $70,000 and a minimum net worth of $70,000 (calculated exclusive of your home, home furnishings and automobiles); or (ii)&nbsp;a minimum net
worth of $250,000 (calculated exclusive of your home, home furnishings and automobiles); and if you reside in a state for which more stringent suitability standards are required, which states and standards are set forth in the Prospectus, you meet
such applicable standards. In the case of fiduciary accounts (such as IRAs or trusts), these minimum standards must be met by the beneficiary, the fiduciary account (such as the IRA), or by the donor or grantor who directly or indirectly supplies
the funds to purchase the Shares if the donor or grantor is the fiduciary. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.2. If the subscriber is an IRA or a Qualified
Plan, it has been accurately identified as such in Section 2(c) on Page C-8 and in Section 3 on Page C-9. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-6
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.3. You have accurately identified yourself in Section&nbsp;2(b) on Page C-8 as a U.S.
Citizen, resident in the U.S. (individuals only) or as a U.S. resident alien; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.4. Each subscriber who is purchasing
Shares for individual ownership (as indicated in Section&nbsp;2(a) on Page C-8) is in fact purchasing for his or her or its own account and not with a view to distribution. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3.5. Any member of the Fund who becomes a &#147;foreign partner&#148; as that term is used in Section&nbsp;1446 of the Internal Revenue Code agrees to sell for cash, all or a portion of the member&#146;s
Shares if the Fund exercises its right to purchase such member&#146;s Shares on such terms and conditions as set forth in the Operating Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">3.6. Additional Fiduciary and Entity Representations. If the person signing this Subscription Agreement is doing so on behalf of another person or entity who is the Subscriber, including, without
limitation, a corporation, a limited liability company, a partnership, an IRA, a Qualified Plan, or a trust (other than a Qualified Plan), such signatory, by signing his/her/its name in Section&nbsp;7 of Page C-10, thereby represents and warrants
that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) He or she is duly authorized to (i)&nbsp;execute and deliver this Subscription Agreement,
(ii)&nbsp;make the representations contained herein on behalf of the Subscriber and (iii)&nbsp;bind the Subscriber thereby; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) This investment is an authorized investment for Subscriber under applicable documents and/or agreements (articles of incorporation or corporate by-laws or action, partnership agreement, trust
indenture, etc.) and applicable law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3.7. Additional Representations Concerning Employees of Macquarie Group. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) Certain employees of the Macquarie Group who are involved in the business of the Fund, its Manager or the Dealer
Manager (Macquarie Capital (USA) Inc.), and the immediate family members and persons or personal companies controlled by any such Macquarie Group employees, and Macquarie Group companies and companies controlled by the Macquarie Group, are
prohibited from purchasing Shares. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) The following individuals are prohibited from purchasing our Shares:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) Members of the Manager&#146;s board of directors or investment committee; </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) Macquarie Group employees who are substantially involved in the day-to-day operations of the Fund or its Manager;
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) Macquarie Group employees who are assigned to the Dealer Manager and who are involved in the marketing
of our Shares; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv) Macquarie Group employees who exercise oversight of any individuals described in
(i)&nbsp;through (iii)&nbsp;above; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(v) immediate family members and persons or personal companies
controlled by any such Macquarie Group employee contemplated in subsection (b)(i) through (b)(iv). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) If the
Subscriber is a Macquarie Group employee or an immediate family member or person or personal company controlled by a Macquarie Group employee, by signing this Subscription Agreement the Subscriber represents and warrants that he or she has
accurately identified himself or herself in Section&nbsp;2(e) on Page C-8. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. <I>Distributions.</I> In the event that distributions cannot be
directly deposited into the bank account(s) that you specify in Section&nbsp;5 on Page C-9, distributions may, in the Manager&#146;s sole discretion, be paid by check mailed to the address provided in Section&nbsp;2 on Page C-8. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. <B>SUBSTITUTE FORM W-9: Under penalty of perjury, by signing his/her/its name in Section&nbsp;7 on Page C-10, each Subscriber thereby certifies that:
</B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5.1. The Taxpayer Identification Number or Social Security Number listed in Section&nbsp;2(a) or 2(c) (if applicable)
on Page C-8 is correct; </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-7
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5.2. He/she/it is not subject to backup withholding either because the Internal Revenue
Service has (i)&nbsp;not notified such Subscriber that he/she/it is subject to backup withholding as a result of a failure to report all interest or distributions or (ii)&nbsp;has notified such Subscriber that he/she/it is no longer subject to
backup withholding. (If a subscriber has been notified that he/she/it is currently subject to backup withholding, strike the language under this Section&nbsp;5.2 before signing); and </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>5.3. He/she/it is a U.S. person. (The definition of &#147;U.S. person&#148; includes U.S. citizens and U.S. resident aliens).
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>UPON THE SUBSCRIBER&#146;S EXECUTION OF THIS SUBSCRIPTION AGREEMENT AND ACCEPTANCE THEREOF BY THE MANAGER, THIS SUBSCRIPTION AGREEMENT
(CONSISTING OF PAGES C-5 THROUGH C-13) WILL BECOME A PART OF THE OPERATING AGREEMENT. </B></FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-8
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUBSCRIPTION AGREEMENT</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">A Delaware Limited Liability
Company</FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUBSCRIBER
INFORMATION</B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Phone: (888) 299
8699</B></FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>1.</B></FONT></TD>
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<TD VALIGN="top" ROWSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Subscription Amount</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(check the applicable box and complete the adjacent blanks)</FONT></P></TD>
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<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B></B><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT><B></B><B>&nbsp;&nbsp;</B>Initial Investment<B></B></FONT></P></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B></B><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT><B></B><B>&nbsp;&nbsp;</B>Additional&nbsp;Investment<B></B></FONT></TD>
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<TD VALIGN="top" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.75em; text-indent:-1.50em"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;Investor
In Macquarie Equipment Leasing Fund, LLC investing distributions from that fund into the DRP</FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">For Initial and Additional Investments:</FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Dollar&nbsp;Amount&nbsp;of&nbsp;Shares:</FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
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<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">Number of
Shares:&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="21"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>The minimum initial investment is $5,000. No minimum investment applies for the DRP.</I></FONT></P></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2.</B></FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Registration</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Information</B></FONT></P></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(a)</B></FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Subscriber Information</B></FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Name(s):</FONT></P></TD>
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<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD></TR>
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Street Address:</FONT></P></TD>
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<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD></TR>
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<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City&nbsp;and&nbsp;State)</FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Zip&nbsp;Code)</FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Telephone Numbers:</FONT></P></TD>
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<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;&nbsp;</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Daytime)</FONT></P></TD>
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<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Evening)</FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Social Security or Tax I.D. No.(s):</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date of Birth:</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(b)</B></FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Citizenship</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>Non-Residents are prohibited from purchasing Shares.</I></FONT></P></TD>
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<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;U.S. Citizen with a resident address in the U.S.</FONT></P>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"> <FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;U.S. Resident Alien with a resident address in the U.S.</FONT></TD>
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<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(c)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Trustee or Custodial Information (if applicable)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Trustee or Custodian&#146;s Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">FBO</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Tax I.D.:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date&nbsp;Trust&nbsp;or&nbsp;Account&nbsp;Est:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px; margin-top:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px; margin-top:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD>
<TD NOWRAP VALIGN="bottom"> <P STYLE="margin-bottom:1px; margin-top:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Address:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City&nbsp;and&nbsp;State)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Zip&nbsp;Code)</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Name of Contact:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Phone&nbsp;No.&nbsp;of&nbsp;Contact:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;</FONT><BR></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT><BR></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U></U>&nbsp;&nbsp;</FONT><BR></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="20"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(d)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Transfer on Death Beneficiary Information (OPTIONAL &#150; For Individual or Joint Accounts Only)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Name(s):</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19" ALIGN="right">
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Social Security or Tax I.D. No.(s):</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(e)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Macquarie and Selling Dealer Employees</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Check if:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19">
<P STYLE="margin-top:0px;margin-bottom:0px; margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You are (i) employed by the
Macquarie Group, or (ii) an immediate family member or person or personal company controlled by a Macquarie Group employee, or (iii) a Macquarie Group company or a company controlled by the Macquarie Group.</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>Certain employees of the Macquarie Group, their immediate family members and persons or personal companies controlled by Macquarie
Group employees are prohibited from purchasing Shares. See Section 3.7 on Page C-6 for more information.</I></FONT></P></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You are (i) an employee of a
selling dealer, or any of its affiliates, who is participating in this offering, AND (ii) you are purchasing for your own account or your IRA or qualified plan.</FONT></P></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="27"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>3.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Form of Ownership</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">(check only one box)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Individual Ownership</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Spouses as community property</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Joint&nbsp;Tenants&nbsp;with right&nbsp;of&nbsp;survivorship</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Tenants in Common</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Limited liability company*</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;C corporation*</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;S&nbsp;corporation*</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Partnership*</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;IRA or Qualified Plan</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Trust*</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Custodial&nbsp;Account</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Profit Sharing Plan</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="4"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Other*:&nbsp;<U></U></FONT></P></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS"></FONT><U></U>&nbsp;&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="21"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>*&nbsp;&nbsp;Please provide, as is relevant, a copy of the resolution to purchase the shares, the corporation
by-laws, the partnership agreement, instrument creating the trust and/or the articles of organization.</I></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="27"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-9
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="1%"></TD>
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<TD WIDTH="6%"></TD>
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<TD WIDTH="6%"></TD>
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<TD WIDTH="10%"></TD>
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<TD WIDTH="10%"></TD>
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<TD WIDTH="6%"></TD>
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<TD WIDTH="4%"></TD>
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<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
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<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="22%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>4.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Distribution Election &amp;</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>DRP Election</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">Unless otherwise checked below, distributions made by the Fund will be directly deposited into the account specified in Section 5 on Page C-9. Check the applicable
box(es) below if you would instead like to:</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp; Receive distributions via check. If you choose this option, distributions will be sent to your address
listed in Section 2(a) (or in the case of Trustee or Custodial accounts, to the address listed in Section 2(c)).</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp; Have all or a portion of distributions made during the Offering Period reinvested pursuant to the
Distribution Reinvestment Plan. <B>If you choose this option, you must choose one of the following sub-options:</B></FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp; 100% of Cash Distributions on all Shares are to be reinvested pursuant to the Distribution Reinvestment
Plan. After the Offering Period, distributions made by the Fund will be <B>directly deposited into the bank account</B> specified in Section 5 below. <B>You must also complete section 5 below</B>.</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp; 100% of Cash Distributions on all Shares are to be reinvested pursuant to the Distribution Reinvestment
Plan. After the Offering Period, distributions made by the Fund will be <B>made by check</B> sent to the address listed in Section 2.</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.0% of Cash Distributions on all Shares are to be reinvested pursuant to the
Distribution Reinvestment Plan. The remainder distributions, and all distributions made by the Fund after the Offering Period, will be <B>directly deposited into the bank account</B> specified in Section 5 below. <B>You must also complete section 5
below</B>.</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.0% of Cash Distributions on all Shares are to be reinvested pursuant to the
Distribution Reinvestment Plan. The remainder distributions, and all distributions made by the Fund after the Offering Period, will be <B>made by check</B> sent to the address listed in Section 2.</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Split distributions between two payees or make distributions to an alternative payee. If you choose this
option, you must complete the Special Payment Instruction Form on Page C-13.</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;<B>For Investors in Macquarie Equipment Leasing Fund, LLC ONLY: </B>Have all distributions from my
investment in Macquarie Equipment Leasing Fund, LLC reinvested pursuant to the Distribution Reinvestment Plan.</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="25"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>5.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="23"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Account</B> Information. All distributions made by the Fund will be paid by direct deposit into the following account, unless you have elected to receive
distributions by check in Section 4 above. Additionally, (a) any distributions during the Offering Period to be reinvested pursuant to the Distribution Reinvestment Plan as directed in Section 4 above, and (b) any split or alternative payees as
directed in the Special Payment Instruction Form on Page C-12, will not be paid by direct deposit into the following account. <B>You must complete this section unless you have either (a) elected to receive distributions via check in Section 4 above,
or (b) completed the Special Payment Instruction Form on Page C-13.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="18"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Payee Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="17" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Institution Account Information</B></FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="7"></TD>
<TD HEIGHT="8" COLSPAN="18"></TD></TR>
<TR>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="17"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Institution)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Branch No.)</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="17"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Address of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City and State)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">Zip&nbsp;Code</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="17"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Telephone No. of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="17" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Account)</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="17"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Social Security or Tax I.D. No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Account No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Account&nbsp;Type)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Routing&nbsp;No.)</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="25"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="25"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>6.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Electronic Delivery</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="7"><FONT STYLE="font-family:Times New Roman" SIZE="1">Do you consent&nbsp;to&nbsp;the&nbsp;electronic&nbsp;delivery to you of materials&nbsp;associated&nbsp;with&nbsp;this&nbsp;offering? </FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="7"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;
Yes</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;No</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD ROWSPAN="2" VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(E-mail Address (please print, and include domain extension (.com, .net, etc.)))</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="25"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>7.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Signatures&nbsp;and Initials</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">The undersigned confirms that he/she/it/or each of them:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Has had the Prospectus for at least five (5) days.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Acknowledges that an investment in the Shares is not liquid and
may not be liquid for 8 years or longer.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Declares that, to the best of his/her/its knowledge, all
information in Sections 1 through 6 of Pages B-8 to B-9 is accurate and may be relied upon by the Manager.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Is purchasing the Shares for his/her/its own
account.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Has either (i) a minimum annual gross income of $70,000 and a
minimum net worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or (ii) a minimum net worth of $250,000 (calculated exclusive of home, home furnishings and automobiles) <B>AND</B>, if you reside in a state for which
more stringent suitability standards are required, as described in the Prospectus, you meet such applicable standards.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Will inform the Fund of any change in residence.</FONT></TD></TR>

<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Acknowledges that investments in the Fund are not deposits with or other
liabilities of Macquarie Bank Limited ABN 46 008 583 542, or of any entity in the Macquarie Group and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie Bank Limited nor
any other member company of the Macquarie Group guarantees any particular rate of return or the performance of the Fund nor do they guarantee the repayment of capital from the Fund.</FONT></TD></TR></TABLE>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-10
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="30%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD></TR>

<TR>
<TD COLSPAN="3" VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup
withholding.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s&nbsp;Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="25"> <P STYLE="line-height:4px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>8.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Further Signatures &#150; Power of Attorney</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>The undersigned confirms that he/she/it or each of them grant to the Manager a special power of attorney irrevocably making, constituting and appointing the
Manager, its duly appointed officers, and any one of them, as his/her/its attorney-in-fact, with power and authority to act alone in his/her/its name and on his/her/its behalf to the full extent, and for the purposes and duration, set forth in
Article 13 of the Limited Liability Company Operating Agreement (the &#147;Operating Agreement&#148;), all of the terms of which are hereby incorporated herein by this reference. Such purposes include, without limitation, the power to make, execute,
sign, acknowledge, affirm, deliver, record and file any (a) document or instrument that the Manager deems necessary or desirable to carry out fully the provisions of the Operating Agreement (in the manner and for the purposes provided in Section
13.1 of the Operating Agreement) and (b) amendment to the Operating Agreement and to the Certificate of Formation of Macquarie Equipment Leasing Fund Two, LLC (in the manner and for the purposes provided in Section 13.1 of the Operating Agreement,
including, without limitation, admission of members to Macquarie Equipment Leasing Fund Two, LLC and any application, certificate, instrument, affidavit or other document required or appropriate in connection with registration or documentation of
Macquarie Equipment Leasing Fund Two, LLC&#146;s investments).</B></FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="22"></TD></TR>
<TR>
<TD COLSPAN="3" VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>The special power of attorney being granted is a special power of attorney coupled with an interest, is irrevocable, shall survive his/her/its death or legal
incapacity, and is limited to those matters set forth in Section 13.1 of the Operating Agreement.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s&nbsp;Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR></TABLE> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="13%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD></TR>
<TR>
<TD VALIGN="top" ROWSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>9.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Selling&nbsp;Dealer Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">This subscription has been solicited by a:</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT> FINRA Licensed Registered Representative</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT> Registered Investment Advisor</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">The registered representative/registered investment advisor who solicited your subscription must sign below and by doing so represents that both he or she and/or the
Selling Dealer/Registered Investment Advisory Firm:</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is, in the case of a registered representative, duly licensed by and in good
standing with FINRA or, in the case of a registered investment advisor, is a duly registered investment advisor under the Investment Advisers Act of 1940, and may lawfully offer the Shares in this offering in the State(s) listed in Section
2(a).</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has reasonable grounds to believe, based on information obtained from you
concerning your investment objectives, other investments, financial situation and needs, and any other matters, that you (i) meet the minimum income and net worth standards established for the Fund; (ii) can reasonably benefit from the Fund based on
your overall investment objectives and portfolio structure; (iii) are able to bear the economic risk of the investment based on your overall financial situation; and (iv) have apparent understanding of: (1) the fundamental risk of the investment;
(2) the risk that the subscriber may lose the entire investment; (3) the lack of liquidity of the shares; (4) the restrictions on transferability of the shares; (5) the background and qualifications of our manager; and (6) the tax consequences of
the investment.</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;informed you of the risk of ownership and limited liquidity of the Shares and
has delivered a current copy of our Prospectus to you.</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;complied in all material respects with the terms of the Selling Dealer
Agreement.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT><B> FINRA Licensed Registered Representatives ONLY</B>: Tick here if selling commissions are
waived.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(a) &nbsp;&nbsp;&nbsp;&nbsp;Selling Dealer</B></FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="7" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Telephone&nbsp;No.)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(b)&nbsp;&nbsp;&nbsp;&nbsp;Registered&nbsp;Representative</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="7" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Rep. No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Telephone&nbsp;No.)</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City and State)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Zip Code)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(c) &nbsp;&nbsp;&nbsp;&nbsp;Signature</B></FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Print Name)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Authorized&nbsp;Signature&nbsp;&#150;&nbsp;Branch&nbsp;Manager&nbsp;or&nbsp;Registered&nbsp;Principal)</FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="15"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-11
</FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="9%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="19%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="18%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="18%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>10.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ROWSPAN="2" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;<BR>&nbsp;<BR>&nbsp;<BR>&nbsp;</B></FONT></TD>
<TD ROWSPAN="2" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Subscription<BR>Checks,&nbsp;Mailing<BR>Instructions&nbsp;and<BR>Confirmations</B></FONT></TD>
<TD ROWSPAN="2" NOWRAP VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;&nbsp;<BR>&nbsp;&nbsp;<BR>&nbsp;&nbsp;<BR>&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Unless the subscriber is an IRA or Qualified Plan, mail your completed subscription package to:</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="5" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Macquarie Equipment Leasing Fund Two, LLC</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">c/o ACS Securities Services, Inc.</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">3988 N. Central Expressway</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Building 5, 6th Floor</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Dallas, TX
75204</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">If the subscriber is an IRA or Qualified Plan, mail all the subscription documents to the designated custodian of the account.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">Your subscription package should contain:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Completed Subscription Agreement (required)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Special Payment Instruction Form for Distributions (if applicable)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Check or wire made payable as specified below (required)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Checks should be made payable to &#147;Macquarie Equipment Leasing Fund Two, LLC,&#148; unless your Selling Dealer
informs you that the minimum offering escrow is in effect, in which case the checks should be payable to &#147;Wells Fargo Bank as Escrow Agent for Macquarie Equipment Leasing Fund Two, LLC.&#148;</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Wiring instructions are available upon request.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>For any questions, please call (888) 299 8699.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="17"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="17"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Office Use Only</B></FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Admit&nbsp;Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Account Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Amount:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Number&nbsp;of&nbsp;Shares:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Account&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Wire&nbsp;/Check&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Blue Sky State:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Registered&nbsp;Rep.&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Firm Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Custodian&nbsp;ID&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Transfer&nbsp;Agent&nbsp;Reviewer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="17"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="17"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-12
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SUBSCRIPTION AGREEMENT </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A Delaware Limited Liability Company </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SPECIAL PAYMENT INSTRUCTIONS
</B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Use this Special Payments Instructions Form if you elected under Section&nbsp;4 on Page C-9 to receive direct deposits of
distribution, split distributions between two payees, or to have distributions paid to an alternative payee. Note that all distributions to an IRA or Qualified Plan must be sent to the custodian. With the exception of IRA or Qualified Plans, you may
designate up to two accounts or payees for distributions. Original signatures of all joint investors or custodial authorizations are required. All percentages of distributions should equal 100%, including any allocation to the Distribution
Reinvestment Plan. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="28%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="26%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="16"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="16"> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>FIRST PAYEE</B></FONT></P></TD>
<TD VALIGN="top"> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="16" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">To Receive &nbsp;&nbsp;&nbsp;&nbsp;% of Distributions</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD COLSPAN="16" VALIGN="top"></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Payee Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Bank Account Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Bank)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Branch&nbsp;No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Address of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City&nbsp;and&nbsp;State)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">Zip&nbsp;Code</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Telephone No. of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Account)</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Social Security or Tax I.D. No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Account No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Account&nbsp;Type)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="8" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Bank Routing No.)</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="17"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="16"> <P STYLE="margin-top:0px;margin-bottom:0px;border-bottom:2px solid #000000">&nbsp;</P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>SECOND PAYEE</B></FONT></P></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px;border-bottom:2px solid #000000"></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="16" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">To Receive &nbsp;&nbsp;&nbsp;&nbsp;% of Distributions</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Payee Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Bank Account Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Bank)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Branch&nbsp;No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Address of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City&nbsp;and&nbsp;State)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">Zip Code</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Telephone No. of Payee)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="10" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name of Account)</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="10"></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Social Security or Tax I.D. No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Account No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Account&nbsp;Type)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="4" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Bank&nbsp;Routing&nbsp;No.)</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="17"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="16"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="17"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="16" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>SIGNATURES</B></FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;&nbsp;</B></FONT></TD></TR></TABLE>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="44%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="43%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">C-13
</FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_65a"></A>APPENDIX D </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TR>
<TD WIDTH="14%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="84%"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center">


<IMG SRC="g147678g76e41.jpg" ALT="LOGO">
</TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ADDITIONAL INVESTMENT SUBSCRIPTION AGREEMENT</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2">A Delaware Limited Liability Company</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px" align="left">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Phone: (888) 299 8699</B></FONT></P></TD></TR></TABLE> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">This form may be used by any current Subscriber
(the &#147;Subscriber&#148;) in Macquarie Equipment Leasing Fund Two, LLC (the &#147;Fund&#148;), who desires to purchase additional shares of the Fund&#146;s membership interests pursuant to this Additional Subscription Agreement and who purchased
their shares directly from the Fund. Subscribers who acquired shares other than through use of a Subscription Agreement (e.g., through a transfer of ownership or TOD) and who wish to make additional investments must complete the Macquarie Equipment
Leasing Fund Two, LLC Subscription Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Upon the Subscriber&#146;s execution of this Additional Investment Subscription Agreement
and acceptance thereof by the Manager, this Additional Investment Subscription Agreement will become part of the Subscriber&#146;s original Subscription Agreements. </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>1.</B></FONT></TD>
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<TD VALIGN="top" ROWSPAN="2"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Subscription Amount</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(complete the adjacent blanks)</FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Dollar&nbsp;Amount&nbsp;of&nbsp;Additional Shares to be Purchased:</FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
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<TD VALIGN="bottom" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1">Number of
Shares:&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>The minimum additional investment is $1,000.</I></FONT></TD></TR>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>2.</B></FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Registration</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Information</B></FONT></P></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(a)</B></FONT></TD>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Subscriber Information</B></FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Name(s):</FONT></P></TD>
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<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Street Address:</FONT></P></TD>
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<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Telephone Numbers:</FONT></P></TD>
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<TD VALIGN="bottom" COLSPAN="3" ALIGN="center"> <P STYLE="margin-left:1.00em; text-indent:-1.00em" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Daytime)</FONT></P></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Social Security or Tax I.D. No.(s):</FONT></TD>
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<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date of Birth:</FONT></TD>
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<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(b)</B></FONT></TD>
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<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Citizenship</B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><I>Non-Residents are prohibited from purchasing Shares.</I></FONT></P></TD>
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<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;U.S. Citizen with a resident address in the U.S.</FONT></P>
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<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"> <FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;U.S. Resident Alien with a resident address in the U.S.</FONT></TD>
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<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(c)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Trustee or Custodial Information (if applicable)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Trustee or Custodian&#146;s Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">FBO</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD>
<TD HEIGHT="5" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Tax I.D.:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date&nbsp;Trust&nbsp;or&nbsp;Account&nbsp;Est:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3">
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="20"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Address:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street&nbsp;Address)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="5" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City&nbsp;and&nbsp;State)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Zip&nbsp;Code)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Name of Contact:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Phone&nbsp;No.&nbsp;of&nbsp;Contact:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="20"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(d)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Transfer on Death Beneficiary Information (OPTIONAL &#150; For Individual or Joint Accounts Only)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<P STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">Name(s):</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="19" ALIGN="right">
<P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">Social Security or Tax I.D. No.(s):</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="27"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">D-1
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="18%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="5%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="17%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="5%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="8%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD></TR>

<TR>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>3.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Signatures&nbsp;and Initials</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">The undersigned confirms that he/she/it/or each of them:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Has had the Prospectus for at least five (5) days.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Acknowledges that an investment in the Shares is not liquid and
may not be liquid for 8 years or longer.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Declares that, to the best of his/her/its knowledge, all
information in Sections 1 through 2 of Page D-1 is accurate, and all information contained in the original Subscription Agreement is accurate and current, and may be relied upon by the Manager.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Is purchasing the Shares for his/her/its own
account.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Has either (i) a minimum annual gross income of $70,000 and a
minimum net worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or (ii) a minimum net worth of $250,000 (calculated exclusive of home, home furnishings and automobiles) <B>AND</B>, if you reside in a state for which
more stringent suitability standards are required, as described in the Prospectus, you meet such applicable standards.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U></U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Will inform the Fund of any change in residence.</FONT></TD></TR>

<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="22"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Initial(s) <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>) Acknowledges that investments in the Fund are not deposits with or other
liabilities of Macquarie Bank Limited ABN 46 008 583 542, or of any entity in the Macquarie Group and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie Bank Limited nor
any other member company of the Macquarie Group guarantees any particular rate of return or the performance of the Fund nor do they guarantee the repayment of capital from the Fund.</FONT></TD></TR>
<TR>
<TD HEIGHT="5" COLSPAN="3"></TD>
<TD HEIGHT="5" COLSPAN="22"></TD></TR>
<TR>
<TD COLSPAN="3" VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="21"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup
withholding.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="6"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD>
<TD HEIGHT="16" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s&nbsp;Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="6"></TD>
<TD HEIGHT="16" COLSPAN="4"></TD>
<TD HEIGHT="16" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">X&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1">Subscriber&#146;s Signature</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Authorized Signature</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">(Custodian/Trustee/Officer/Partner)</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Date</FONT></TD></TR></TABLE> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="19%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="14%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="16%"></TD></TR>
<TR>
<TD VALIGN="top" ROWSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>4.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Selling&nbsp;Dealer Information</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">This subscription has been solicited by a:</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT> FINRA Licensed Registered Representative</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT> Registered Investment Advisor</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">The registered representative/registered investment advisor who solicited your subscription must sign below and by doing so represents that both he or she and/or the
Selling Dealer/Registered Investment Advisory Firm:</FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is, in the case of a registered representative, duly licensed by and in good
standing with FINRA or, in the case of a registered investment advisor, is a duly registered investment advisor under the Investment Advisers Act of 1940, and may lawfully offer the Shares in this offering in the State(s) listed in Section
2(a).</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has reasonable grounds to believe, based on information obtained from you
concerning your investment objectives, other investments, financial situation and needs, and any other matters, that you (i) meet the minimum income and net worth standards established for the Fund; (ii) can reasonably benefit from the Fund based on
your overall investment objectives and portfolio structure; (iii) are able to bear the economic risk of the investment based on your overall financial situation; and (iv) have apparent understanding of: (1) the fundamental risk of the investment;
(2) the risk that the subscriber may lose the entire investment; (3) the lack of liquidity of the shares; (4) the restrictions on transferability of the shares; (5) the background and qualifications of our manager; and (6) the tax consequences of
the investment.</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;informed you of the risk of ownership and limited liquidity of the Shares and
has delivered a current copy of our Prospectus to you.</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-left:2.00em; text-indent:-2.00em"><FONT STYLE="font-family:Times New Roman" SIZE="1">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;complied in all material respects with the terms of the Selling Dealer
Agreement.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT><B> FINRA Licensed Registered Representatives ONLY</B>: Tick here if selling commissions are
waived.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(a) &nbsp;&nbsp;&nbsp;&nbsp;Selling Dealer</B></FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="7" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Telephone&nbsp;No.)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(b)&nbsp;&nbsp;&nbsp;&nbsp;Registered&nbsp;Representative</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="7" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Name)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Rep. No.)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Telephone&nbsp;No.)</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Street Address)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(City and State)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Zip Code)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(c) &nbsp;&nbsp;&nbsp;&nbsp;Signature</B></FONT></TD></TR>
<TR>
<TD HEIGHT="5"></TD>
<TD HEIGHT="5" COLSPAN="2"></TD>
<TD HEIGHT="5" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>&nbsp;</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Print Name)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1">(Authorized&nbsp;Signature&nbsp;&#150;Branch&nbsp;Manager&nbsp;or&nbsp;Registered&nbsp;
Principal)</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P>

 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">D-2
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="1%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="19%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="15%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="3%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="19%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="18%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="18%"></TD></TR>

<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>10.</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ROWSPAN="2"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Subscription Checks,&nbsp;Mailing Instructions&nbsp;and Confirmations</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">Unless the subscriber is an IRA or Qualified Plan, mail your completed subscription package to:</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="5" VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="5"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Macquarie Equipment Leasing Fund Two, LLC</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="1">c/o ACS Securities Services, Inc.</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">3988 N. Central Expressway</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Building 5, 6th Floor</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Dallas, TX
75204</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">If the subscriber is an IRA or Qualified Plan, mail all the subscription documents to the designated custodian of the account.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1">Your subscription package should contain:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD>
<TD HEIGHT="8" COLSPAN="6"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Completed Additional Investment Subscription Agreement (required)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD COLSPAN="5" VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="8"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="7"><FONT STYLE="font-family:Times New Roman" SIZE="1"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT>&nbsp;&nbsp;Check or wire made payable as specified below (required)</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD COLSPAN="3" VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Checks should be made payable to &#147;Macquarie Equipment Leasing Fund Two, LLC,.&#148; unless your Selling Dealer
informs you that the minimum offering escrow is in effect, in which case the checks should be payable to &#147;Wells Fargo Bank as Escrow Agent for Macquarie Equipment Leasing Fund Two, LLC.&#148;</FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="1">Wiring instructions are available upon request.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="12"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="11"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>For any questions, please call (888) 299 8699.</B></FONT></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="15"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="15"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Office Use Only</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Admit&nbsp;Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Account Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Amount:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Number&nbsp;of&nbsp;Shares:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Account&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Wire&nbsp;/Check&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Blue Sky State:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Registered&nbsp;Rep.&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="4"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Firm Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Custodian&nbsp;ID&nbsp;Number:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1">&nbsp;</FONT></P></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD>
<TD HEIGHT="8" COLSPAN="10"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="1">Transfer&nbsp;Agent&nbsp;Reviewer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="9"> <P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD HEIGHT="8" COLSPAN="15"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="15"> <P STYLE="line-height:2px;margin-top:0px;margin-bottom:2px;border-bottom:2pt solid #000000">&nbsp;</P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">D-3
</FONT></P>


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<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B><A NAME="toc147678_66"></A>APPENDIX E </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>MACQUARIE EQUIPMENT LEASING FUND TWO, LLC </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>DISTRIBUTION REINVESTMENT PLAN </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Macquarie Equipment Leasing Fund Two,
LLC Distribution Reinvestment Plan (the &#147;DRP&#148;) provides eligible members with the opportunity to reinvest cash distributions payable to them in additional shares of membership interest in Macquarie Equipment Leasing Fund Two, LLC (the
&#147;Fund&#148;). The terms and conditions of the DRP are set forth below. Capitalized terms not defined herein shall have the meaning ascribed to them in the Fund&#146;s Limited Liability Company Operating Agreement. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. <I><U>Effectiveness and Eligibility</U>.</I> The DRP shall become effective upon the receipt of the Minimum Offering by the Fund.
Investors who have subscribed for a minimum of 500 Shares in the Offering and who are admitted to the Fund (&#147;Eligible Members&#148;) shall be eligible to participate in the DRP upon completion of the enrollment form in Section&nbsp;4 on page
C-9 of the Subscription Agreement. Such investors are referred to herein as &#147;Participants.&#148; The Manager has the right to prohibit qualified plan investors from participating in the DRP if such participation would cause the Fund&#146;s
assets to constitute &#147;plan assets&#148; under ERISA. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. <I><U>DRP Shares</U></I>. The maximum number of Shares that may
be issued under the DRP is 1,555,556. Shares purchased under the DRP will be sold for $9.00 per Share. The Fund will not pay Selling Commissions or the Dealer Manager Fee with respect to the DRP Shares. There is no minimum purchase required under
the DRP, and the Fund may issue fractional Shares in its discretion. The Shares issuable under the DRP shall be uncertificated unless and until the Manager determines otherwise. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. <I><U>Enrollment</U>.</I> An Eligible Member may elect to become a Participant at any time by completing and executing the enrollment
form in Section&nbsp;4 on page C-9 of the Subscription Agreement or any other form provided by the Manager or Dealer Manager. In addition, eligible members of Macquarie Equipment Leasing Fund, LLC (&#147;Other Fund Investors&#148;) who elect to
invest all, but not less than all, distributions they receive from that funds in our Shares pursuant to the DRP and who invested at least $5,000 in such other fund may participate in the DRP until the earlier of the termination of our offering or
the sale of all Shares available for purchase under our DRP, at which time, no new Other Fund Investors shall be allowed to participate in the DRP. The Manager has the right to prohibit qualified plan investors from participating in the DRP if such
participation would cause the Partnership&#146;s assets to constitute &#147;plan assets.&#148; In addition to the foregoing eligibility requirements, potential Participants must also be eligible to participate in the DRP pursuant to applicable State
suitability requirements. Participation in the DRP will begin with the next Cash Distribution payable after receipt of a Participant&#146;s enrollment form. Shares will be purchased under the DRP within 30 days of the date that the Fund makes a
distribution, to the extent that Shares are available for purchase under the DRP. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. <I><U>Distribution Reinvestment</U>.</I>
The Fund will apply all or a portion of the Cash Distributions paid in respect of a Participant&#146;s Shares, as directed by the Participant in Section&nbsp;4 on page C-9 of the Subscription Agreement, to the purchase of additional Shares for such
Participant, to the extent that Shares remain available for purchase under the DRP. Such Shares will be sold through the Selling Dealer or Dealer Manager from whom the Participant purchased Shares in the Offering. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5. <I><U>Withdrawal</U>.</I> A Participant may withdraw at any time by providing written notice to Macquarie Asset Management Inc.,
Investor Relations, 225 Franklin St, 17th Floor, Suite 1700 Boston MA 02110. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">6. <I><U>Transfer</U></I>. Shares purchased
through the DRP will be subject to the same transfer restrictions as all other Shares issued by the Fund. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. <I><U>Amendment
of the DRP</U>.</I> The Manager may amend the DRP for any reason; provided, however, that any amendment that adversely affects the rights or obligations of a Participant, as determined in the sole discretion of
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">E-1
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
the Manager, shall only take effect upon 10 days&#146; written notice to the Participants. No notice shall be given to Participants regarding any amendments to the DRP that are intended to cure,
correct or rectify any ambiguities, defective or inconsistent provisions, errors, mistakes or omissions. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">8. <I><U>Termination
of the DRP</U>.</I> Unless earlier terminated in the Manager&#146;s sole discretion, the DRP shall terminate upon the earlier of the termination of the Offering Period and the issuance of 1,555,556 Shares under the DRP. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">9. <I><U>Taxation of Distributions</U>.</I> The investment of Cash Distributions in the DRP does not relieve Participants of any taxes
that may be payable as a result of those Cash Distributions. Participants are urged to consult their personal tax advisor with regard to the tax consequences of participating in the DRP. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">10. <I><U>Voting of DRP Shares</U>.</I> Participants shall be entitled to vote all Shares acquired by a Participant under the DRP.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">11. <I><U>Interpretation</U></I>. Any issues of interpretation arising in connection with the DRP or its application shall be
conclusively determined by the Manager. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">12. <I><U>Liability of the Manager</U>.</I> The Manager shall not be liable for any
act done in good faith, or for any good faith omission to act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">13. <I><U>Governing Law</U></I>. The DRP shall be governed by
and shall be construed in accordance with the laws of the State of Delaware, excluding any conflict of laws rule or principle that might refer the governance or the construction of the DRP to the law of another jurisdiction. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">E-2
</FONT></P>


<p Style='page-break-before:always'>
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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">No person is authorized to give any information or make any representation that is not contained in this
prospectus. You must not rely on any unauthorized representations or information. This prospectus is an offer to sell only the shares of limited liability company interest offered by this prospectus, and only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this prospectus is current only as of its date. </FONT></P>
 <P STYLE="margin-top:60px;margin-bottom:0px" ALIGN="center">

<IMG SRC="g147678g76e41.jpg" ALT="LOGO"> </P>
 <P STYLE="margin-top:60px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="6"><B>Macquarie Equipment Leasing Fund Two, LLC </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>Up to 21,555,556 Limited Liability Company Shares </B></FONT></P> <P STYLE="margin-top:120px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="5"><B>MACQUARIE CAPITAL (USA) INC. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>Dealer Manager </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>125 West 55th Street, 22nd Floor </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="4"><B>New York, New York 10019 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>(866-965-7622) </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>(www.macquarie.com/mami) </B></FONT></P>
<P STYLE="margin-top:60px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">No one has been authorized to give any information or make any representations other than those contained in this prospectus in connection with this
offering. If given or made, you should not rely on such information or representations as having been authorized by our manager. The delivery of this prospectus does not imply that its information is correct as of any time after its date. This
prospectus is not an offer to sell these securities in any state to any person where the offer and sale is not permitted. Until
[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers&#146; obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments of subscriptions. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>PART II </B></FONT></P> <P STYLE="margin-top:4px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>INFORMATION NOT REQUIRED IN PROSPECTUS </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ITEM 13. Other Expenses of Issuance and
Distribution. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Assuming the offer and sale of the maximum offering of shares, estimated expenses in connection with the
issuance and distribution of the shares, other than the dealer manager fee, selling commissions and the O&amp;O allowance, in the aggregate, are as follows: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="90%"></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD></TD>
<TD></TD>
<TD></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Registration fee</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Printing and engraving costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Legal fees and expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Accounting fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Blue Sky fees and expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">FINRA fees and expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Travel, and accommodation expenses</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Broker-Dealer due diligence reimbursements</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Advertising and Investor sales literature production costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Transfer Agent and Escrow Agent fees</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Banking and Organization costs</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:1px solid #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Total</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">$</FONT></TD>
<TD VALIGN="bottom" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD NOWRAP VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">]&nbsp;</FONT></TD></TR>
<TR STYLE="font-size:1px">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD VALIGN="bottom" STYLE="border-top:3px double #000000">&nbsp;</TD>
<TD>&nbsp;</TD></TR></TABLE> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ITEM 14. Indemnification of Directors and Officers. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Section&nbsp;107 of the Delaware Limited Liability Company Act empowers us to indemnify and hold harmless any member or manager or other
persons from and against all claims and demands whatsoever. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Under the Registrant&#146;s operating agreement, the Registrant
will indemnify the manager, its directors and officers and its affiliates other than the dealer manager out of its assets for any liability, loss, cost and expense suffered by it arising out of the acts or omissions of the manager or its affiliates
provided that: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the manager or its affiliate made a determination in good faith that the action or inaction was in the Registrant&#146;s best interests;
</FONT></P></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the manager or its affiliate was acting on behalf of or performing services for the Registrant; and </FONT></P></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the course of conduct did not constitute negligence or misconduct on the manager&#146;s part or that of its affiliate. </FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">In the opinion of the SEC, indemnifying an entity for liabilities arising under the Securities Act of 1933, as amended, is contrary to public policy and
therefore unenforceable. If the manager asserts a claim against the Registrant for indemnification for those liabilities, other than for expenses incurred in a successful defense, under the Registrant&#146;s operating agreement or otherwise, the
Registrant will submit to a court of competent jurisdiction the question of whether the indemnification is against public policy as expressed in the Securities Act. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">In addition, the Registrant is not permitted to indemnify the manager or any of its affiliates, including the dealer manager, for any liability imposed by judgment, and costs associated therewith,
including attorneys&#146; fees arising out of a violation of federal or state securities laws associated with the offer and sale of shares. The Registrant may indemnify the manager and any of its affiliates for any settlements and related expenses
of lawsuits alleging federal or state securities laws violations and for expenses incurred in successfully defending those lawsuits if the following have occurred: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">a court approves the settlement and finds that indemnification of the settlement and related costs should be made or a court approves indemnification
of litigation costs if a successful defense is made; and </FONT></P></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">II-1
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD WIDTH="1%" VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">the manager or its affiliate seeking indemnification has advised the court regarding the current position of the SEC and any applicable state
securities&#146; administrator on the issue of indemnification for securities laws violations. </FONT></P></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Registrant will not have
to pay the cost of insurance that insures the manager or any affiliate for any liability for which the manager cannot be indemnified. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ITEM
15. Recent Sales of Unregistered Securities. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Registrant has recently been formed but has not issued any securities
other than the manager&#146;s interest in the Registrant, for a capital contribution of $2,000. This sale occurred on January [&nbsp;&nbsp;&nbsp;&nbsp;], 2011 in reliance upon the exemption from registration contained in Section&nbsp;4(2) of the
Securities Act of 1933, as amended. This sale was for the purpose of organizing the Registrant as a limited liability company and for investment purposes and not with a view to the distribution of such securities. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ITEM&nbsp;16. Exhibits and Financial Statement Schedules. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) Exhibits. </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD WIDTH="90%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:28pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit<BR>Number</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="border-bottom:1px solid #000000;width:25pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;1.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form of Dealer Manager Agreement</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;1.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form of Selling Dealer Agreement</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;1.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Certificate of Formation</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;3.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Limited Liability Company Operating Agreement (incorporated by reference to Appendix A to prospectus)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;5.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Opinion regarding legality*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;8.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Opinion regarding tax matters*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.1.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of PricewaterhouseCoopers LLP &#150; Macquarie Equipment Leasing Fund Two, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.2.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of PricewaterhouseCoopers LLP &#150; Macquarie Asset Management Inc.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of Baker, Donelson, Bearman, Caldwell &amp; Berkowitz, a Professional Corporation (included in Exhibit 5.1 to this Registration Statement)*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.4</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of Baker, Donelson, Bearman, Caldwell &amp; Berkowitz, a Professional Corporation (included in Exhibit 8.1 to this Registration Statement)*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">24.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Powers of Attorney are set forth in Part II of the Registration Statement on Form S-1</FONT></TD></TR></TABLE>
<P STYLE="line-height:8px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">To be filed by Amendment </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b)
<I>Financial Statements included in the prospectus</I>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Equipment Leasing Fund Two, LLC </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">See Index to Financial Statements at page F-1 of the prospectus included in Part I of this Registration Statement </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">See Index to Financial Statements at page F-1 of the prospectus included in Part I of this Registration Statement </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">II-2
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ITEM&nbsp;17. Undertakings. </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) The undersigned registrant hereby undertakes: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(1) To file,
during any period in which offers or sales are being made, a post-effective amendment to this registration statement: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or its most recent post-effective amendment) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the &#147;Calculation of Registration Fee&#148; table in the effective registration statement; and </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iii) To include any material information with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the registration statement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(2) That, for
the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial <I>bona fide</I> offering thereof. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(3) To remove from registration by
means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C (&#167; 230.430C of this chapter), each prospectus filed
pursuant to Rule&nbsp;424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (&#167; 230.430A of this chapter), shall be
deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. <I>Provided, however</I>, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) Any free writing prospectus relating
to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">II-3
</FONT></P>


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<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) The undersigned registrant further undertakes to file a sticker
supplement pursuant to Rule 424(c) under the Securities Act of 1933 describing each finance or lease transaction not described in the prospectus or a prior supplement to the registration statement promptly after there arises a reasonable probability
that such transaction will be acquired if the transaction would require a commitment by the registrant of an amount of offering proceeds in excess of 10 percent of the offering proceeds received as of that date by the registrant. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements
certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(e) The registrant undertakes to send to each member at least on an annual basis a detailed statement of any transactions with the manager or its affiliates, and of fees, commissions, compensation and
other benefits paid, or accrued to the manager or its affiliates for the fiscal year completed, showing the amount paid or accrued to each recipient and the services performed. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f) The registrant undertakes to provide to the members the financial statements required by Form 10-K for the first full fiscal year of
operations of the registrant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(g) The registrant undertakes to file a sticker supplement pursuant to Rule 424(c) under the
Securities Act during the distribution period describing each lease transaction not identified in the prospectus at such time as there arises a reasonable probability that such property will be acquired and to consolidate all such stickers into a
post-effective amendment filed at least once every three months, with the information contained in such amendment provided simultaneously to the existing members. Each sticker supplement should disclose all compensation and fees received by the
Manager and its affiliates in connection with any such acquisition. The post-effective amendment shall include audited financial statements meeting the requirements of Rule 3-14 of Regulation S-X only for properties acquired during the distribution
period. The registrant also undertakes to file, after the end of the distribution period, a current report on Form 8-K containing the financial statements and any additional information required by Rule 3-14 of the Regulation S-X, to reflect each
commitment (i.e., the signing of a binding purchase agreement) made after the end of the distribution period involving the use of 10% or more (on a cumulative basis) of the net proceeds of the offering and to provide the information contained in
such report to the members at least once each quarter after the distribution period of the offering has ended. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) The
registrant undertakes to file, after the end of the offering period, a current report on Form 8-K containing the financial statements and any additional information required by Rule 3-14 of Regulation S-X, to reflect each commitment made after the
end of the offering period involving the use of 10% or more (on a cumulative basis) of the net proceeds of the offering and to provide the information contained in such report to the members at least once each quarter after the offering period has
ended. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">II-4
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TABLE VI </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>ACQUISITION OF PORTFOLIO INVESTMENTS BY PRIOR PROGRAMS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>September 30,
2010 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Unaudited) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The following is a summary of investments made by Macquarie Equipment Leasing Fund, LLC (&#147;Fund One&#148;) as at September&nbsp;30, 2010. As at that date, Fund One had not completed its offering or
entered its operating phase: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="31%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:40pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Client Type</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Equipment Type</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Location</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Date<BR>Purchased</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Total<BR>Financing</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Cash<BR>Expensed</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Other<BR>Capitalized<BR>Costs</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Total<BR>Acquisition<BR>Cost</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commercial airline</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commercial&nbsp;Jet<BR>Aircraft&nbsp;Engines</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Australia</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">March&nbsp;24,<BR>2010</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$195,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$6,500,000</FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Investors in the
Fund should not expect results comparable to those of Fund One. Prior performance is not indicative of future performance. </B></FONT></P>
<P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>TABLE VI </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ACQUISITION OF PORTFOLIO INVESTMENTS BY PRIOR PROGRAMS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>December 31, 2010 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>(Audited) </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The following is a summary of investments made by Macquarie Equipment Leasing Fund, LLC (&#147;Fund One&#148;) as at December&nbsp;31,
2010. As at that date, Fund One had not completed its offering or entered its operating phase: </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="33%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:40pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Client Type</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Equipment Type</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Location</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Date<BR>Purchased</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Total<BR>Financing</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Cash<BR>Expensed</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Other<BR>Capitalized<BR>Costs</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Total<BR>Acquisition<BR>Cost</B></FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commercial airline</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Commercial<BR>Jet Aircraft<BR>Engines</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Australia</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">March<BR>2010</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$195,000</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$6,500,000</FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Retailer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Customer<BR>Self-Serve<BR>Kiosks</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">United&nbsp;States</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">October<BR>2010</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$61,088</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$2,097,353</FONT></TD></TR>
<TR BGCOLOR="#cceeff">
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Senior housing provider</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">Furniture and<BR>Miscellaneous</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">United States</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">November<BR>2010</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$0</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$6,764</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$20,293</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">$703,480</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">II-5
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%;padding-bottom:0px;"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, State of Massachusetts, on the 17</FONT><FONT STYLE="font-family:Times New Roman" SIZE="1"><SUP
STYLE="vertical-align:baseline; position:relative; bottom:.8ex">th</SUP></FONT><FONT STYLE="font-family:Times New Roman" SIZE="2"> day of March, 2011. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="7%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Equipment Leasing Fund Two, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">Macquarie Asset Management Inc.</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT STYLE="font-family:Times New Roman" SIZE="2">Its Manager</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ David Fahy</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">David Fahy</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">President</FONT></P></TD></TR></TABLE>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="40%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="38%"></TD>
<TD VALIGN="bottom" WIDTH="2%"></TD>
<TD WIDTH="18%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:33pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Signature</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:30pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Capacity</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" NOWRAP ALIGN="center"> <P STYLE="border-bottom:1px solid #000000;width:16pt" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Date</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ David Fahy</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">David Fahy</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Director and President</FONT></P>
<P STYLE="margin-top:0px;margin-bottom:1px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Principal Executive Officer</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">March 17, 2011</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Duncan Edghill</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Duncan Edghill</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Director and Vice President</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">March 17, 2011</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Frank V. Saracino</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Frank V. Saracino</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Principal Financial Officer, Principal Accounting Officer</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">March 17, 2011</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px;border-bottom:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ James A. Pitts</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">James A. Pitts</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Independent Director</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top" NOWRAP ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">March 17, 2011</FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">II-6
</FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
<h5 align="left"><a href="#toc">Table of Contents</a></h5>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>INDEX TO EXHIBITS </B></FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD WIDTH="90%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000;width:28pt"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Number</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="border-bottom:1px solid #000000;width:25pt"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>Exhibit</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;1.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form of Dealer Manager Agreement</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;1.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form of Selling Dealer Agreement</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;1.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Certificate of Formation</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;3.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Limited Liability Company Operating Agreement (incorporated by reference to Appendix A to prospectus)</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;5.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Opinion regarding legality*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;8.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Opinion regarding tax matters*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">10.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Form of Escrow Agreement</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.1.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of PricewaterhouseCoopers LLP &#150; Macquarie Equipment Leasing Fund Two, LLC</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.2.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of PricewaterhouseCoopers LLP &#150; Macquarie Asset Management Inc.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of Baker, Donelson, Bearman, Caldwell &amp; Berkowitz, a Professional Corporation (included in Exhibit 5.1 to this Registration Statement)*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">23.4</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Consent of Baker, Donelson, Bearman, Caldwell &amp; Berkowitz, a Professional Corporation (included in Exhibit 8.1 to this Registration Statement)*</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">24.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Powers of Attorney are set forth in Part II of the Registration Statement on Form S-1</FONT></TD></TR></TABLE>
<P STYLE="line-height:8px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000;width:10%">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2">*</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">To be filed by Amendment </FONT></TD></TR></TABLE>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">II-7
</FONT></P>

</BODY></HTML>
[{"type": "S-1", "sequence": "1", "filename": "ds1.htm", "description": "FORM S-1", "secsgml_size_bytes": 1996810}]
{"company-data": {"conformed-name": "Macquarie Equipment Leasing Fund Two, LLC", "cik": "0001515708", "irs-number": "274650348", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-172898", "film-number": "11694679"}, "business-address": {"street1": "225 FRANKLIN STREET, 17TH FLOOR, SUITE 1", "city": "BOSTON", "state": "MA", "zip": "02110", "phone": "6174570645"}, "mail-address": {"street1": "225 FRANKLIN STREET, 17TH FLOOR, SUITE 1", "city": "BOSTON", "state": "MA", "zip": "02110"}}
Form S-1
Table of Contents
As filed with the Securities and Exchange Commission on March 17, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-1
Registration Statement
Under
The Securities Act of 1933
Macquarie Equipment Leasing Fund Two, LLC
(Exact name of registrant as specified in its charter)
Delaware
7359
27-4650348
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial Classification Code Number)
(IRS Employer
Identification Number)
225 Franklin
Street, 17th Floor, Suite 1700
Boston, Massachusetts 02110
(617) 457-0645
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
David Fahy
President
Macquarie Asset Management, Inc.
225 Franklin Street, 17th Floor, Suite 1700
Boston, Massachusetts 02110
(617) 457-0645
(Name, address, including zip code, and telephone number, including area code, of agent for service)
With Copies
to:
Matthew S. Heiter
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
165 Madison
Avenue, Suite 2000
Memphis, Tennessee 38103
(901) 577-8117
Robert G. Reedy
Porter Hedges LLP
1000 Main Street, 36
th
Floor
Houston, Texas 77002
(713) 226-6674
Approximate
date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following
box.
þ
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
¨
If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting
company
þ
Calculation of Registration Fee
Title of
each class of
securities to
be registered
Amount
to be
registered
Proposed
maximum
offering
price per share
Proposed
maximum
aggregate
offering price
Amount of
registration
fee
Shares of Limited Liability Company Interest
20,000,000
$
10.00
$
200,000,000
$23,220.00
Shares of Limited Liability Company Interest (1)
1,555,556
$
9.00
$
14,000,004
$1,625.40
Total
21,555,556
N/A
$
214,000,004
$24,845.40
(1)
Represents shares that may be sold pursuant to the registrant's Distribution Reinvestment Plan.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant files a further amendment which specifically states that this Registration Statement will thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement becomes
effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Table of Contents
The information in
this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any State where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED
                    , 2011
Macquarie Equipment Leasing Fund Two, LLC
A Minimum of 120,000 and a Maximum of 21,555,556 Limited Liability Company Shares
We are an equipment leasing program that will acquire a diversified portfolio of equipment, equipment leases and other equipment related
investments. The majority of our equipment will be leased to corporate clients. We will generate income through the collection of lease rentals and other revenues and through the sale of leased equipment and other portfolio investments. We
anticipate approximately 88.0% of the proceeds from this offering will be available to purchase our portfolio, to create capital reserves of 1.0% of our initial capital and to pay acquisition fees, after deducting total public offering and
organization expenses. In no event will our organization and offering expenses exceed 15% of our gross offering proceeds. Macquarie Asset Management Inc. is our manager. Our manager is a member of the Macquarie Group, a diversified international
provider of banking, financial, leasing, advisory and investment services.
A purchase of shares involves high risks. You
should purchase these securities only if you can afford a complete loss of your investment. See "
Risk Factors
" beginning on page 18. Risk Factors include:
•
All or a substantial portion of distributions you receive from us may be a return of capital rather than a return on capital. Rates of distribution
will not necessarily be indicative of profitable returns of the program.
•
This is a "blind pool" offering. We have not identified any specific investments as of the date of this prospectus and therefore cannot
determine all of the potential risks associated with our portfolio at this time. Our manager's limited operating history decreases your ability to evaluate your investment.
•
If a client is in default under a lease with us, we may incur losses.
•
We may invest in equipment indirectly through non-lease transactions which expose us to additional risks not present when acquiring equipment that will
be wholly-owned by us directly.
•
Your shares are effectively illiquid and you may not be able to sell your shares. You should be prepared to hold your shares for the life of our fund,
which is anticipated to be approximately eight years but may be longer.
•
Uncertainties associated with the equipment leasing industry may have an adverse effect on our business and may adversely affect our ability to give
you any economic return from our shares or a complete return of your capital.
•
There are material income tax risks associated with this offering.
•
You will have limited voting rights. Our manager will make all of our management decisions.
•
Our manager will receive substantial fees from us.
•
Our use of debt financing means our losses may be greater than if debt financing were not used.
•
There are potential conflicts of interest between us and our manager and its affiliates.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities nor has
any state securities commission opined upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Investments in Macquarie Equipment Leasing Fund Two, LLC are not deposits with or other liabilities of Macquarie Bank Limited ABN 46 008 583 542, or of any entity in the Macquarie Group and are subject
to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie Bank Limited nor any other member company of the Macquarie Group guarantees any particular rate of return or the performance of the
Macquarie Equipment Leasing Fund Two, LLC nor do they guarantee the repayment of capital from Macquarie Equipment Leasing Fund Two, LLC.
The use of forecasts in this offering is prohibited. Any representations to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax
consequence which may flow from an investment in this program is not permitted.
Price to
Public
Selling
Commissions
Proceeds to
Fund
Before Expenses
Per Share
$
10.00
$
1.00
$
9.00
Total Minimum
$
1,200,000
$
120,000
$
1,080,000
Total Maximum
$
200,000,000
$
20,000,000
$
180,000,000
DRP per Share
$
9.00
$
N/A
$
9.00
Total DRP
$
14,000,004
$
N/A
$
14,000,004
We are offering a
total of 20,000,000 shares of limited liability company interest for a price of $10.00 per share, subject to certain reductions. An investor must purchase a minimum of 500 shares. We will deposit subscriptions in a bank escrow account at Wells Fargo
Bank and no shares will be sold unless a minimum of $1,200,000 in cash is received within one year from the start of the offering. If the minimum offering is not achieved, the escrow agent will send you a refund of your investment along with any
interest earned thereon and without deduction for escrow expenses. We are also offering up to 1,555,556 shares pursuant to our distribution reinvestment plan, or DRP, at a public offering price of $9.00 per share. The offering will be made by
unaffiliated broker dealers, or selling dealers, in a selling group managed by Macquarie Capital (USA) Inc., a broker dealer affiliated with our manager, acting as dealer manager. The offering is being made on a "best efforts" basis and
the selling dealers and dealer manager selling the shares are not required to sell any specific number of shares.
MACQUARIE
CAPITAL (USA) INC.–Dealer Manager
THE DATE OF THIS PROSPECTUS IS
                    , 2011
Table of Contents
TABLE OF CONTENTS
Page
WHO MAY INVEST
1
General Suitability Standards
1
Additional Information for Residents of Certain States
1
QUESTIONS AND ANSWERS ABOUT THIS OFFERING
4
QUESTIONS AND ANSWERS ABOUT OUR DISTRIBUTION REINVESTMENT PLAN
7
PROSPECTUS SUMMARY
9
ESTIMATED USE OF PROCEEDS
16
RISK FACTORS
18
Risks Associated With This Offering
18
Risks Associated With Our Equipment Leasing Activities
21
Risks Associated With Our Equipment Trading and Other Activities
25
Risks Associated With Our General Business Operations
26
Risks Associated With the Tax Treatment of Us and Our Shares
29
MANAGEMENT COMPENSATION
33
Offering Compensation
33
Operating Compensation
35
INVESTMENT OBJECTIVES AND POLICIES
40
Principal Investment Objectives
40
Equipment Considerations
41
Types of Transactions and Transaction Strategies
43
Lease Provisions
47
Types of Clients and Client Considerations
47
Borrowing Strategies and Limitations
48
Warehousing of Transactions by our Manager or our Manager's Affiliates
48
Co-Investments
49
Transaction Review and Approvals
49
Portfolio Review
50
ALTERNATIVE INVESTMENT STRATEGIES
51
THE EQUIPMENT LEASING INDUSTRY
52
MANAGER'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
54
FIDUCIARY DUTIES AND CONFLICTS OF INTEREST
55
Potential Conflicts of Interest
55
Managing Conflicts of Interest
58
THE MACQUARIE GROUP
62
The Macquarie Group's Leasing Expertise
62
The Macquarie Group's Leasing Team
63
MANAGEMENT
65
Organizational Diagram
66
Our Board of Directors and Investment Committee
66
Transaction Sources
68
CAPITALIZATION
69
INCOME, LOSSES, DISTRIBUTIONS AND DISTRIBUTIONS POLICY
70
FEDERAL INCOME TAX CONSEQUENCES
73
Opinion of Counsel
73
Classification as a Partnership
74
Allocations of Profits and Losses
76
Taxation of Investors
77
Limitation on Deduction of Losses
79
Need for Independent Advice
91
Table of Contents
Page
ERISA CONSIDERATIONS
91
SUMMARY OF OUR OPERATING AGREEMENT
94
REDEMPTION OF SHARES
103
PLAN OF DISTRIBUTION
104
General
104
Compensation of the Dealer Manager and Selling Dealers
104
Termination of Dealer Manager and Selling Dealer Agreements
106
Indemnification of Dealer Manager and Selling Dealers
107
Distribution Reinvestment Plan
107
Subscription Process and Escrow Agreement
107
Automatic Investment Program
108
Shares by Assignment
109
SUPPLEMENTAL SALES MATERIAL
110
LEGAL OPINIONS
110
EXPERTS
110
FORWARD-LOOKING STATEMENTS
111
WHERE YOU CAN FIND MORE INFORMATION
112
GLOSSARY
113
FINANCIAL STATEMENTS
F-1
APPENDIX A LIMITED LIABILITY COMPANY OPERATING AGREEMENT
A-1
APPENDIX B PRIOR PERFORMANCE TABLES
B-1
APPENDIX C HOW TO INVEST
C-1
APPENDIX D ADDITIONAL INVESTMENT SUBSCRIPTION AGREEMENT
D-1
APPENDIX E DISTRIBUTION REINVESTMENT PLAN
E-1
Table of Contents
In this prospectus, "we," "us," "our," "company"
and "fund" refer to Macquarie Equipment Leasing Fund Two, LLC. References to "our manager" refer to Macquarie Asset Management Inc.
WHO MAY INVEST
General Suitability
Standards
An investment in our shares is only appropriate for investors who meet the suitability standards set forth
below. We are requiring that investors meet these standards due to the long-term nature of, and lack of liquidity in, an investment in us.
Unless you reside in a state for which more stringent suitability standards are required, you must meet our basic suitability requirements in order to purchase our shares, being either:
•
a minimum gross income of $70,000 and a minimum net worth of $70,000, calculated exclusive of your home, home furnishings and automobiles; or
•
a minimum net worth of $250,000, calculated exclusive of your home, home furnishings and automobiles.
In addition, you must be either a U.S. citizen with a resident address in the U.S. (individuals only) or a U.S. resident alien with a
resident address in the U.S. in order to purchase our shares. If you are an individual and you become a "foreign partner" for purposes of Section 1446 of the Internal Revenue Code of 1986, or the Code, as amended, at any time during
the life of our fund, we have the right but not the obligation to repurchase all of your shares pursuant to the terms of our operating agreement. See "Summary of Our Operating Agreement."
When evaluating your suitability for this investment using the standards listed above and below, keep in mind that net worth does not
include the value of your home furnishings, personal automobiles and the equity in your home. Also, you must value the assets included in your net worth calculation at their fair market value. For fiduciary accounts, such as IRAs and HR-10, or Keogh
plans, and other benefit plans or trusts, these suitability standards must be met by the beneficiary, the IRA, plan or trust or the donor or grantor who directly or indirectly supplies the funds to purchase the units, if that donor or grantor is the
fiduciary of the IRA, plan or trust. Our manager will maintain your suitability records for a period of six years.
It is the
responsibility of our manager, the dealer manager and each person selling our shares on behalf of our manager or dealer manager to make every reasonable effort to determine that the purchase of our shares is a suitable and appropriate investment for
subscribers. We and the selling dealers will rely on what you tell us in your subscription agreement about your financial situation and investment objectives, and the selling dealers must maintain documents in their files disclosing the basis on
which they made the suitability determination of an investment in us by the investors to whom they sold our shares. Thus, it is important that you provide complete and accurate information on your subscription agreement. See "Plan of
Distribution."
Additional Information for Residents of Certain States
Residents of certain states are required to meet suitability standards that differ or are in addition to the general suitability standards
stated above. In addition, we are required to make certain disclosures regarding an investment in the shares and their transferability. If you are a resident of one of the following states, the differing suitability standards and/or disclosures
apply to you. Any additional requirements imposed by a state after the date of this prospectus will be disclosed in a supplement to this prospectus. You are urged to review any supplement to this prospectus to determine whether more restrictive
standards apply to your investment.
•
Alabama Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and similar equipment
leasing programs may not exceed 10% of your liquid net worth.
1
Table of Contents
•
California Investors.
The offering is limited to suitable investors only. You must have either (1) a liquid net worth of not less than
$100,000 and a gross annual income of not less than $75,000, or (2) a liquid net worth of $250,000, in both instances exclusive of your home, home furnishings and automobiles. In addition, your investment in us may not exceed 10% of your net
worth.
•
Iowa Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates may not
exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles.
•
Kansas Investors.
Under suitability guidelines of the Office of the Kansas Securities Commissioner, you are cautioned to carefully evaluate
whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash
equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early
distribution.
•
Kentucky Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth.
•
Michigan Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliated
programs may not exceed 10% of your liquid net worth.
•
Missouri Investors.
You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of
your net worth, calculated exclusive of home, home furnishings and automobiles.
•
Ohio Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and in affiliated programs
may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles.
•
Oklahoma Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth, calculated exclusive of your home, home furnishings and automobiles.
•
Oregon Investors.
You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of your
net worth, calculated exclusive of home, home furnishings and automobiles.
•
Pennsylvania Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates
may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. Because the minimum offering amount is less than $20,000,000, which represents 10% of the maximum offering amount, you are cautioned to
carefully evaluate the program's ability to fully accomplish its stated objectives and to inquire as to the current dollar volume of program subscriptions. In addition, subscription proceeds of Pennsylvania investors will be held in an escrow
account until we receive and accept subscriptions for at least $10,000,000 in offering proceeds. We must offer you the opportunity to rescind your subscription if we have not received subscriptions for $10,000,000 within 120 days of the date the
escrow agent receives your subscription proceeds. We must repeat this offer to you every 120 days during the offering period until we have received and accepted subscriptions for $10,000,000.
•
Tennessee Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us must not exceed ten
percent (10%) of your liquid net worth.
•
Vermont Investors
. You must meet the general suitability standards set forth above. In addition, your maximum investment in us and our
affiliates may not exceed 10% of your net worth.
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Who May Invest
You should purchase our shares only if you:
•
meet the minimum income, net worth standards and other basic suitability requirements established for us specified above;
•
can reasonably benefit from us based on your overall investment objectives and portfolio structure;
•
are able to bear the economic risk of the investment based on your overall financial situation; and
•
have understanding of:
•
the fundamental risks of the investment;
•
the risk that the subscriber may lose the entire investment;
•
the lack of liquidity of the shares;
•
the restrictions on transferability of the shares;
•
the background and qualifications of our manager; and
•
the tax consequences of the investment;
•
have had our final prospectus for at least five business days,
and if you believe an investment in us is otherwise suitable for you.
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QUESTIONS AND ANSWERS ABOUT THIS OFFERING
Q1. What is Macquarie Equipment Leasing Fund Two, LLC and what does it do?
A.    We are an investment vehicle that will make investments in equipment and equipment leases. We may also make investments in other equipment related transactions which will allow
us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. Those transactions may include equipment trading transactions, residual value guarantees, forward purchase agreements, investments in companies which
lease equipment, total lease return swaps, participation agreements, equipment purchase options and other transactions involving equipment. We will not enter into stock, bond or other exchange traded derivative contracts. See "Investment
Objectives and Policies–Types of Transactions and Transaction Strategies."
We are commonly referred to as an
"equipment leasing fund" or "equipment leasing program." Equipment leasing funds are often considered to be an alternative asset class, being non-correlated to traditional assets like stocks and bonds. Investments into
alternative assets may provide diversification benefits for investors.
When you purchase shares of membership or limited
liability company interests in Macquarie Equipment Leasing Fund Two, LLC, the capital you invest is pooled with the capital contributions of other investors. Those capital contributions are combined with borrowings and, after payment of fees and
expenses, invested in equipment, equipment leases and other equipment related transactions. The transactions in which we invest will be originated and managed by Macquarie Asset Management Inc., our manager.
We anticipate that the majority of our revenue will be derived from:
•
income received under lease agreements and other equipment related investments; and
•
the proceeds received from the sale of equipment that had been subject to a lease or other equipment related investment.
Q2. What are our investment objectives?
A.    Our principal investment objectives are to:
•
preserve, protect and return your invested capital;
•
generate regular monthly cash distributions;
•
reduce our overall risk through diversification of our portfolio;
•
generate investment returns that are not correlated to returns from investments in listed stock and bond markets; and
•
generate a favorable total return on your investment.
There is no assurance, however, that we will be able to meet our investment objectives. See "Investment Objectives and Policies."
Q3. What types of equipment and other transactions will be in our portfolio?
A.    Although the composition of our portfolio cannot be determined at this stage, we expect to invest in equipment classes which may
include rail equipment, such as freight cars or locomotives, maritime equipment, aviation equipment, such as commercial jet engines and aircraft, road transportation equipment, manufacturing equipment, mining and construction equipment,
technological and communications equipment, utilities equipment and/or other types of equipment that our manager determines may meet our investment objectives. We expect to invest in equipment located both within and outside the United States.
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The majority of our equipment investments will be accompanied by a corresponding lease with
a corporate client. Typically, a client will select an item of equipment it requires for its business operations. We will then purchase that equipment and simultaneously lease it to that client for a fixed period. At the end of the lease period, the
equipment is either returned to us, purchased by our client or is leased for a further period. To a lesser extent, we may purchase equipment for resale without a corresponding lease, or enter into other types of equipment related investments which
will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. Those transactions may include equipment trading transactions, residual value guarantees, forward purchase agreements, investments in
companies which lease equipment, total lease return swaps, participation agreements, equipment purchase options and other transactions involving equipment. We will not enter into stock, bond or other exchange traded derivative contracts. See
"Investment Objectives and Policies–Types of Transactions and Transaction Strategies."
When contemplating
investments in equipment, our manager may consider a range of factors including the remaining economic useful life of the equipment, the anticipated residual value of the equipment, whether the equipment is new or used and the condition of the
equipment, equipment registration and regulatory considerations, portfolio diversification, client considerations such as available financial information about the client and how essential the equipment is to the operations of the client, the cash
flow profile of the equipment and the depth of the equipment market and exit mechanisms. See "Investment Objectives and Policies—Equipment Investment Considerations."
Q4. Who is our manager, Macquarie Asset Management Inc.?
A.    Our
manager, Macquarie Asset Management Inc., is a member of the Macquarie Group Limited group of companies, which we refer to as the "Macquarie Group." The Macquarie Group is a diversified international provider of banking, financial,
leasing, advisory and investment services. As of September 30, 2010, the Macquarie Group operated in more than 70 offices in 28 countries and had approximately 15,500 employees, over 3,700 of whom were located across 28 offices in North America. As
of September 30, 2010, the Macquarie Group had assets under management of approximately $307 billion. The Macquarie Group manages assets which provide valuable services in markets around the world.
Our manager is operated by the Macquarie Group's equipment leasing group. As of September 30, 2010, the Macquarie Group's
leasing group had approximately $8.6 billion of equipment leases under management with over 700 employees located in North America, Europe, Asia and Australia / New Zealand across six different leasing business lines. These employees variously
specialize in all aspects of equipment leasing operations, from transaction origination to asset management and equipment remarketing. See "Management" and "Fiduciary Duties and Conflicts of Interest."
Q5. What happens after you invest and when can you expect to receive distributions?
A.    Once our manager has accepted your subscription, you will receive a confirmation letter indicating our acceptance of your investment. We will hold our initial closing and our
shares will be sold once a minimum of $1,200,000 in cash has been received within one year from the start of the offering. Generally, we intend to begin making monthly cash distributions in the month following the first full month after we have
received a total of $1,200,000 in cash subscriptions. We may, however, elect not to make distributions until subscription funds have been invested, which could take as long as two years. If we elect to make distributions before funds have been fully
invested, those distributions may be a return of uninvested capital rather than a return on capital.
We anticipate that our
operations will continue for approximately eight years. Our operations are divided into three phases:
•
Our "offering period" is anticipated to last up to two years from the date of this prospectus. We will raise money from investors during the
offering period. The more quickly we raise money, the greater the likelihood that we will raise the maximum amount in this offering and the greater the likelihood
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that the offering period will be shorter. After we have raised $1,200,000, we will begin investing the offering proceeds into equipment, equipment leases and other equipment related transactions.
Until offering proceeds are used for the acquisition or operation of our portfolio, the offering proceeds will be held in short-term, highly liquid investments which afford appropriate safety of principal.
•
Our "operating period" is anticipated to last five years from the end of the offering period, but may last longer. During this period we will
invest and re-invest in equipment, equipment leases and other equipment related transactions.
•
Our "liquidation period" is anticipated to last one year from the end of the operating period, but not more than 36 months from the end of
the operating period. During this period we will dispose of the remainder of our portfolio and make final distributions to our investors.
Cash distributions are expected to continue each month for the duration of the offering and operating periods. However, the amount and rate of cash distributions could vary and are not guaranteed.
Q6. Are there tax consequences and potential benefits of investing in us?
A.    We do not anticipate that we will pay federal income taxes. Instead, you will be taxed on your share of our net income.
All of our income or losses and other tax items will be passed through to you and our other members. Our manager anticipates that during
our early years, income taxes with respect to your distributive share of income may be tax-deferred by operating losses and depreciation deductions available from equipment leased to clients under operating leases. The total depreciation deductions
available will be reduced to the extent that our equipment is located outside the U.S. and to the extent that we hold indirect interests in equipment. The passive activity rules under the Code will apply to individuals and most likely to our other
members. Thus, you should anticipate that your share of our net income or net loss in each of our taxable years generally will be characterized as passive activity income or loss. Under the passive activity rules, you may deduct your passive
activity losses only against passive activity income, and not against active income or interest, dividends and other forms of portfolio income.
Employee benefit plans, such as qualified pension and profit sharing plans, Keogh plans and IRAs, are generally exempt from federal income tax, except that any net unrelated business taxable income, or
UBTI, that exceeds a specific deduction of $1,000 in any taxable year is subject to tax. Other charitable and tax-exempt organizations are also subject to tax on UBTI. Most of our net income, if any, in a given year will constitute UBTI, either
because the income is rental income from personal property or because we intend to use leverage to help build our portfolio. For a detailed discussion of the tax consequences of the offering, see "Federal Income Tax Consequences." You are
urged to seek advice based on your individual circumstances from an independent tax advisor with respect to the tax consequences to you of an investment in us.
Q7. Will you be able to sell your investment in our shares?
A.    An
investment in our shares is an illiquid investment and your ability to sell our shares will be extremely limited. You should only invest money that you can afford to have unavailable for at least eight years, net of distributions that are expected
to be made to you during those years. Our shares will not be listed on any national securities exchange at any time and we will take steps to ensure that no public trading market develops for our shares. Our operating agreement allows you to request
that we repurchase your investment in our shares from time to time, at a redemption price determined according to a pre-set formula. See "Redemption of Shares." You should assume that the proceeds from a repurchase or sale, consisting of
repurchase proceeds and distributions you received prior to repurchase, may be less than your original investment.
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Q8. Where can you find more information?
A.    We have filed a registration statement on Form S-1 with the SEC regarding the shares we are offering by this
prospectus and we will file periodic reports and other information with the SEC. These documents are available from the SEC's website at http://www.sec.gov. Once you invest in us, you may contact our manager's Investor Relations department
regarding your account information. The telephone number is 866-965-7622. The address is Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17
th
Floor, Suite 1700, Boston MA 02110. You are urged to thoroughly discuss an investment in us with your financial, tax
and legal advisors. See "Where You Can Find More Information."
QUESTIONS AND ANSWERS
ABOUT OUR DISTRIBUTION REINVESTMENT PLAN
We have a distribution reinvestment plan, or DRP, that will allow you to have
part or all of your distributions received from us during our offering period invested in additional shares. See "Plan of Distribution–Distribution Reinvestment Plan." A copy of our DRP is included as Appendix E to this prospectus.
You should read our DRP in its entirety before making any decision to participate.
Q1. What is the benefit of participating in the DRP?
A.    The benefit of participating in the DRP is that the issue of shares under the DRP will not be subject to selling
commissions or the dealer manager fee. This will allow you to purchase shares under the DRP at a price of $9.00 instead of $10.00. The monthly distributions that we expect to pay per share issued under our DRP will be the same as the distributions
paid on our other shares. This effectively means that our rate of distribution on shares issued under our DRP, expressed as a percentage of the purchase price of the shares, will be higher than for our other shares.
Q2. Who may participate in the DRP?
A.    Once you have made a minimum investment of $5,000 in our offering, you are eligible to participate in our DRP. Our DRP becomes
effective once we receive our minimum offering amount of $1,200,000 in cash. In addition, until the end of our DRP period, members of Macquarie Equipment Leasing Fund, LLC (an existing equipment leasing program sponsored by our manager) may elect to
invest all the distributions that they receive with respect to their investment in that fund in our shares issued under our DRP. You may elect to have all or a portion of the cash distributions you receive during our offering period invested in
additional shares pursuant to our DRP. We reserve the right to prohibit qualified plan investors from reinvesting their distributions if that participation would cause our underlying assets to constitute "plan assets." See "ERISA
Considerations."
Q3. When will additional shares be purchased?
A.    We will invest distributions in additional shares as soon as administratively possible after the distribution date, but in any event not later than 30 days from the distribution
date, to the extent that our shares are available for purchase. Investment of distributions in our shares will begin with the next distribution payable after we receive your enrollment form.
Q4. What is the purchase price of the shares purchased under our DRP?
A.    Our dealer manager and selling dealers will not receive selling commissions or dealer manager fees with respect to shares
purchased through our DRP, so the purchase price will be $9.00. Our DRP allows the purchase of fractional shares. You are likely to receive fractional shares.
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Q5. How long will our DRP last?
A.    Our manager may terminate our DRP at any time in its sole discretion, although our DRP requires that participants receive ten business days notice of any termination that would
have an adverse effect on the rights or obligations of a participant. Our DRP will terminate upon the earlier of the end of our offering period and the issuance of 1,555,556 shares under our DRP.
Q6. How can you participate in our DRP?
A.    You may choose to invest all or a portion of your distributions during the offering period at any time by marking the applicable
box in your subscription agreement or by completing any other form provided to you by our manager, the dealer manager or a selling dealer. Your participation in our DRP will begin with the next distribution payable after receipt of your enrollment
form.
Q7. How can you withdraw from our DRP?
A.    You may withdraw from our DRP at any time by providing written notice to Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17
th
Floor, Suite 1700, Boston MA, 02110. Your withdrawal from our DRP
will not affect shares committed for purchase prior to the date of the withdrawal notice.
Q8. Who will administer our DRP?
A.    Our DRP will be administered by our manager, who can be contacted at:
Macquarie Asset Management Inc.
Investor Relations
225 Franklin St, 17
th
Floor, Suite 1700
Boston MA 02110
Telephone: 866-965-7622
Q9. Will you be able to sell your investment in our DRP shares?
A.    Shares purchased through our DRP will be subject to the same transfer restrictions as all other shares sold in this offering. See "Summary of Our Operating
Agreement–Transfer of Our Shares and Substitute Members" and "Redemption of Shares."
Q10. Where can you find more
information?
A. We have filed a registration statement on Form S-1 with the SEC regarding the DRP shares we are
offering by this prospectus and we will file periodic reports and other information with the SEC. These documents are available from the SEC's website at http://www.sec.gov. Once you invest in us, you may contact our manager's Investor
Relations department regarding your DRP account information. The telephone number is 866-965-7622. The address is Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17
th
Floor, Suite 1700, Boston MA 02110. You are urged to thoroughly discuss an investment in us with your financial, tax
and legal advisors. See "Where You Can Find More Information."
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PROSPECTUS SUMMARY
The following is a summary of important information contained elsewhere in this prospectus. You should read the entire prospectus,
including the section entitled "Risk Factors," carefully before making a decision about investing in our shares. This summary does not contain all of the information that you may consider important in making your investment decision.
Our Company
We are a Delaware limited liability company formed on January 19, 2011. We will pool the capital you invest with capital contributed by other investors and borrowings to acquire a diversified
portfolio of equipment and equipment leases. We may also make investments in other equipment related transactions which will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage, such as trading
transactions, residual value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options and joint ventures. See "Investment Objectives and Policies–Types of Transactions and
Transaction Strategies." The pooled capital contributions will also be used to pay fees and expenses associated with this offering and our operations and to fund a reserve. The majority of equipment that we purchase will be accompanied by a
lease of that equipment to third parties, though we may also invest in other types of equipment related transactions. As of the date of this prospectus we have not yet identified any specific equipment investments. We are managed by Macquarie Asset
Management Inc., a member of the Macquarie Group.
Our operations will be divided into three separate phases:
•
Offering Period
: We will raise money from investors during this period, which we expect to last for up to two years from the date of this
prospectus. We expect to invest most of the net proceeds from this offering during this period.
•
Operating Period
: We expect this period will last for five years from the end of the offering period. During this period, we will continue to
reinvest the cash generated from our initial investments to the extent that cash is not needed for distributions to our members or expenses and reserves.
•
Liquidation Period
: This period is anticipated to last one year from the end of the operating period, but may last longer, as adverse market
conditions for some kinds of equipment may exist and require a longer period to dispose of the equipment. The liquidation period can last no longer than 36 months from the end of the operating period. During this period we will dispose of the
remainder of our portfolio.
You should expect to hold your shares for at least eight years from the time
you invest, though the actual duration of your investment may be longer or shorter. Each subscriber has the right to cancel his or her subscription within a period of five business days after receiving a final prospectus. After that time, unless
otherwise approved by our manager in its sole discretion, an investment in our shares is irrevocable and investors will have no right to revoke their subscriptions prior to us achieving our minimum offering amount.
Investment Objectives
Our principal investment objectives are to:
•
preserve, protect and return your invested capital;
•
generate regular monthly cash distributions;
•
reduce our overall risk through diversification of our portfolio;
•
generate investment returns that are not correlated to returns from investments in listed stock and bond markets; and
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•
generate a favorable total return on your investment.
There is no assurance, however, that we will be able to meet our investment objectives.
Our
Manager
Our manager is Macquarie Asset Management Inc. Our investment decisions will be made by our manager's
investment committee, which at the date of this prospectus is comprised of Messrs Fahy and Edghill, or by our manager's board of directors, which at the date of this prospectus is comprised of Messrs Fahy, Edghill and Pitts. See
"Management." The manager and the persons making our investment decisions can be contacted at:
•
our manager's principal office at 225 Franklin St, 17th Floor, Suite 1700, Boston, Massachusetts, 02110; or
•
our manager's telephone number, 866-965-7622.
Our manager's website address is www.macquarie.com/mami. The information contained on our manager's website is not part of this prospectus.
Our manager is a member of the Macquarie Group. The Macquarie Group is a diversified international provider of banking, financial,
leasing, advisory and investment services. The parent entity of the Macquarie Group, Macquarie Group Limited, is listed on the Australian Stock Exchange. As of September 30, 2010, the Macquarie Group operated in more than 70 offices in 28
countries and had approximately 15,500 employees, over 3,700 of whom were located across 28 offices in North America. Our manager is operated by the Macquarie Group's equipment leasing group. It has operated leasing businesses since 1987,
specializing in a range of equipment including ground transportation, aviation, technology, utility and other equipment. As of September 30, 2010, the Macquarie Group's leasing group had approximately $8.6 billion of equipment leases under
management with over 700 employees located in North America, Europe, Asia and Australia / New Zealand. These employees variously specialize in all aspects of equipment leasing operations, from transaction origination to asset management and
equipment remarketing. Our manager is the sponsor of Macquarie Equipment Leasing Fund, LLC, an equipment leasing program which completed its offering period on June     , 2011 and is currently in its operating period.
Our manager will provide or arrange all services necessary and desirable for our operations, including those relating to equipment
acquisitions and disposals, lease management and administrative, reporting and regulatory services. We describe the background and experience of our manager's directors, as well as other executives within leasing businesses of our
manager's affiliates who may provide advice and assistance to us, in "Management." Also see "Fiduciary Duties and Conflicts of Interest." In managing us, our manager will have access to the experienced leasing and other
resources of the Macquarie Group.
The relationship between our members and our manager is governed by our operating
agreement, which is attached as Appendix A to this prospectus. You should be particularly aware that under our operating agreement you will have limited voting rights and our shares will not be freely transferable.
Summary of Risk Factors
An investment in our shares involves significant risks, including the following:
•
All or a substantial portion of your distributions may be a return of capital and not a return on capital. Rates of distribution will not necessarily
be indicative of our overall performance.
•
This is a "blind pool" offering. We have not identified any specific investments as of the date of this prospectus. We cannot determine all
of the potential risks associated with our portfolio at this time.
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•
Investments in our shares are effectively illiquid. There is no active trading market for our shares. You should be prepared to hold your shares for
the duration of the fund, which is anticipated to be approximately eight years, but may be longer.
•
Our manager will manage our operations and may make decisions with which you do not agree or which do not achieve our business objectives. You will
have limited voting rights and limited ability to remove our manager.
•
Our manager will receive substantial fees from us which will reduce the cash available for distribution or investment.
•
If a client is in default under a lease contract with us, we may incur losses.
•
The future market value of our equipment may be lower than anticipated, resulting in a loss on our investment.
•
There may be conflicts of interest between us and our manager and its affiliates, including:
•
the receipt of fees and other compensation by our manager and its affiliates from us;
•
our manager and its affiliates may compete with us;
•
we may engage in related party transactions;
•
our manager or its affiliates may purchase shares as an investor;
•
our manager's decisions regarding the use of leverage and reserves will affect our cash distributions and our manager's compensation;
•
we will rely on the employees of our manager's affiliates;
•
the resolution of conflicts will be undertaken by employees of our manager's affiliates;
•
no independent underwriter conducted due diligence with respect to this offering;
•
we and our manager are not represented by separate counsel; and
•
our manager will act as our tax matters partner.
•
Our use of debt financing means our losses may be greater than if debt financing were not used.
•
The equipment leasing industry is highly competitive, which may hinder our ability to source appropriate or attractive investments.
•
There are material income tax risks associated with this offering.
See "Risk Factors."
Investor Suitability
You must meet our basic suitability requirements to invest in our shares. In general, you must either have:
•
a net worth of at least $70,000 plus at least $70,000 of annual gross income, calculated exclusive of your home, home furnishings and automobiles; or
•
a net worth of at least $250,000, calculated exclusive of your home, home furnishings and automobiles.
In addition, you must meet certain state requirements. Basic suitability requirements vary from state to state.
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You should purchase our shares only if:
•
you meet our basic suitability requirements;
•
you are or will be in a financial position appropriate to enable you to realize to a significant extent the potential benefits described in this
prospectus;
•
you are able to bear the economic risk of the investment based on your overall financial situation and have a net worth sufficient to sustain those
risks, including loss of investment and lack of liquidity;
•
you have an understanding of the fundamental risks of our business, the risk that you may lose your entire investment, the lack of liquidity of the
shares, the restrictions on transferability of the shares, the background and qualifications of the manager, and the tax consequences of your investment; and
•
your investment in us is otherwise suitable for you.
See "Who May Invest."
Federal Income Tax Consequences
This prospectus contains a discussion of material federal income tax issues that may impact you. We have obtained an opinion from our
counsel, Baker, Donelson, Bearman, Caldwell & Berkowitz, a professional corporation, that we are classified as a partnership for federal income tax purposes and on a number of other matters.
Counsel's opinion is based upon the facts described in this prospectus and upon additional facts that we provided to counsel about
our operations. Any alteration of our activities from the description we gave to counsel may render the opinion unreliable. Furthermore, the opinion of counsel is based upon law as of the date of the opinion, which is subject to change either
prospectively or retroactively. You should note that the tax opinion represents only our counsel's best legal judgment and has no binding effect or official status of any kind, on the IRS or otherwise; and neither we nor our counsel has
requested a ruling from the IRS on any of the tax matters discussed in this prospectus. See "Federal Income Tax Consequences."
The Offering
The
information provided below, unless otherwise indicated, does not include any shares to be sold pursuant to our DRP.
Offering
A minimum of $1,200,000 in offering proceeds and a maximum of 20,000,000 shares.
Our manager has determined that the minimum offering amount represents a level of subscription proceeds which will enable our portfolio to be sufficiently diversified.
Our maximum offering amount has been determined by our manager with reference to the subscription proceeds it believes we may be able to raise over our offering period.
Offering Price
$10.00 per share, with the following exceptions:
•
the offering price will be $9.30 per share sold to our manager or its affiliates or to a selling dealer or certain of their affiliates; and
•
the offering price will be $9.00 per share sold pursuant to our DRP.
Reduced selling commissions and volume discounts may also apply.
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See "Plan of Distribution."
The price of $10.00 per share has been determined by our manager by dividing our maximum offering amount of $200,000,000, excluding our DRP, by 20,000,000 shares, the
maximum amount of shares that we are offering excluding our DRP.
Minimum Investment
The minimum number of shares you must purchase is 500.
Escrow
Your subscription monies will be deposited and held in an interest bearing escrow account at Wells Fargo Bank, National Association until:
•
the minimum offering size of $1,200,000 has been achieved; or
•
one year after the offering begins, whichever comes first. If we have not received the minimum offering amount by the date which is one year after the
date of this prospectus, all of your funds will be returned to you with any interest earned and without deduction for any fees.
Estimated Use of Proceeds
Assuming that the maximum offering of 20,000,000 shares being offered is sold, we expect that we will use approximately 88.0% of the gross offering proceeds we receive to purchase our portfolio,
to create a working capital reserve and to pay acquisition fees. We will use the balance of our offering proceeds to pay the dealer manager fee, selling commissions, due diligence expense reimbursements and our manager's organization and
offering expense allowance. See "Estimated Use of Proceeds."
Depreciation
The availability of depreciation and method of depreciation used will depend upon factors including the type of equipment, location of equipment and the type of transaction we have entered into.
Depreciation will only be available for equipment we own subject to leases where those leases are considered to be "true leases" according to IRS guidelines. Generally, we expect to be eligible to claim accelerated depreciation deductions
under the Modified Accelerated Cost Recovery System using the declining balance method on equipment owned by us in the U.S. which is subject to non-full payout leases. Equipment which we own and lease that is used predominantly outside the U.S. may
be required to be written off for federal income tax purposes using the straight-line method of depreciation over a period corresponding to the equipment's class life. Depreciation may not be available for equipment under full-payout leases or
under transactions in which we indirectly invest in the equipment, including through total lease return swaps, participation agreements and other similar transactions.
Leverage
Until we are fully invested, we do not anticipate that the level of debt across our portfolio at any one time will exceed 40.0% of the total purchase price of all equipment in our portfolio.
Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio.
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Compensation of our manager, its affiliates and certain third parties
.
Our manager, affiliates of our manager, including Macquarie Capital (USA) Inc. in its capacity as the dealer manager, and the selling dealers will receive fees and compensation from the offering
of our shares, including the following:
Selling Commission and Dealer Manager Fee
: We will pay the dealer manager fee of 3.0% of the aggregate offering proceeds from shares sold. We will pay a selling
commission to the selling dealers of up to a further 7.0% of the aggregate offering proceeds from shares sold.
O&O Expense Allowance
: Our manager will receive an organization and offering expense allowance on a sliding scale of between 1.72% and 2.40% of our offering
proceeds to reimburse it for expenses incurred in preparing us for registration or qualification under federal and state securities laws and subsequently offering and selling our shares. The O&O Expense Allowance will not exceed the actual fees
and expenses incurred by our manager and its affiliates.
Acquisition Fees
: We will pay our manager acquisition fees of 3.0% of the purchase price we pay for each item of equipment or direct or indirect interest in
equipment that we acquire, subject to a cap as detailed in the operating agreement.
Asset Management Fees
: We will pay our manager asset management fees of between 2.0% and 7.0% of the gross rental payments from our equipment lease investments
held directly or indirectly for the ongoing management of those equipment lease investments. We anticipate that we will pay our manager asset management fees of 5.0% of the gross rental payments from the majority of our leases.
Re-Leasing Fees
: We may pay our manager re-leasing fees of 2.0% of the gross rental payments from the re-leasing of our equipment portfolio, up to a maximum of
7.0% when combined with the asset management fees, payable as each rental payment is made over the term of the lease.
Re-Marketing Fees
: We may pay our manager re-marketing fees of up to 3.0% of the purchase price we receive for each item of equipment or direct or indirect
interest in equipment sold by us. Re-marketing fees payable to our manager will be subordinated until you have received a pre-tax 8.0% per annum internal rate of return compounded daily on all capital contributed to us, calculated on the date
of distribution and taking into account all capital contributions and all distributions, which we refer to as "investor return." Investor return includes a return equal to all capital contributions we have received from you.
Outperformance Fee
: Prior to the
time that investor return is achieved, distributions will be made 99.0% to our members and 1.0% to our manager. After the time that investor return is achieved, distributions will be made 81.0% to our members and 19.0% to our manager. We refer to
the increased percentage of distributions payable to our manager as the "outperformance fee." See "Management Compensation."
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Potential Conflicts of Interest
Various conflicts of interest will arise out of the relationship between us and our manager and its affiliates, including:
•
fees will be payable by us to our manager;
•
our manager and its affiliates may compete with us;
•
our manager's decisions on our use of leverage will affect our distributions and our manager's compensation;
•
we will rely on the employees of our manager's affiliates; and
•
our manager or its affiliates may purchase shares as an investor.
Distribution Reinvestment Plan
Our distribution reinvestment plan, or DRP, provides you with the opportunity to reinvest all or a portion of the cash distributions that you receive from us into additional shares during the
offering period. In addition, until the end of our DRP period, members of Macquarie Equipment Leasing Fund, LLC may elect to invest all the distributions that they receive with respect to their investment in that fund in our shares issued under our
DRP. The purchase price for shares purchased through our DRP is $9.00, which is the public offering price minus the dealer manager fee and selling commissions. See "Plan of Distribution–Distribution Reinvestment Plan."
Subscription Procedure
To purchase our shares, fill out and sign our subscription agreement, the form of which is included as Appendix C to this prospectus. Send your subscription agreement and the purchase price for
the shares, by either check or wire, to us as directed in Appendix C. Wire transfer instructions are available upon request.
After you become a member, you may purchase additional shares by completing and signing an additional investment subscription agreement, similar to the one included as
Appendix D to this Prospectus. See "Plan of Distribution–Automatic Investment Program" for more information regarding our automatic investment program.
Glossary
In general, defined terms used in this prospectus have the meanings assigned to them in the Glossary to this prospectus, or if not defined therein, in our operating agreement.
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ESTIMATED USE OF PROCEEDS
The table below sets forth information about our expected use of the proceeds from this offering, assuming we pay the maximum
compensation, fees and expense reimbursements permitted under our operating agreement. Columns 2 and 3 in the table below set out our best estimate of the use of the gross offering proceeds if only the minimum offering amount of $1,200,000 is
received in the offering, excluding any shares sold pursuant to our DRP. Columns 4 and 5 in the table below set out our best estimate of the use of the gross offering proceeds assuming the maximum number of our shares, 20,000,000, is sold in the
offering at the public offering price of $10.00 per share, excluding any shares sold pursuant to our DRP. We will use proceeds from the sale of shares pursuant to our DRP to make investments in equipment, establish reserves and pay our organization
and offering expenses.
Because we have not yet acquired any of our investments, we cannot precisely calculate some of the
expenses referred to in the tables below, so the amounts may vary. If the maximum amount of this offering is raised, we expect to use approximately 88.0% of our offering proceeds to acquire leased equipment, invest in other transactions meeting our
investment objectives, pay acquisition fees and establish reserves.
Minimum Offering
Maximum Offering
120,000
Shares
(1)(4)
Fees and
Expenses
As a
Percentage of
Total Offering
Proceeds (2)
20,000,000
Shares (3)
Fees and
Expenses
As a
Percentage of
Total Offering
Proceeds (2)
Offering proceeds/assets (4)
$
1,200,000
N/A
$
200,000,000
N/A
Maximum offering expenses based on the amount of the offering proceeds/assets shown in the table:
Selling commissions and related fees (5)
$
84,000
7.00
%
$
14,000,000
7.00
%
Dealer Manager fees (6)
$
36,000
3.00
%
$
6,000,000
3.00
%
Reimbursement for accountable due diligence expenses (7)
$
840
0.07
%
$
140,000
0.07
%
Organization expenses (8)
$
28,800
2.40
%
$
3,860,000
1.93
%
Total public offering and organization expenses (9)
$
149,640
12.47
%
$
24,000,000
12.00
%
Amount available after total public offering and organization expenses
$
1,050,360
87.53
%
$
176,000,000
88.00
%
Acquisition fees (10)
$
30,743
2.56
%
$
5,123,777
2.56
%
Reserves (11)
$
12,000
1.00
%
$
2,000,000
1.00
%
Total Fees and expenses
$
192,383
16.03
%
$
31,123,777
15.56
%
Total proceeds available for investment
$
1,007,781
83.97
%
$
168,876,223
84.44
%
(1)
Our minimum offering amount is $1,200,000 in cash. This table assumes the minimum offering is achieved through the sale of 120,000 shares at $10.00 per share to the
public.
(2)
The percentages in these columns were calculated by dividing the corresponding dollar amount in the columns by the amount of offering proceeds, respectively, as set
forth in the table.
(3)
The table assumes the maximum number of our shares, 20,000,000, are all sold at the public offering price of $10.00 per share, excluding any shares sold pursuant to our
DRP.
(4)
Excludes $2,000 contributed to us by our manager at the time of our formation.
(5)
We will pay our dealer manager and the selling dealers a selling commission of 7.0% per share sold by them, subject to certain exceptions. See "Management
Compensation," "Plan of Distribution" and "How to Invest."
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(6)
We will pay a dealer manager fee of 3.0% of our offering proceeds to our dealer manager. See "Management Compensation."
(7)
We will reimburse our dealer manager and the selling dealers for bona fide, detailed and itemized accountable due diligence expenses, which we anticipate to be 0.07% of
our offering proceeds. However we may reimburse higher amounts of bona fide, detailed and itemized accountable due diligence expenses up to a maximum of 0.5% of the gross offering proceeds of the offering, or up to $1,000,000 if the maximum number
of shares are sold, and up to $1,070,000 if the maximum number of shares and all of the shares offered under our DRP are sold. See "Management Compensation," "Plan of Distribution" and "How to Subscribe."
(8)
We will pay our manager an organization and offering expense allowance, or O&O expense allowance, up to between 1.72% and 2.40% based on the amount of our gross
offering proceeds. Our O&O expense allowance will not exceed the actual fees and expenses incurred by our manager or its affiliates in connection with our organization and this offering. The O&O expense allowance will be payable on shares
purchased by our manager or its affiliates. See "Management Compensation." Our organization expenses do not include the selling commissions, dealer manager fee or reimbursements described above. Our organization expenses, however, do
include legal, accounting, auditing, tax service and escrow fees, printing costs, filing and qualification fees, certain overhead costs of our manager in organizing us and preparing us for the offer and sale of our shares and similar fees and
expenses.
(9)
Our total organization and offering expenses, which includes the dealer manager fee, the selling commissions, due diligence expenses and the O&O expense allowance,
will not exceed 15.0% of our gross offering proceeds.
(10)
The acquisition fees in the above table are attributable to the portion of equipment investments financed through capital contributions. The acquisition fees have been
calculated by first calculating the net offering proceeds available for investment and payment of the acquisition fees, shown above as the "amount available after total offering and organization expenses," then subtracting the amount shown
for reserves.
This amount was then apportioned between acquisition fees and net proceeds attributable to the purchase price of investments so that the acquisition fees represent 3.0%
of the purchase price of investments. We anticipate that we will borrow 40.0% of the acquisition costs of our portfolio, and once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all
equipment in our portfolio. With borrowings, the total acquisition fees that would be paid by us would be approximately $51,238 in the minimum offering and $8,539,628 in the maximum offering.
(11)
Initially, we intend to establish working capital reserves equal to approximately 1.0% of our offering proceeds for normal repairs, replacements and contingencies. The
amount of our reserves may vary from time to time as our manager determines the appropriate amount of reserves for our operations. The amount of reserves our manager establishes will depend on its analysis of:
•
the timing and amount of lease payments we receive;
•
our debt service payments on our borrowings;
•
our costs and expenses and other existing liabilities;
•
our manager's expectations regarding our potential future liabilities, if any; and
•
whether our manager determines a reserve is needed for our future investment acquisitions.
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RISK FACTORS
This investment involves a high degree of risk. You should carefully consider the following risks and uncertainties together with all
of the other information included in this prospectus in evaluating the purchase of our shares. Our business, financial condition, prospects and operating results could be materially adversely affected by any of the following risks. As a consequence,
you may lose part or all of your investment if any of the following risks and uncertainties actually occur.
Risks Associated With this Offering
Our manager's limited operating history decreases your ability to evaluate your investment, and the operating history of our manager's affiliates are not necessarily indicative of how we
will perform.
We were formed on January 19, 2011. Our manager was formed on August 21, 2008. Our manager's
senior management team and its affiliates, which are members of the Macquarie Group, are experienced in equipment leasing. As a new company, however, we have no prior operations that you can use to help evaluate the desirability of purchasing our
shares. Also, we cannot predict whether our intended operations will meet our stated investment objectives. In addition, our manager has only limited experience in managing an equipment leasing fund. This is only the second equipment leasing fund
our manager has managed. The first equipment leasing fund managed by our manager, Macquarie Equipment Leasing Fund, LLC, is still in its operating phase, and in any event the results of this prior Fund will not necessarily be indicative of our
results. See "Management."
All or a substantial portion of your distributions may be a return of capital and not a return on
capital. Rates of distributions will not necessarily be indicative of our overall performance.
The taxable income we
report to you each year will not equal the distributions you receive. The proportion of distributions which represent returns of capital, or a return of your initial subscription, and the proportion of which represent income earned by us, or returns
on capital, will vary over time for a variety of reasons, including depreciation deductions which reduce our taxable income but not our distributable cash. Consequently, taxable income is not indicative of our performance, which cannot be determined
until all of our investments have ended and assets have been disposed.
To the extent that distributions we make to you are
distributions of uninvested capital from this offering, the remaining value of your investment in us will be reduced.
We have not
identified any specific investments as of the date of this prospectus. We cannot determine all of the potential risks associated with our portfolio at this time.
This is a "blind pool" offering because we have not identified any specific investments as of the date of this prospectus. Thus, you are not able to fully assess all of the potential risks
associated with an investment in our shares as you do not have information about the transactions we will enter into, including:
•
the exact type, age, condition, location or manufacturer of equipment we may purchase;
•
the exact clients with whom we will transact with and their ability to pay;
•
the duration, rental rates, currency, governing laws and other terms of leases and other contracts we may enter into;
•
the price we will pay for equipment and the residual value investment we will make into equipment;
•
the amount of debt that will be used in our portfolio; or
•
the diversification of equipment, industry and client types within our portfolio.
We may invest in the types of equipment listed in "Investment Objectives and Policies." We anticipate investing directly and
indirectly in a diversified portfolio of equipment and equipment related transactions in accordance with our investment objectives. However, you must rely upon our manager's judgment and ability to,
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among other things, select the equipment to purchase, evaluate the equipment's condition, evaluate the appropriate residual value investment to make into the equipment, determine appropriate
levels of debt to be incurred, evaluate the ability of our clients to continue paying rent and negotiate purchase documents. We cannot guarantee that our manager will achieve our investment objectives.
Investments in our shares are effectively illiquid. There is no active trading market for our shares. You should be prepared to hold your shares
for the duration of the fund, which is anticipated to be approximately eight years but which may be longer.
Our shares
will not be listed on any national securities exchange at any time and we will take steps to ensure that no public trading market develops for our shares. See "Federal Income Tax Consequences." Your ability to sell or transfer your shares
will be very limited. You should be prepared to hold your shares for the life of the fund, which is anticipated to be approximately eight years but which may be longer, as adverse market conditions for some kinds of equipment may exist and require a
longer period to dispose of the equipment. Moreover, even if you are able to transfer some or all of your shares, you may receive less than the amount of your original investment or suffer adverse tax consequences. In addition, under our operating
agreement, our manager has the discretion under certain circumstances to prohibit transfers of shares, or to refuse to consent to the admission of a transferee as a member. See "Summary of Our Operating Agreement–Transfer of Our Shares and
Substitute Members."
If you request that we repurchase your shares, the price you receive may be substantially less than you would
receive if you were to hold your shares for the duration of the fund.
You may request that we repurchase some or all
of your shares at any time. However, we are under no obligation to redeem any of your shares and we will not maintain a cash reserve for this purpose. If we do agree to redeem your shares, the redemption price has been unilaterally set. Depending
upon when you request a repurchase, the repurchase price may be less than the unreturned amount of your investment. See "Redemption of Shares."
The amount and timing of monthly distributions may vary over time. Cash distributions may not be made every month.
From time to time, our manager may vary the amount of, or completely suspend, cash distributions to investors if it believes it to be in the best interests of the fund to do so. Losses from fund
investments or unavailability of liquid assets may also result in reductions or suspensions of distributions. Furthermore:
•
during the liquidation period, cash distributions may be irregular while fund investments are being disposed; and
•
large returns of capital during the life of the fund will reduce the cash available for future distributions.
While our manager anticipates making monthly cash distributions, you should not rely on the cash distributions from your shares as a
regular source of cash. See "Income, Losses and Distributions."
If we raise less than our maximum offering amount, our
portfolio may be less diversified than would otherwise be the case.
We may begin operations with a minimum
capitalization of $1,200,000. Should we raise less than our maximum offering amount of $200,000,000, our portfolio and our clients may be less diversified than would otherwise be the case. At our minimum capitalization or at low levels of
capitalization, we will purchase only low cost items of equipment, such as information technology, gas meters or individual rail cars, rather than high cost items of equipment. As we will be limited in the types and number of transactions we may
enter into, a single transaction may have a greater impact on the overall performance of our portfolio. If we only raise the minimum offering, or have a low level of capitalization, a loss on any single transaction may have a greater negative impact
on our financial performance.
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If we do not raise our minimum offering amount, we will not commence operations.
We require a minimum capitalization of $1,200,000 to commence operations. If the amount of proceeds raised in the 12 months after the
effective date of the registration statement of which this prospectus is a part are insufficient to constitute the minimum offering, all subscription funds deposited by you into our escrow account will be returned to you, together with any interest
earned and without deduction for fees, commissions or expenses. In such a case we will not begin any business operations, we will not make any investments and we will not make any distributions.
Our manager will manage our operations and may make decisions with which you do not agree or which do not achieve our business objectives. You will
have very limited voting rights or ability to remove our manager.
Our manager will have all management control over
our operations. Our success will significantly depend upon:
•
the ability of our manager to source appropriate transactions for us in a timely manner;
•
the quality of the investment decisions our manager makes, especially relating to the types of equipment into which we invest, the timing and
management of those investments, assessments of our potential clients and the residual value investments we make in equipment; and
•
our manager's ability to extract maximum value from equipment once that equipment reaches the end of its lease term.
We will not grant our manager or its affiliates an exclusive right to sell equipment on our behalf. However, given the relationship
between our manager and other members of the Macquarie Group, we anticipate that most, if not all, of our equipment will be remarketed by our manager or our manager's affiliates.
An affirmative vote of members owning not less than a majority of our shares is required to remove our manager or anyone else as manager.
You should not purchase our shares unless you are willing to entrust all aspects of our management to our manager. You will have only limited voting rights and you are not permitted to take part in managing, establishing or changing our investment
objectives or policies. See "Summary of Our Operating Agreement."
Our manager will receive substantial fees from us which
will reduce the cash available for distribution.
We will pay our manager, its affiliates and third party selling
dealers fees and expense reimbursements. See "Management Compensation." The rate of fees has been unilaterally determined by our manager in accordance with guidelines set forth in the NASAA Guidelines. The NASAA Guidelines are a set of
protocols administered by the North American Securities Administrators Association that address the formation and operation of direct participation programs, such as us. See "Glossary." Certain of these fees, including the selling
commissions, the dealer manager fee and acquisition fees, as well as the organization and offering expense allowance, may be paid without regard to the profitability of our operations or the cash available for distribution to investors. Because we
will use leverage to acquire our investments, the amount of fees and expense reimbursements payable by us to our manager and its affiliates will be higher than if we did not use leverage. The payment of those fees will reduce the overall cash
available for distribution to you over the life of the fund.
An investment in our shares is not a complete hedge against high
inflation.
An investment in our shares is not a complete hedge against periods of high inflation. During periods of
high inflation, we expect that the value of equipment in our portfolio may be higher than would otherwise be the case. Also, rental payments we receive may increase under floating, as opposed to fixed, rate leases where interest rates rise in
conjunction with higher inflation. However, our inflation-adjusted returns may be adversely affected where rental payments made by clients are fixed throughout the lease term and there are no adjustments in the rental payments for inflation.
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Our assets may be plan assets for ERISA purposes, which could subject our manager to additional
restrictions on its ability to operate our business.
Under the look-through rule applied under ERISA and the Code, the
assets of an entity in which an employee benefit plan or other tax-exempt investor has made an equity investment may constitute assets of that investor. If you are a fiduciary of a qualified plan or IRA, you should consult with your advisors and
carefully consider the effect of that treatment if that were it to occur. See "ERISA Considerations."
The price of the shares
offered by this prospectus has been arbitrarily determined. You should not rely on this price as an indication of the value of the shares.
The offering price per share has been determined arbitrarily and is not based upon our actual or potential earnings or any other traditional criteria for determining value. No representation is made
hereby that a share has a market value equal to the purchase price or could be sold at the price or at any other price.
Risks Associated With Our Equipment Leasing Activities
If a client is in payment default under a lease contract with us, we may
incur losses.
Our lease contracts will require our clients to make periodic rental payments to us. Leases and other
associated contracts may, in some circumstances, also require clients to pay other amounts to us in the form of equipment purchase option prices, extended term rentals, late payment interest and damages. If a client fails to make required payments
to us under a lease:
•
we may lose rental or other revenue which we may not be able to recover;
•
we may incur legal and other costs in taking enforcement action against a client or in repossessing, storing and transporting the equipment;
•
we may incur costs in breaking financing arrangements associated with the lease, including costs associated with the early termination of loans or
hedging arrangements; and
•
we may incur losses when selling equipment earlier than originally anticipated. This risk is greater for equipment which depreciates rapidly in market
value, such as computer equipment.
The risk of payment default under a lease is greater for clients with
lower or no credit ratings. Although we will seek to enter into transactions where we believe the likelihood or consequence of client payment default is acceptable under the circumstances or where acceptable security is available, we will not
necessarily require our clients to have a minimum credit rating determined by an independent rating agency. See "Investment Objectives and Policies." We may incur losses if one of our clients defaults on a lease with us, which could have a
material adverse effect on our financial condition.
In addition to payment defaults, if a client is in another form of default under a
lease contract with us, we may incur losses.
In addition to the requirement for our clients to make payment to us, our
clients will have other obligations to us under a lease. These may include obligations to maintain and service the leased equipment; to ensure there is no material adverse change in our client's financial position; to insure the equipment; to
furnish certain information to us; and to allow us to inspect the equipment. If a client fails to maintain equipment in accordance with the terms of its lease, we may have to make unanticipated expenditures to repair the equipment in order to
protect our investment. We are likely to have rights against the client to compensate us for any failure to maintain equipment to the appropriate standard. However, we cannot assure you that this compensation would make us whole for losses in our
investment or that the client will be able to pay us. If a client is in default under a lease contract, it may not be economically feasible for us to take legal action against the client, terminate the lease and/ or repossess the equipment. Should
this occur, we may incur losses associated with legal, repossession and other costs.
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Adverse general economic conditions may negatively impact our clients' ability to pay us, causing
us losses.
Adverse general economic conditions may cause financial distress to our leasing clients, which in turn may
increase the likelihood that they will fail to meet their contractual obligations to us, including the obligation to make rental payments or restitution for damages. We may incur losses if one of our clients defaults on a lease with us, which could
have a material adverse effect on our financial condition.
Any delays in the investment of the offering proceeds may diminish the
returns on our investments.
We will receive only minimal, if any, returns on the offering proceeds until the time the
offering proceeds are invested in equipment lease or other equipment related transactions. If we do not invest the offering proceeds promptly, the delay may diminish the returns that the investment would have otherwise realized had a given
investment been made earlier.
Some of the equipment that we purchase may be used equipment which, if not in proper condition, may
reduce its resale value.
Some of the equipment that we purchase may be used equipment. For example, this will occur
where we enter into a "sale and leaseback" transaction with a lessee that is also the seller of the equipment. While we may inspect used equipment prior to purchase, there is no assurance that any inspection of used equipment prior to its
purchase will reveal any or all defects and problems with the equipment that may occur after it is acquired by us. We will seek to obtain representations from the sellers and lessees of used equipment that the equipment has been maintained in
compliance with the terms of their leases, including: that neither the seller, as lessor, nor the lessee, is in violation of any material terms of those leases; that the equipment is in good operating condition and repair; and that the lessee has no
defenses to the payment of rent for the equipment as a result of its condition. We would have rights against the seller of the equipment for any losses arising from a breach of representations made to us, and against the lessee for any default under
the lease. However, we cannot assure you that these rights would make us whole with respect to our entire investment in the equipment or that our expected returns on the equipment, including legal costs, costs of repair and lost revenue from the
delay in being able to sell or re-lease the equipment due to undetected problems or issues. Losses incurred due to reduced resale value could have a material adverse effect on our financial condition.
If a client files for bankruptcy, we may have difficulty enforcing the terms of the lease and may incur losses.
In the event that a client files for protection under bankruptcy laws, a bankruptcy court may reject, reduce the term or alter the
provisions of our lease with that client. If this happens, we may not receive the full amount of rental payments contemplated by that lease. We may also experience difficulties, legal costs and delays in recovering equipment from a bankrupt client
that is involved in a bankruptcy proceeding or has been declared bankrupt by a bankruptcy court. The sales proceeds we receive from disposing of recovered equipment may not cover our outstanding investment in that equipment.
Movements in foreign currency rates may result in losses.
We may enter into purchase, sale and lease contracts for equipment where the payments to be made or received are not in U.S. dollars. Foreign exchange hedging contracts are, for a fee, a means of
protecting against fluctuations in foreign currency exchange rates. While we intend to enter into foreign exchange hedging contracts where it is both possible and economically appropriate to do so, our portfolio may not be fully hedged against
foreign currency fluctuation risk. If we are due to receive payments from a client or purchaser in a currency other than U.S. dollars, a strengthening of the U.S. dollar against that currency will mean we are receiving less, as expressed in U.S.
dollars, than initially anticipated, which would have a negative impact on our returns.
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We may suffer losses as a result of transacting business in foreign countries, dealing with foreign
clients or having our equipment located in a foreign jurisdiction.
It is likely that we will enter into transactions:
•
with foreign clients;
•
where the equipment is permanently or temporarily located outside the U.S.; or
•
where the contracts are governed by foreign laws.
These transactions involve a number of risks, including the following:
•
We may have difficulty enforcing our rights under foreign contracts.
•
We may have difficulty repossessing our equipment outside the U.S.
•
Legal costs may be more expensive outside the U.S.
•
Foreign governments may confiscate equipment, nationalize equipment, retrospectively change laws, impose new or changed fees, duties or taxes or impose
foreign exchange restrictions which hamper our ability to receive payment in the U.S.
•
Foreign courts may not recognize judgments obtained in U.S. courts.
•
We may have documentary risks where contracts are written in a language other than English.
•
Complications may arise from interpretations of tax or legal codes and any regulatory registration requirements.
•
Changes in, or interpretations of, foreign laws and regulations may adversely affect our ability to enter into leases, sell equipment or repatriate
profits to the U.S.
•
The income earned in foreign jurisdictions may be subject to withholding and/or income taxes, and depending on the foreign country, the U.S. may not
have a tax treaty in place to reduce or eliminate the tax.
•
The Code imposes restrictions on the use of foreign tax credits, which may prevent you from claiming full credit for your share of foreign taxes. See
"Federal Income Tax Consequences–Foreign Tax Considerations for U.S. Investors."
Furthermore, foreign jurisdictions and clients may be more prone to corruption, unsavory business practices, conflict, sanctions or civil
unrest. All of these risks may impair our ability to receive amounts due to us or to remarket equipment in a satisfactory manner.
The
market value of our equipment may be lower than anticipated, resulting in a loss on our investment.
It is likely that
the majority of our leases will be "operating" or "non-full payout" leases. Under non-full payout leases, the total sum of all the rental payments made by our client over the duration of the lease, on a present value basis, will
be less than the original price paid by us for the initial purchase of the equipment. The difference between the original purchase price of the equipment and the sum of the rentals we receive over the lease term, adjusted for the time value of
money, is known as our "residual value" investment. In general, a client will return the leased equipment to us at the end of the lease. We will then sell or re-lease the equipment for an amount that we refer to as the "remarketing
price." We hope to make a return on our investment by obtaining a remarketing price that is in excess of our residual value investment in that equipment. This is where we expect to make a significant portion of our overall returns.
When we enter into a lease, we will not know what the remarketing price of the leased equipment will be when the lease ends and the
equipment is returned to us. If the remarketing price is lower than anticipated, we
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will either lose money or receive lower returns than anticipated. There are numerous factors beyond our control which can materially adversely affect the remarketing price we can achieve for
equipment, including:
•
the general market value for the equipment at the time we are attempting to remarket that equipment;
•
the cost of new equipment at the time we are remarketing the used equipment;
•
technological and regulatory developments since our initial purchase of the equipment which could reduce the market value of the equipment;
•
general economic conditions and the conditions in industry-specific market sectors; and
•
the condition of the equipment returned to or repossessed by us.
Additionally, there is a risk that the best remarketing price available is only obtainable in a market where we do not have appropriate
or adequate remarketing resources. We cannot assure you that our assumptions with respect to value will be accurate or that the equipment will not lose value more rapidly than we anticipate.
We may not require clients to insure equipment, clients may not insure equipment in breach of their lease contract, or it may not be feasible to insure some risks, resulting in loss of our
investment and additional losses.
We may not require clients to insure equipment against loss, damage, theft,
destruction or injury or against damage caused through the use of the equipment. For example, we may not require insurance where the value of equipment is relatively low or where it is not customary for the client to obtain insurance. Other risks
may not be insurable or may not be economically feasible to insure. Furthermore, clients who are obliged to insure equipment may nevertheless fail to do so in breach of their lease contract.
Our clients will generally be responsible for risk of loss or damage to or caused by equipment, regardless of whether insurance is in
place. However, where losses or damage are not covered by insurance, there is a risk that the client will be unable to compensate us for those losses. In this case, we may lose all or part of our investment or incur losses significantly in excess of
our investment, which could have a material adverse effect on our financial condition.
In leasing some types of equipment, we may be
exposed to environmental tort liability.
In leasing some types of equipment, such as transportation assets designed to
carry hazardous materials, we may be exposed to environmental tort liability. Although we will use reasonable efforts to minimize the possibility of and exposure to environmental tort liability, including by means of attempting to obtain insurance,
we cannot assure you that our assets will be protected against those claims.
Failure to maintain equipment registrations and unexpected
regulatory compliance costs may result in losses.
Certain types of transportation equipment are subject to
registration requirements by governmental agencies in the U.S. and abroad. Should we fail to properly maintain registration of that equipment, we may lose the ability to own or operate that equipment. In addition to impairing our ability to earn
rentals from that equipment, penalties may be imposed upon us and we may be forced into a sale of that equipment on unfavorable terms. Furthermore, governmental agencies may require changes or improvements to equipment resulting in increased costs
and loss of rental revenue while the changes are made. This would adversely affect our anticipated returns from that investment.
Our
returns may be lower than anticipated under pay per use agreements.
Under a pay per use agreement, the regular rental
payments due from the client are not fixed or determined solely by reference to an underlying interest rate. Instead, the amount the client pays for the use of the equipment is based upon their actual usage of the equipment. Under these agreements,
a client will typically pay more for the equipment the more often it uses the equipment. Where a client under a pay per use agreement uses the
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equipment less than we anticipated, this may possibly result in a higher resale value for the equipment which may in turn benefit us. However, we will receive lower payments from clients from
their usage of the equipment and this may in turn reduce our returns from that investment. While our manager anticipates that pay per use agreements will be a small part of our portfolio, there is no restriction on the proportion of our portfolio
that may be invested in pay per use agreements.
Risks Associated With Our Equipment Trading and Other
Activities
The risks outlined above in "Risks Associated with our Equipment Leasing Activities" and elsewhere in
this section and prospectus are also applicable to our equipment trading and other activities, including risks relating to our clients' ability to pay, general economic conditions and foreign currency rates. In addition to these risks, the
following risks are also applicable:
Equipment trading transactions and investments in equipment purchase options, total lease return
swaps, participation agreements or other similar transactions related to equipment may be riskier than equipment lease transactions.
We may purchase equipment without any concurrent lease agreement or sale agreement being in place. In those transactions, we are anticipating that purchased equipment can be sold or leased at a later date
at a profit. These transactions may be inherently more risky than equipment purchases concurrently combined with a lease being entered into with a client. Should the market for equipment purchased by us on such a basis drop after our purchase, we
may incur losses on the resale of the equipment and costs in storing and remarketing that equipment.
We may acquire equipment
purchase options or obligations to purchase equipment. We anticipate that these transactions would be for a pre-determined price at a future date, usually at the end of an underlying lease term. In the event of a bankruptcy by the party granting the
option or obligation, we might be unable to enforce the option or obligation or recover the option price paid. If the option grantor or seller defaults under the transaction contract, we may incur legal and other costs to enforce our rights but may
not ultimately gain ownership of the equipment.
We may also enter into total lease return swaps, participation agreements and
other transactions related to equipment. Under those arrangements, we may not have a direct ownership interest in equipment. Instead, we will have a right to receive, and an obligation to make, payments associated with, or with reference to, the
underlying equipment or equipment lease. In the event of default or bankruptcy by the other party to the transaction, we may not be able to recover payments we are owed or have recourse to the underlying equipment. We will not enter into stock, bond
or other exchange traded derivative contracts.
Investment in joint ventures, special purpose companies or companies which own equipment
may subject us to risks relating to our co-investors or underlying companies that could adversely impact the financial results of those investments.
We may invest in joint ventures with other businesses operated by our manager, our manager's affiliates, including Macquarie Equipment Leasing Fund, LLC, or with unrelated third parties. We may also
invest, either on our own account or with others, in special purpose companies created specifically for equipment investments or to invest in companies which own or operate equipment. We will not, however, invest in the shares or partnership
interests of other equipment leasing programs. Investing in joint ventures, special purpose companies and other companies involves additional risks not present when acquiring equipment that will be wholly-owned by us directly. These risks include
the possibility that our co-investors might declare bankruptcy or otherwise fail to meet financial commitments, thereby obligating us to pay all of the debt associated with the joint venture. Additionally, the co-investors or underlying companies
may have objectives which are not wholly consistent with
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our investment objectives. This may result in ineffective decision making, impasses on joint venture decisions, disputes and failure to maximize our returns. Furthermore, even if we have the
right to purchase equipment from another joint venturer, we may not have the resources to do so.
Risks
Associated With Our General Business Operations
Key personnel may leave our manager's organization, diminishing the expertise
and resources available for management of us and our business activities.
Our success will be dependent upon our
manager utilizing sufficient and appropriately skilled resources and personnel to manage us and our business affairs. We will require resources and personnel including transaction origination, lease and asset management, equipment remarketing,
accounting, tax, legal, compliance, operational, investor relations and marketing resources and personnel. These resources and personnel may be provided exclusively by our manager or utilized on an as-needed basis from affiliates of our manager.
Many of these personnel will be difficult to replace on short notice where the departing personnel hold special relationships, such as relationships with potential clients, or special technical knowledge, such as knowledge about the likely future
resale value of specific types of equipment. The departure of key personnel from our manager or affiliates of our manager may result in business disruptions, poor investment decisions and reduced returns from our portfolio.
There may be conflicts of interest between us and our manager and its affiliates.
Our manager's decisions will be subject to various conflicts of interest arising out of its relationship to us and its affiliates. As
of the date of this prospectus, affiliates of our manager are engaged in equipment lease and trading activities on their own behalf and on behalf of other investors. Our manager sponsors another equipment leasing program currently in its operating
phase, and our manager may sponsor additional equipment leasing programs in the future. See "Fiduciary Duties and Conflicts of Interest" and our operating agreement attached hereto as Appendix A for more detailed information. Conflicts of
interest that may affect us and our members include:
•
the receipt of fees and other compensation by our manager and its affiliates from us;
•
our manager and its affiliates, including other equipment leasing programs sponsored by our manager, may compete with us for investments in equipment;
•
our manager's decisions regarding the use of leverage and reserves will affect our cash distributions and our manager's compensation;
•
our manager or its affiliates may purchase shares as an investor;
•
we will rely on the employees of our manager's affiliates;
•
the resolution of conflicts will be undertaken by employees of our manager's affiliates;
•
no independent underwriter conducted due diligence with respect to this offering;
•
we and our manager are not represented by separate counsel; and
•
our manager will act as our tax matters partner, and will negotiate with the Internal Revenue Service, or IRS, to settle tax disputes that would bind
us and our members; those negotiations might not be in your best interest given your individual tax situation.
In particular, our manager may cause us to enter into transactions with its affiliates. These related party transactions may include:
•
agreements for services to be provided to our manager or to us by our manager's affiliates; and
•
agreements for the sale of equipment, equipment leases and/or other transactions to, or from, us from, or to, our manager or affiliates of our manager.
This category of transaction includes transactions
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where we are buying equipment or transactions from our manager or our manager's affiliates which were specifically purchased by our manager or our manager's affiliates for sale to us,
which we refer to as "warehousing" of transactions on our behalf.
Related party transactions may
provide advantages to us, including the possibility of accessing appropriate lease transactions otherwise unavailable to us, or making investments in equipment that was purchased by our manager's affiliates prior to us having sufficient capital
to make the purchase ourselves. However, these related party transactions provide our manager and its affiliates with an economic incentive to negotiate the transaction in a manner which is disadvantageous to us, for example, by selling equipment to
us for a price above its market value.
The foregoing conflicts could result in materially adverse effects on us and our
members. Our manager, in its sole discretion, will attempt to manage those potential conflicts by the exercise of its business judgment and through policies and procedures designed to minimize the possibility of conflicts of interest. There is no
assurance that these measures will prevent adverse consequences resulting from the numerous potential conflicts of interest. Additionally, should the manager be in breach of its fiduciary duty to us, it is unlikely that we will initiate legal action
against our manager as our manager controls our operations. See "Fiduciary Duties and Conflicts of Interest."
Directors and
other personnel or resources associated with our manager will manage or be involved with other businesses and activities and will not devote their time exclusively to managing us and our business.
We will not employ our own full-time officers, managers or employees. Instead, our manager will supervise and control our business
affairs. Our manager's officers and staff providing services to our manager will also be spending time supervising the affairs of other equipment leasing programs now and in the future. They may also spend time on other projects and businesses
of our manager and its affiliates. They will devote the amount of time necessary to conduct our business, which may not be the same amount of time that would be devoted to us if we had separate officers and employees. See "Fiduciary Duties and
Conflicts of Interest."
Furthermore, our manager will be reliant upon its affiliates introducing potential transactions
to our manager which we may or may not invest in. Our manager's affiliates will devote their time and resources primarily to their own businesses and not to us or our manager. This may result in us receiving fewer opportunities than if we had
our own full-time employees.
We and our manager do not have independent audit and compensation committees
Although our manager believes that the fees and other compensation we will pay to it and its affiliates are reasonable and competitive in
the industry, they were established by our manager and were not determined by an independent compensation committee composed of persons who are not affiliates of our manager. See "Management Compensation." Also, our manager, rather than an
independent audit committee composed of persons who are not affiliates of our manager, will select our independent registered public accounting firm and supervise the preparation of our audited financial statements included in our annual reports to
you.
Our use of debt financing means our losses may be greater than if debt financing were not used.
We will use debt, or leverage, when we acquire equipment and may also use debt for working capital purposes. Debt finance we use may
include:
•
debt which is used to purchase specific items of equipment. In the event of payment default by the underlying lessee, the third party debt provider may
or may not have recourse against us to make good the payment default. The third party debt provider may also have priority over us in its security interest in the equipment or proceeds from the equipment; and
•
debt which is secured against all or part of our portfolio.
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We anticipate that the level of debt across our portfolio will be approximately 40.0% of the
total purchase price of all equipment in our portfolio, and once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio. This means that the total value of
equipment that we purchase may be significantly higher than the actual capital we raise. While the use of debt can enhance our returns, it also carries material risks, including the following:
•
If we are unable to pay our debt obligations because of the failure of our clients to make timely payments to us, or due to other factors, we may lose
the underlying equipment and our investment.
•
For any given lease or other transaction, using debt will increase the sensitivity of our investments to changes in the resale value of equipment in
which we have invested. A negative movement in the resale value of equipment will have a greater negative impact on our returns than had we not used debt. This in turn will negatively impact our ability to pay distributions to you.
•
Lenders may require covenants that could restrict our flexibility in making business and financing decisions in the future, and in order to repay our
financing, we may be required to dispose of our assets at a time when we would otherwise not do so.
•
A highly leveraged capital structure may significantly increase the cost at which we can borrow additional funds, which will in turn negatively impact
our ability to pay distributions to you.
The use of debt will also increase the fees that we will pay our
manager. See "Investment Objectives and Policies–Borrowing Strategies and Limitations."
Debt finance may be unavailable
on appropriate terms resulting in our portfolio being leveraged at a sub-optimal level.
We intend to incur
indebtedness in purchasing our portfolio. The use of leverage can assist in enhancing returns and is a commonly used strategy in equipment financing. During periods of general illiquidity in financial markets, such as existed during 2008 and 2009,
it may not be possible for our manager to source debt at an appropriate interest rate, on appropriate terms or at appropriate levels. Furthermore, we are prohibited from obtaining permanent debt facilities from our manager or its affiliates. This
may mean our portfolio is sub-optimally leveraged, reducing overall returns to our investors.
If debt on appropriate terms is
not available to us at all, the reduced leverage of our portfolio may significantly reduce overall returns and distributions to our members. It may also result in us not completing otherwise attractive equipment acquisition opportunities, further
reducing our overall returns.
Disruptions to our information technology systems may result in business disruptions and losses.
Our manager will rely upon multiple information technology systems that it or its affiliates operates to effectively
manage our business operations, including lease management systems, accounting systems, invoicing systems, investor and sales databases, website and client relationship systems. Furthermore, our manager may be reliant upon the information technology
systems of third party service providers. Failure of any of these systems may disrupt our ability to bill for or collect payments, pay distributions, meet regulatory requirements or track our assets. Those disruptions may result in additional costs
and damage to relationships with key clients, in turn hampering our ability to source future lease transactions. Accordingly, any information technology disruptions could have a material adverse effect on our financial condition.
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The equipment leasing industry is highly competitive, which may hinder our ability to source
appropriate or attractive investments.
The equipment leasing industry both in the U.S. and abroad, and across
different equipment classes, is highly competitive. In particular:
•
it is often relatively easy for new entrants to enter the equipment leasing industry as lessor;
•
leasing companies often act irrationally or unprofitably to gain market share, reducing the availability of attractive lease transactions to other
lessor in the market; and
•
lease transactions are not always written in a manner which provide the lessor with an appropriate rate of return for the risk being assumed.
Although certain affiliates of our manager are experienced leasing companies, the existence of a high
number of competitors in the equipment leasing industry may hinder the ability of affiliates of our manager to introduce attractive or appropriate lease transactions to our manager. It may also hamper the ability of our manager to source those
transactions directly itself. This may result in lower than anticipated returns from our investments or acceptance of greater levels of risk in our investments.
Changes in interest rates may negatively affect our returns
Changes
in interest rates may have a negative effect on our returns. We primarily intend to enter into lease agreements which are "fixed-rate," whereby the rental payments are fixed for the duration of the lease. We may also enter into lease
agreements which are "floating rate," whereby rental payments during the lease vary with reference to an underlying interest rate. Interest rate hedging contracts are, for a fee, a means of protecting against fluctuations in interest rates
associated with floating rate leases. While we intend to enter into interest rate exchange hedging contracts for floating rate leases where it is both possible and economically appropriate to do so, our portfolio may not be fully hedged against
interest rate fluctuation risk.
During periods of high or rising interest rates, we may be able to enter into lease
transactions whereby the lessee is obliged to make higher fixed rental payments to us. Under unhedged floating rate contracts we will also effectively receive higher rental payments. However, higher interest rates may be more likely to result in
lessee payment defaults and bankruptcies which in turn may result in losses on our investment.
During periods of low or
falling interest rates, rental payments that we receive under unhedged floating rate leases will effectively be reduced. Fixed rate lease contracts and hedged floating rate leases will also be written at lower rental rates. This may also reduce our
investment returns. Furthermore, periods of low interest rates may be combined with general economic periods of "high liquidity" or easier access to debt. In those instances, the economic benefit for lessees of leasing compared to other
forms of financing may be diminished, thus adversely affecting our ability to enter into appropriate lease transactions.
Risks Associated With the Tax Treatment of Us and Our Shares
Adverse tax consequences will result if the IRS classifies us as a
corporation rather than a partnership.
Our counsel has rendered an opinion to us that we will be taxed as a
partnership and not as a corporation as long as we meet certain requirements set forth in the opinion; however, that opinion is not binding on the IRS and the IRS may challenge that classification. We will not apply for an IRS ruling that we will be
classified as a partnership for federal income tax purposes. If we are treated for federal income tax purposes as a corporation in any year, then:
•
we would be required to pay federal income taxes on our taxable income;
•
state and local income taxes could be imposed on us;
•
our losses would not be reportable by our members on their personal income tax returns;
•
any distributions would be taxable to our members; and
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•
distributions would be classified as portfolio income which would not be available to offset passive activity losses.
In addition, a change in status from a partnership to a corporation could result in taxable income to a member. To minimize the
possibility that we will be treated as a corporation, our operating agreement places restrictions on your ability to transfer our shares. You and your advisors should not only review the "Federal Income Tax Consequences" section with care,
but also carefully review your own individual tax circumstances. See "Federal Income Tax Consequences–Classification as a Partnership."
We and our members could lose deductions if the IRS treats our operating leases as sales or finance leases.
No assurance can be given that our leases of equipment will be treated as operating leases by the IRS rather than as sales or finance leases. An operating lease is one where, in present value terms, the
sum of the rentals paid by the lessee over the lease term is less than the original purchase price paid by the lessor for the leased equipment. A finance lease is one where the rentals paid by the lessee, plus any other fixed payments the lessee is
obliged to make under the lease, compensate the lessor in full for the purchase price paid by the lessor for the equipment at the outset of the lease, plus a satisfactory return. If our leases are treated as sales or finance leases instead of
operating leases, we and our members will not be entitled to cost recovery, depreciation or amortization deductions with respect to those leases and our leasing income might be deemed to be interest which would constitute portfolio income instead of
passive income. The denial of the cost recovery, depreciation or amortization deductions could cause your tax liabilities to increase. We do not intend to apply to the IRS for a ruling that any leases of equipment will be treated as leases for
federal income tax purposes. See "Federal Income Tax Consequences–Tax Status of Leases" and "Federal Income Tax Consequences–Limitation on Deduction of Losses."
You may incur tax liability in excess of the cash distributions you receive in a particular year.
Your tax liability from owning our shares may exceed the cash distributions you receive from your investment. For example, to the extent any of our debt is repaid with rental income or proceeds from
equipment sales, taxable income could exceed the related cash distributions. Also, our use of the accrual method of accounting may require us to include rental income before the rental payments are received and available for distribution. Further,
sales of our investments may result in taxes in any year that are greater than the amount of cash from the sale and result in tax liability to you in excess of cash distributions. Therefore, you will have to pay any excess tax liability out of other
funds.
You may be subject to greater income tax obligations than originally anticipated.
We expect that some of the equipment that we purchase may be eligible for accelerated depreciation under the Modified Accelerated Cost
Recovery System. See "Federal Income Tax Consequences–Cost Recovery Deductions." However, a significant portion of our equipment may be used predominately outside the U.S. and will therefore not be eligible for accelerated
depreciation. That equipment is generally depreciated over longer cost recovery periods than comparable equipment used inside the U.S. In addition, if we acquire equipment that the Code deems to be tax-exempt use property, losses attributable to the
equipment will be suspended and may be deducted only against income we receive from that equipment or when we dispose of the equipment. Furthermore, depreciation deductions may not be available under total lease return swaps, participation
agreements and other transactions in which we invest. Depending on the equipment that we acquire and its eligibility for accelerated depreciation under the Code, we may have less depreciation deductions to offset gross lease revenue, thereby
increasing our taxable income.
Your ability to deduct our losses will be limited.
In general, the amount that you have at risk with respect to our shares is deemed to be the amount of your investment, plus any profit
allocations and minus any loss allocation and distributions. The amount that you have at risk will limit your ability to deduct our losses. A tax rule further limits your ability to deduct losses from an
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activity to the amount at risk in that activity and treats equipment placed in service in separate years as separate activities. Because our operations will constitute passive activities, you
will also be restricted to using our losses to offset passive income in calculating tax liability. Furthermore, passive losses may not be used to offset portfolio income. See "Federal Income Tax Consequences–Limitation on Deduction of
Losses."
The IRS may allocate more taxable income to you than our operating agreement provides.
The IRS might successfully challenge our allocations of profits or losses. If so, the IRS would require reallocation of our taxable income
and loss, resulting in more taxable income or less loss for you than our operating agreement would otherwise allocate. See "Federal Income Tax Consequences–Allocations of Profits and Losses."
If you are a tax-exempt organization, you will have unrelated business taxable income from this investment.
Tax-exempt organizations are subject to income tax on unrelated business taxable income, or UBTI, and are required to file federal income
tax returns if they have UBTI from all sources in excess of $1,000 per year, less directly connected allowable deductions. Our leasing income will constitute UBTI. Furthermore, a charitable remainder trust that recognizes UBTI will be subject to an
excise tax equal to 100% of that income. All tax-exempt entities are urged to obtain the advice of a qualified tax advisor on the effect of an investment in our shares. See "Federal Income Tax Consequences–Investment by Employee Benefit
Plans and Other Tax-Exempt Organizations."
Ownership of our shares may cause you to pay alternative minimum tax.
With limited exceptions, taxpayers must pay an alternative minimum tax if it exceeds the taxpayer's regular
federal income tax for the year. As you will be allocated a proportionate share of our tax preference items, you may be required to pay alternative minimum tax. The principal partnership tax items that may have an impact on your alternative minimum
tax as a result of investing in us are (1) cost recovery deductions on the portion of our equipment leased to others under operating leases, and (2) deductions relating to our interest expense on borrowings. See "Federal Income Tax
Consequences–Alternative Minimum Tax."
You may incur state tax and foreign tax liabilities and have an obligation to file
state or foreign tax returns.
Prospective investors should consider applicable state and local taxes which may be
imposed by various jurisdictions. Investors may be subject to state tax rules which are less favorable than federal tax rules. Investors should consult their own tax advisors to fully determine the impact to them of U.S. federal, state and local
income tax laws, including laws requiring withholding on our income and/or distributions. See "Federal Income Tax Consequences–State and Local Taxes."
Some of the distributions on our shares will be a return of capital, in whole or in part, which will complicate your tax reporting and could cause unexpected tax consequences at liquidation.
As the value of our portfolio decreases over the term of our existence, a portion of each distribution will be
considered a return of capital, rather than income. Therefore, the dollar amount of each distribution should not be considered as necessarily being all income to you. The Schedule K-1 statement you receive from us each year will specify the amounts
of capital and income you received throughout the prior year. Further, your capital in our shares is reduced for tax purposes over the life of your investment, and you will not receive a lump sum distribution upon liquidation that equals the
purchase price you paid for our shares. Payments made upon our liquidation will be taxable to the extent that those payments are not a return of capital.
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Challenges by domestic and international taxation authorities could result in additional taxes and
further examination.
We will be subject to income taxes and other taxes in both the U.S. and the foreign jurisdictions
in which we operate. We are also subject to review and audit by both domestic and foreign taxation authorities. The determination of our worldwide provision for income and other taxes and current and deferred tax assets and liabilities requires
judgment and estimation. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
An adjustment to our tax return as the result of an audit could result in an examination of other items in your returns unrelated to us, or an examination of your tax returns for prior years. You could
incur substantial legal and accounting costs in contesting any challenge by the IRS or any foreign jurisdiction, regardless of the outcome. Further, because you will be treated for federal income tax purposes as a partner in a partnership by
investing in our shares, an audit of our tax return could potentially lead to an audit of your individual tax return.
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MANAGEMENT COMPENSATION
The following tables summarize the types and estimates of all compensation, fees, profits and other payments that our manager and its
affiliates, including the dealer manager, may earn or receive, directly or indirectly, in connection with the offering of the shares or our operations. The compensation of our manager and its affiliates, including the dealer manager, was not
determined by arm's-length negotiation, but is consistent with the guidelines set forth in the NASAA Guidelines. Our operating agreement does not permit the manager to receive more than the maximum fees or expenses stated for each type of
compensation by reclassifying those items under a different category.
Offering Compensation
The following table sets forth compensation payable by us in connection with the sale of our shares. Our total organization and offering
expenses, which includes the dealer manager fee, the selling commissions, due diligence expenses and the O&O expense allowance, is anticipated to be 11.79% of our gross offering proceeds assuming we raise our maximum offering amount, but in any
event will not exceed 15.0% of our gross offering proceeds. Footnotes are contained under the table in "–Operating Compensation."
Entity Receiving
Compensation and Period
Compensation Payable
Type and Method of Compensation
Estimated
(1)
Selling Commissions
–payable to the dealer manager and selling dealers during the offering period.
7.0% of the offering proceeds from each share sold by the dealer manager or selling dealers. We do not expect the dealer manager to
sell any of the shares offered.
We will not pay selling commissions for
shares sold:
•      to investors whose broker-dealer waives the selling commission in whole
or in part;
•      to investors by registered investment advisors affiliated with a
selling dealer who do not charge a commission in connection with an investment in the shares;
•      to our manager or its affiliates;
•      to
selling dealers participating in this offering or any of their affiliates purchasing for their own account or their IRAs or qualified plans; or
•      pursuant to the DRP.
•      Selling dealers may provide a volume discount to investors who purchase
a large number of shares, which will reduce the selling commissions paid by us. See "Plan of Distribution."
The total amount of selling commissions cannot be determined because it is based on the number of shares sold. If the minimum amount of $1,200,000 is raised, the total amount of
selling commissions will be up to $84,000. If the maximum number of 20,000,000 shares is sold, the total amount of selling commissions will be up to $14,000,000.
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Entity Receiving
Compensation and Period
Compensation Payable
Type and Method of Compensation
Estimated
(1)
Due Diligence Expense
Reimbursement
(2)
–payable to the selling dealers
or the dealer manager during the offering period.
We will reimburse the dealer manager and selling dealers for detailed and itemized bona fide accountable due diligence expenses. Bona fide accountable due diligence expenses will be
reimbursable only to the extent that they are presented in an itemized statement to the dealer manager, or to us in the case of the dealer manager's expenses.
The total amount of due diligence expense reimbursement cannot be determined because it is based on the amount of detailed and itemized bona fide accountable due diligence expenses
actually incurred by the dealer manager and selling dealers.
Those expenses may only include actual costs, including overhead, associated with the dealer manager's or selling dealers' due
diligence activities and may not include a profit margin.
We estimate
that bona fide, detailed and itemized accountable due diligence expenses will be approximately 0.07% of the gross proceeds of the offering. However, we may reimburse higher amounts of bona fide, detailed and itemized accountable due diligence
expenses up to a maximum of 0.5% of the gross offering proceeds of the offering.
If the minimum amount of
$1,200,000 is raised, we estimate that the total amount of detailed and itemized due diligence expense reimbursement will be $840. If the maximum number
of 20,000,000 shares is sold, we estimate that the total amount of due diligence expense reimbursement will be $140,000.
Dealer Manager Fees
–payable to the dealer manager during the offering period
3.0% of the offering proceeds from each share sold, including shares sold to our manager or its affiliates.
We will not pay the dealer manager fee for shares sold pursuant to the
DRP.
The total amount of dealer manager fees cannot be determined because it is based on the number of shares sold. If the minimum amount of $1,200,000 is raised, the total amount of
dealer manager fees will be $36,000. If the maximum number of 20,000,000 shares is sold, the total amount of dealer manager fees will be $6,000,000.
O&O expense allowance
–payable to our manager during the offering period.
We will pay our manager an allowance for our organization and offering expenses. The amount of our manager's O&O expense
allowance is based upon the number of shares that are sold, including shares sold to our manager or its affiliates, as follows:
•      up to 2.40% of the offering proceeds from each share sold for the first
3,500,000 shares;
The total amount of O&O expense allowance cannot be determined because it is based on the number of shares sold and the total amount of organization and offering expenses
incurred by our manager. If the minimum amount of $1,200,000 is raised, the total amount of O&O expense allowance will be $28,800. If the maximum number of 20,000,000 shares is sold, the total amount of O&O expense allowance will be
$3,860,000.
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Entity Receiving
Compensation and Period
Compensation Payable
Type and Method of Compensation
Estimated
(1)
•      up to 2.00% of the offering proceeds from each
share sold for shares sold that exceed 3,500,000 but amount to 10,000,000 or fewer shares; and
•      up to 1.72% of the offering proceeds from each share sold for shares
sold that exceed 10,000,000 shares.
Our O&O expense allowance will not
exceed the actual fees and expenses incurred by our manager or its affiliates in connection with our organization and this offering.
Operating Compensation
The following table sets forth compensation payable by us in connection with our investing activities, including during the offering
period, operating period and liquidation period.
Entity Receiving
Compensation and Period
Compensation is Payable
Method of Compensation
Estimated Dollar Amount of
Compensation
(1)
Acquisition Fees
(2)
– payable to our manager, its affiliates and third-parties during the offering period and operating period.
3.0% of the purchase price that we pay for each item of equipment or direct or indirect interest in equipment we acquire, including
under lease agreements, trading transactions, residual value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options, joint ventures and special purpose vehicles and companies. The
purchase price includes the indebtedness incurred to finance the acquisition of equipment, an interest in equipment, such as a residual interest or a joint venture interest, or an option to acquire a residual value interest in equipment assuming
that the option was concurrently exercised.
If we pay acquisition fees to
third parties, that amount will be deducted from acquisition fees otherwise payable to our manager and its affiliates. Our manager will reduce or refund acquisition fees if our investment in equipment is less than the greater of (a) 80.0% of the
gross offering proceeds reduced by 0.0625% for each 1.0% of borrowings encumbering our equipment, or (b) 75.0% of the gross offering proceeds.
If the minimum amount of $1,200,000 is raised, the total amount of acquisition fees attributable to the initial investment of offering
proceeds will be $30,743. If the maximum number of 20,000,000 shares is sold, the total amount of acquisition fees attributable to the initial investment of offering proceeds will be $5,123,777.
In calculating the estimates of acquisition fees, we have assumed that, on average,
the total indebtedness encumbering our portfolio will equal 40.0% of the total purchase price for the equipment, and that the amount available for investment in equipment, to pay acquisition fees and to create reserves, after paying total public
offering and organization expenses, will be approximately 88.0% of gross offering proceeds. We do not anticipate that the level of debt across our portfolio at any one time will exceed 40.0% of the total purchase price of all equipment in our
portfolio, and once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio.
We may also pay acquisition fees arising out of reinvestment of proceeds received from equipment sales during the offering and operating periods, up to
the limits set forth in our operating agreement.
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Entity Receiving
Compensation and Period
Compensation is Payable
Method of Compensation
Estimated Dollar Amount of
Compensation
(1)
Asset Management Fees
–payable to our manager during the offering period, operating period and liquidation period.
We will pay our manager for actively managing the leasing of our equipment in the amount equal to the lesser of:
(i)(a) 5.0% of gross rental payments from non full payout leases
(3)
except non-full payout leases for which management services are
performed by non-affiliates under the manager's supervision for which 1.0% of annual gross rental payments will be payable; (b) 2.0% of gross rental payments from full payout leases
(3)
with net lease provisions; and (c) 7.0% of gross rental payments from equipment operated on our behalf by our
manager's personnel; and
(ii) management fees which are competitive
and/or customarily charged by others rendering similar services as an on going public activity in the same geographic location for similar equipment transactions.
The asset management fees continue to be payable to our manager during any extension of a term of a lease or when a new lease is entered into with the
same client or its affiliates or a different client.
The amount of asset management fees will depend upon the rental payments generated by our equipment. Since the composition and size of the equipment we will own will primarily be a
function of the amount of gross offering proceeds raised and the amount of indebtedness incurred in connection with equipment acquisitions, the total amount of asset management fees is not determinable at this time.
Re-Leasing Fees
–payable to our manager and its affiliates during the offering period and operating period
(4)
We may pay re-leasing fees to our manager for re-leasing equipment that we own. The re-leasing fees will not exceed the lesser
of:
(i) 2.0% of gross rental payments derived from the re-lease of
equipment; and
(ii) the competitive rate charged by others rendering
comparable services for similar equipment transactions.
The amount of re-leasing fees will depend upon the rental payments generated from equipment that is re-leased after lease expiration. The rental amounts for which equipment can be
re-leased in the future is presently unknown, as is the size and composition of the equipment that may be re-leased. For these reasons, the total amount of re-leasing fees is not determinable at this time
Re-leasing fees will be paid as each rental payment is received over the term of the lease.
The re-leasing fee is only payable if:
(i) the equipment is not re-leased to the same client or its affiliates;
(ii) our manager has provided substantial re-leasing services in connection with the
re-lease; and
(iii) our manager also performs equipment management services that entitle it to asset management fees.
We will not pay our manager a re-leasing fee if the manager receives a 7.0% asset
management fee.
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Entity Receiving
Compensation and Period
Compensation is Payable
Method of Compensation
Estimated Dollar Amount of
Compensation
(1)
Re-Marketing Fees
–payable to our manager and its affiliates during the offering, operating and liquidation periods, subordinate to investor return.
We may pay our manager re-marketing fees for the resale of our equipment equal to the lesser of:
(i) 3.0% of the purchase price paid to us by the purchaser for each item of equipment
or direct or indirect interest in equipment acquired from us, including under lease agreements, trading transactions, residual value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase
options, joint ventures and special purpose vehicle and companies. The purchase price includes indebtedness incurred, assumed or associated with the sale of the equipment or interest in the equipment, such as a residual interest or a joint venture
interest, and in the case of equipment purchase options to acquire residual value interests, debt which would be assumed so long as the options can be immediately exercised; and;
The amount of re-marketing fees will depend upon the amount of proceeds received from equipment sales. The price at which equipment can be sold in the future is presently unknown,
as is the size and composition of the equipment that may be sold. For these reasons, the amount of re-marketing fees is not determinable at this time.
(ii) One-half of reasonable, customary and competitive brokerage fees paid for services rendered in connection with the sale of
equipment of similar size, type and location.
Our payment of re-marketing
fees to our manager is subordinate to a pre-tax 8.0% per annum internal rate of return compounded daily on all capital contributed to us, calculated on the date of distribution and taking into account all capital contributions and all distributions,
which we refer to as "investor return." Investor return includes a return equal to all capital contributions we have received from you. If the manager participates with an independent broker on the resale of our equipment, the
aforementioned subordination will only apply to that part of the commission payable to our manager.
Any re-marketing fees that are not paid to our manager or its affiliates when earned because investor return has not yet been achieved will be deferred, without interest, and paid to them after investor
return is achieved.
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Entity Receiving
Compensation and Period
Compensation is Payable
Method of Compensation
Estimated Dollar Amount of
Compensation
(1)
Outperformance Fee and Distributions of Cash
–payable to our manager during the offering period, operating period and liquidation period, with a percentage subordinate to
investor return.
Prior to the time that investor return is achieved, distributions will be made 99.0% to our members and 1.0% to our manager.
After the time that investor return is achieved, distributions will be made to 81.0%
our members and 19.0% to our manager. We refer to the increased percentage of distributions payable to our manager as the "outperformance fee."
The outperformance fee will depend upon the extent to which equipment rental payments and sales proceeds exceed our expenses, including any indebtedness obligations, as well as
whether investor return has been achieved. Therefore, the outperformance fee is not determinable at this time.
Reimbursement of Operating Expenses and Acquisition Expenses
–payable to our manager, its affiliates and third parties during the offering period, operating period and
liquidation period.
We will pay third parties directly, and reimburse our manager and its affiliates for amounts paid on our behalf, for operating expenses
and acquisition expenses.
Operating expenses include the actual cost of
goods and materials obtained from unaffiliated third parties, and also include reimbursement to our manager and its affiliates for administrative services reasonably necessary or advisable in its discretion to our prudent operation, for example,
legal, accounting and audit fees, printing costs, filing and qualification fees, certain costs of our manager in our ongoing operations and similar fees and expenses. The reimbursement of operating expenses may not exceed the lesser of:
•     the
actual cost of the services; or
•     the amount we would be required to pay to independent parties for comparable
services
Acquisition expenses are those expenses related to the selection,
acquisition and documentation of investments in equipment and include legal fees and expenses; travel and communications expenses; costs of credit reports, appraisals, valuations, inspections, searches and reference materials used to evaluate
transactions; non-refundable option payments on equipment and other personal property; administrative and clerical expenses; accounting, tax and auditing fees and expenses; and miscellaneous other expenses.
The amount of expenses reimbursed will depend upon the scope of services the manager provides to us. Reimbursement amounts for the entirety of our operations are not determinable at
this
time.
(6)
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Entity Receiving
Compensation and Period
Compensation is Payable
Method of Compensation
Estimated Dollar Amount of
Compensation
(1)
No reimbursement is permitted for services for which the manager or its affiliates is entitled to compensation by way of a separate fee, including the O&O expense allowance.
We may not reimburse the manager or its affiliates for salaries, fringe benefits, travel expenses or other administrative items incurred by or allocated to any controlling person of the manager or expenses for rent, depreciation and utilities or for
capital equipment.
(5)
(1)
Unless otherwise stated, excludes shares sold under our DRP.
(2)
Total acquisition fees paid from all sources is limited to the difference between the maximum front-end fees (explained below) and all other front-end fees (the selling
commissions, dealer manager fees, due diligence expense reimbursements and O&O expense allowance). Pursuant to our operating agreement, the maximum front-end fees that we may pay may not cause our direct or indirect investment in equipment to be
less than the greater of: (i) 80.0% of the gross offering proceeds, reduced by .0625% for each 1.0% of indebtedness encumbering our investment, or (ii) 75.0% of the gross offering proceeds. For example, if we incur 65.0% indebtedness on
our portfolio, we must directly or indirectly invest at least 75.9375% of our gross offering proceeds in equipment. Assuming that we sell all 20,000,000 shares in this offering and assuming our anticipated portfolio leverage of 40%, we estimate that
our total front-end fees will constitute approximately 14.35% of the gross offering proceeds, including estimated total acquisition fees attributable to offering proceeds. See "Estimated Use of Proceeds."
(3)
See "Glossary" for the definition of "full payout leases" and "non-full payout leases."
(4)
If the manager provides both equipment management and additional services relating to the continued and active operation of our equipment, such as ongoing marketing and
re-leasing of equipment, hiring or arranging for the hiring of crews or operating personnel for our equipment and similar services, the manager may charge us a management fee not to exceed 7.0% of the gross rental payments from equipment operated by
us. If the manager receives an asset management fee of 7.0% pursuant to this provision, the manager will not be entitled to the 2.0% re-leasing fee.
(5)
Controlling persons include the chairmen, directors, presidents, or other executive or senior officers of our manager or its affiliates, any holder of a 5% or larger
equity interest in our manager or its affiliates, or any person having the power to direct or cause the direction of our manager or its affiliates, whether through the ownership of voting securities, by contract or otherwise.
(6)
The following table sets forth our estimate of the total amount of expenses that we will reimburse our manager for administrative services provided during our first
full year of operations and assumes that we sell the maximum number of shares.
Administrative Expense Reimbursements
$
General Administrative
$
Total:
$
The administrative expenses include
costs incurred by our manager and its affiliates that are necessary to our operations. General administrative expenses include audit, legal and tax expenses incurred by our manager and its affiliates.
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INVESTMENT OBJECTIVES AND POLICIES
Principal Investment Objectives
Our principal investment objectives are to:
•
Preserve, protect and return your invested capital
. We intend to build a portfolio of equipment, equipment leases and other equipment related
investments with the objective of preserving, protecting and returning your invested capital.
•
Generate regular monthly cash distributions
. We will develop a portfolio of varied equipment types, transaction types, clients and transaction
durations with the objective of receiving regular cash from our investments. We intend to generate cash through rental payments from our clients, from the sale of equipment, from the sale of leases and from other investments. In turn, we intend to
make regular monthly cash distributions beginning the month after the initial closing date of this offering and up to the end of our operating period.
•
Reduce our overall risk through diversification of our portfolio.
We intend to diversify our portfolio by acquiring, directly or indirectly,
different types of assets, by entering into or acquiring leases of different durations and by acquiring equipment and investing in other equipment related transactions in different geographies and industries. Diversification of our portfolio will
reduce our risk of changes in any particular market sector or of any particular client's willingness or ability to make payments under a lease.
•
Generate investment returns that are not correlated to returns from listed stock and bond markets
. We intend to generate investment returns for
our investors that will not be correlated to listed stock and bond markets. Our shares will not be traded on any listed exchange and the value of our shares will not be subject to fluctuations on those exchanges.
•
Generate a favorable total return on your investment
. Our portfolio will be structured with the objective of providing our investors with a
favorable total return on their investment.
To achieve our investment objectives, we will acquire, directly
or indirectly, equipment that is leased to third parties. We may also invest in other types of transactions which will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. Those transactions may
include equipment trading transactions, residual value guarantees, forward purchase agreements, investments in companies which lease equipment, total lease return swaps, participation agreements, equipment purchase options and other transactions
involving equipment. We will not enter into stock, bond or other exchange traded derivative contracts. See "Investment Objectives and Policies–Types of Transactions and Transaction Strategies." Equipment leases and other equipment
related investments are likely to be located in, or subject to the laws of, the U.S., but may also be located elsewhere.
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Equipment Considerations
Equipment Categories
We may acquire, directly or indirectly, a variety of different types of equipment, including transportation, construction, mining, manufacturing, utilities and technological equipment. Examples of the
types of equipment that we may acquire include the following:
Equipment Category
Example Equipment
Transportation Equipment
Aeronautical
Aircraft engines (jet or turbo-prop), aircraft and engine parts, machinery and tooling, commercial aircraft, private aircraft, police or military aircraft, aircraft simulators,
aircraft manufacturing equipment, ground handling equipment.
Maritime
Containerships, bulkers, barges, tankers, tugs, anchor handling, crew transport, rigs, passenger transport, cruise ships, sub-sea ships, off-shore supply vessels, gas carriers,
floating production storage and offloading vessels, maritime engines, shipping containers, spare parts, loading and handling equipment.
Rail
Locomotives, passenger cars, freight cars, trams, signaling equipment, spare parts, rail construction, maintenance equipment.
Road Transportation
Buses, coaches, trucks, road containers, armored cars, taxis, passenger vehicles, trailers, forklifts, tractors, emergency service vehicles.
Construction, Mining and Manufacturing
Construction
Cranes, bulldozers, earthmoving equipment, backhoes, compressors, excavators, lifting equipment, front-end loaders, cement spreaders, transportable buildings, rollers and
compactors, concrete equipment, rock breakers.
Mining
Dozers, graders, loaders, conveyers/elevators, boring and drilling equipment, crushing and screening equipment, draglines, haul trucks, pumps, sheds, transportable buildings,
trenchers.
Manufacturing
Machine tools, computer and mechanically controlled lathes, materials handling equipment, drill presses, milling machines, grinders, metal fabrication equipment, general plant,
robotics, molding equipment, process controllers, materials handling equipment, tanks and vessels, inspection tools and instruments, heating and cooling equipment and cutting and forming tools.
Utilities
Utilities Equipment
Smart and conventional gas, electricity and water meters, power generators, turbines, wind farms, solar panels, gas and water leak detection equipment, boilers, heat exchangers
and control systems.
Technological
Semiconductor
Wafer fabrication equipment including deposition, diffusion, etch, implant, lithography and metrology tools. Automated test equipment including testers, handlers and probers.
Printed circuit board assembly equipment including placement systems, glue dispensers, screen printers, optical inspection, x-ray inspection, cleaners and ovens. Solar cell and solar panel manufacturing equipment including wet chemistry,
texture/clean, deposition, furnaces, screen printers, handling, conveyors, measurement and inspection tools. Flat panel display manufacturing equipment.
Information Technology
Desktop computers, laptops, notebooks, servers, data centers, routers, firewalls, printers, fax machines, scanners, multi-function devices and photocopying
equipment.
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Equipment Category
Example Equipment
Telecommunications
Commercial mobile telephony equipment, antennae and base stations, emergency services telecommunications, radio masts and towers, telephone systems, hubs, modems, gateways,
switches, fixed line systems, communications servers.
Scientific and Medical
Medical and dental diagnostic and testing equipment including MRI, X-ray, ultrasound, cardiology, radiology, patient monitoring equipment, analyzers, laboratory test equipment
and other equipment used in hospitals, clinics and medical laboratories.
Other Technological
Automatic teller machines, point of sale devices, customer self-serve kiosks, cinema equipment, broadcasting equipment, outside broadcast vans, television set-top-boxes,
fiber-optic cable, navigation systems, graphic processing equipment, air conditioning, CAD equipment and gaming machines.
Other
Other Equipment
Other equipment that our manager determines may meet our investment objectives, including but not limited to furniture and fixtures, advertising billboards and intangible costs
associated with equipment, such as installation, warranty, transportation and software costs.
Equipment Investment
Considerations
Our manager may consider a range of factors when reviewing potential investments in equipment,
including:
•
Remaining economic useful life
. The remaining economic useful life of an item of equipment will be taken into account in determining the
appropriate residual value investment in, and lease duration for, that equipment. For example, a new laptop computer may have three years of economic useful life remaining whereas a 10 year old rail box-car may have more than 30 years of economic
useful life remaining. We will make investments where we believe that the individual item of equipment has sufficient economic useful life remaining for us to make an appropriate return on our residual value investment.
•
Anticipated residual value
. In determining the size of a residual value investment, it will be necessary to form an opinion as to:
•
the likely resale value of the equipment at the time in the future when the equipment is likely to be sold; and
•
any other revenue sources the equipment may generate at the end of the initial lease term, such as through re-leasing or an extension of the lease
term.
•
Whether the equipment is new or used and the condition of the equipment
. New equipment is more likely to be covered by a manufacturer warranty
and may be more suited to the needs of our clients. Used equipment may be advantageous to purchase from a pricing or availability perspective. When considering investments in used equipment, we will take into account the condition of the equipment
plus any available inspection reports and maintenance and repair schedules. If we are considering an investment in used equipment which is accompanied by an existing lease, we may also consider the lessee's history of compliance with its
obligations under that lease.
•
Equipment registration and regulatory considerations.
Certain types of equipment, including aircraft and marine vessels, may be subject to
equipment specific registration requirements, export restrictions and other regulations. We will take these registration and regulatory requirements into account when considering investments in those items of equipment.
•
Portfolio diversification
. We will look more favorably upon equipment and equipment related investments that add diversification to our existing
portfolio.
•
Client considerations
. We may consider how the equipment will hold its value for collateral purposes in conjunction with any consideration of
the payment risks associated with the proposed client. We may also review any available financial information about the client. See "–Types of Clients and Client Considerations."
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•
How essential the equipment is to the operations of the client
. We will look more favorably upon investments in equipment or equipment related
transactions that are essential to the operations of the underlying client, as there is a greater likelihood that a client will continue to meet lease obligations for equipment that is vital to its business operations.
•
Cash flow profile of the equipment
. We will take into account the timing of the receipt of cash flows generated by equipment or equipment
related transactions when determining a rental payment profile for that equipment or transaction. This in turn will influence the ongoing regular cash distributions we intend to pay to you and our other investors.
•
The depth of the equipment market and exit mechanisms
. We will look more favorably upon potential direct or indirect investments in equipment
for which a deep and well-established secondary market exists, or where some other investment exit mechanism is likely to exist.
•
The applicability and potential impact of environmental laws
. Some types of equipment, such as transportation assets which are designed to carry
hazardous materials, have greater potential to be involved in the discharging of pollutants into the environment. This may expose us as the owner of the equipment to penalties under law and environmental tort liability, which could impact our
returns in a materially negative way. We will look more favorably upon investments where these environmental risks are either comparatively smaller, primarily borne by persons other than us or where the environmental risks are insurable.
Types of Transactions and Transaction Strategies
Lease Transactions
General Definition
At its most basic, a lease is an arrangement by which one person,
the lessor
, provides possession and use of an asset for a fixed term to another person,
the lessee
, in return for
compensation known as
rent
.
There are different methods for defining a "lease" depending upon whether it is
being defined for accounting purposes, tax purposes, legal purposes, Uniform Commercial Code purposes, bankruptcy purposes, regulatory purposes or commercial purposes. A common theme among these definitions, however, is that the lessor retains at
least some of the risks and rewards of ownership of the leased assets. The degree of risk retained by the lessor depends upon the type of lease agreement and the provisions of individual lease contracts.
General Terminology
Leases may sometimes also be referred to as
rental agreements, hire agreements, hire purchase agreements, bailment for hires
,
usage
and
pay per use agreements
. Leases are between a
lessor, who owns or has some other right to an asset, and a lessee, who is granted the possession and right to use the asset by the lessor. The lessor may also be referred to as the
owner
. The lessee may be referred to as the
hirer, renter
or
user
. In this prospectus, we refer to our lessees as our
clients.
Rentals may also be known as
lease payments, hire payments
or
usage payments
.
The terms "present value" or "net present value" are often used in connection with leases. Present value is the
current value of one or more payments to be made in the future. It is based on the concept that an amount today is worth more than the same amount in the future; for example, $100 was more valuable in 1990 than $100 is today. There are various
methodologies and assumptions used when calculating the present value of the future cash flows.
There are two common forms of
leases:
non-full payout leases
and
full payout leases
. Other types of lease arrangements include
sale and leasebacks, pay per use
and
full service leases
.
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Non-Full Payout Leases
A non-full payout lease, also known as an operating lease or a rental agreement, is one where, in present value terms, the sum of the
rentals paid by the lessee over the lease term is less than the original purchase price paid by the lessor for the leased equipment. The difference between the original purchase price of the equipment and the sum of the rentals, in present value
terms, is known as the lessor's "residual value" investment in the equipment.
The lessor under non-full payout
leases cannot typically require the lessee to purchase the leased equipment at the end of the lease. Normally:
•
the lessee has no right or option to purchase the equipment at the end of the lease; or
•
the lessee does have a right or option to purchase the leased equipment at the end of the lease, but only where the purchase price payable by the
lessee is not fixed up-front. Instead, the purchase price is the fair market value of the equipment at the end of the lease term.
It is not uncommon at the end of a non-full payout lease for the leased equipment to be returned to the lessor.
Lessors enter into non-full payout leases with the expectation that they will make a satisfactory return on their residual value investment. Returns on residual value investments can be achieved by:
•
re-leasing the equipment at the end of the initial lease term to the same or a different lessee; or
•
selling the equipment at the end of the lease term to the lessee or another party.
Full Payout Leases
A full payout lease, also known as a finance lease, is one where the rentals paid by the lessee, plus any other fixed payments the lessee is obliged to make under the lease, compensate the lessor in full
for the purchase price paid by the lessor for the equipment at the outset of the lease, plus a satisfactory return.
Usually
under a full payout lease, the lessee becomes the owner of the leased equipment at the end of the lease and the equipment is not returned to the lessor. Lessors enter into full payout leases primarily to earn interest income which forms part of the
rental payments made by the lessee.
Sale and Leaseback
A sale and leaseback is one where the lessee of the equipment is the same party that initially sells the equipment to the lessor. The
lease commences at the same time that the equipment is sold to the lessee. The "leaseback" may take the form of either a non-full payout lease or a full payout lease. Businesses may enter into sale and leaseback transactions to achieve
desired balance sheet outcomes, for liquidity purposes, for asset management purposes or for a variety of other reasons.
Pay per Use Agreements
Pay per use agreements are typically a type of non-full payout lease. Under a pay per use agreement, the regular rental payments due from the lessee are not fixed or determined solely by reference to an
underlying interest rate. Instead, the amount the lessee pays for the use of the equipment is based upon their actual usage of the equipment. Under these agreements, a lessee will typically pay more for the equipment the more often it uses\ the
equipment. Pay per use arrangements may differ depending upon the type of equipment being used.
Examples of pay per use
agreements may include a payment per copy for photocopiers, payments based upon running time for aircraft engines or a payment per item produced for manufacturing equipment.
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Full Service Leases
A full service lease is typically a type of non-full payout lease. Under a full service lease, the lessor may assume certain obligations
or provide certain services associated with the underlying equipment. This may include the obligation to maintain, insure or operate the equipment.
Non-Lease Transactions
Non-lease, equipment related transactions
are those which will allow us to directly or indirectly participate in the benefits and risks of equipment ownership or usage. We will typically enter into non-lease transactions as a mechanism for making direct or indirect investments in equipment
rather than as a mechanism for transferring risk to other parties.
We will not enter into stock, bond or other exchange
traded derivative contracts.
The risks we accept in the value of equipment under non-lease transactions will be comparable to
the risks we accept in the variable residual value of equipment under ordinary non-full payout leases. As with lease transactions, we will rely upon the equipment leasing and equipment valuation expertise of our manager, our manager's
affiliates and other third party experts when assessing non-lease equipment related transactions. See "The Macquarie Group" and "Management."
Examples of non-lease, equipment related transactions are described below.
Trading Transactions
Trading transactions involve buying an item of equipment with the expectation of re-selling that equipment for a profit. There is no lease associated with a trading transaction. A committed purchaser of
the equipment may or may not have been identified at the time the equipment is initially purchased.
Residual Value
Guarantees and Forward Purchase Agreements
Forward purchase agreements are agreements whereby one party, referred to as
the
purchaser
, is committed to purchasing an item of equipment in the future for a pre-determined price. The seller of the equipment is typically another lessor and the equipment is usually subject to a lease. The date for the future purchase
of the equipment is generally the date the underlying lease ends. A residual value guarantee is a guarantee to make payment of any shortfall between a pre-agreed amount, being the residual value, and the actual sales proceeds from the sale of
equipment at the end of the lease.
Total Lease Return Swaps, Participation Agreements and Other Transactions
A total lease return swap is an agreement between two parties in which one party makes set payments, typically an amount
equal to the purchase price of an item of equipment and other costs associated with owning it, while the other party makes payments based on the return of the underlying equipment, which includes both the rental income it generates and any capital
gains. Total lease return swaps allow the party receiving the total return to gain exposure and benefit from the underlying equipment without actually having to own it. In effect, a total lease return swap is a transaction which mirrors the
cashflows from an underlying lease agreement without requiring direct ownership of the underlying equipment.
A participation
agreement may take the form of a total lease return swap, with the exception that it relates only to part of the underlying equipment and only part of the cashflows generated by it. Participation agreements may be used for example as we gradually
pay down investments which have been warehoused on our behalf, or where we do not wish to invest an amount equal to the full purchase price of the equipment. See "–Warehousing of Transactions by our Manager or our Manager's
Affiliates."
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As an investor will not typically have a direct ownership interest in equipment underlying
total lease return swaps, participation agreements and other similar transactions, tax depreciation deductions are generally not available to members from this type of investment. These transactions can effectively enable participation in the cash
flows from the underlying equipment lease and may also provide for partial participation in a transaction, or for the gradual increase in the size of an investment in equipment as more funds become available.
Equipment Purchase Options
An equipment purchase option is a transaction where the option holder has the right, but not the obligation, to purchase equipment in the future, usually for a fixed price. The option holder will normally
exercise the option if it believes that the market value of the equipment is sufficiently greater than the option price so as to provide the option-holder with a satisfactory return. We may either purchase options for equipment held by others, or
grant options for equipment that we hold.
Joint Ventures and Special Purpose Vehicles
A joint venture is a contractual arrangement between two or more parties, formed for the purpose of executing a particular business
undertaking. A joint venture may be formed to make a direct or indirect investment in equipment. Joint ventures may be formed:
•
where the joint venture partners bring different expertise to the transaction;
•
to diversify risk; or
•
where the investment size is too large for a single party to make.
In equipment financing terms, special purpose vehicles are corporations, or some other form of business entity, formed to hold
investments in specific equipment and achieve particular legal or economic outcomes.
Company Ownership
Certain companies, including leasing or hire companies, hold a significant portion of their assets directly in equipment. Ownership
interests in those companies can provide indirect exposure to certain categories of equipment or portfolios of equipment. Tax depreciation deductions are generally not available for this type of investment.
Transaction Strategies
We intend to hold the majority of our portfolio through non-full payout leases; however, we may invest in any type of direct or indirect lease or non-lease transaction. We believe investments in leases
and equipment related non-lease transactions, such as trading transactions, residual value guarantees, forward purchase agreements, total lease return swaps and participation agreements, are those most likely to achieve our investment objectives. We
will not enter into stock, bond or other exchange traded derivative contracts.
See "Investment Objectives and
Policies–Types of Transactions and Transaction Strategies." We will seek to sufficiently diversify the duration of our leases to achieve our investment objectives. We may also diversify the types of leases and other transactions we enter
into in the expectation of achieving our investment objectives. Once fully invested, we anticipate that at any one time we will only have a minority of our investments held in non-lease, or trading, transactions.
Given the global reach of the leasing activities conducted by the Macquarie Group, we anticipate that a significant proportion of
transactions we enter into may:
•
involve foreign clients;
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•
involve equipment located or operated in foreign locations; or
•
be subject to foreign laws.
We may enter into transactions involving foreign jurisdictions which our manager believes may assist us in achieving our investment objectives.
No member of the Macquarie Group is obligated to introduce transactions to us and there is no assurance that the Macquarie Group will
introduce transactions to us.
Lease Provisions
Each lease will contain different terms and provisions and will vary depending upon a number of factors including:
•
the type of equipment and its intended use;
•
the country in which the client or equipment is to be located;
•
whether the lease is a full payout or non-full payout lease;
•
the type of client and the likelihood or consequences of payment default by the client;
•
regulatory considerations;
•
tax, legal or accounting treatments for the lease;
•
the size of our investment in the equipment; and
•
industry norms or standards.
We anticipate that the majority of our leases will contain provisions requiring our client to:
•
pay fixed-rate rent without deduction, set-off or counterclaim;
•
maintain insurance or self-insurance over the equipment;
•
pay sales, use or similar taxes relating to the lease or other use of the equipment;
•
maintain the equipment in good working order and condition during the term of the lease;
•
indemnify us against any liability resulting from any act or omission of the client or its agents relating to the equipment; and
•
agree not to assign or sub-lease the equipment without our prior written consent.
Our leases will usually have terms ranging from two to seven years or will be held with a view to sale by us within two to seven years.
Most leases will not be cancellable during their initial terms, although some leases may provide our client with a termination right in exchange for an agreed one time payment to us. We may agree to allow cancellation of a lease that does not have a
termination right if it appears to be in our best interest if a client pays compensation to us or if a more attractive alternative exists that will enable us to achieve our investment objectives. At the end of each lease term, our client may have or
be given the right to purchase the equipment, return the equipment to us or continue leasing the equipment for an additional period. We may also sell leases, including the underlying equipment, prior to the end of the lease term.
Types of Clients and Client Considerations
It is anticipated that the majority of our clients will be corporate lessees. However, we will not be restricted in the types of clients with which we may transact. Each transaction in which we engage
will be subject to consideration of the financial performance of the ultimate client. We will seek to enter into transactions:
•
where acceptable collateral is available, including in the form of the underlying equipment;
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•
where the client risk is acceptable in the context of our overall portfolio; or
•
where our manager otherwise deems our exposure to the client to be acceptable on a risk versus reward basis.
In assessing potential clients, we may consider the following:
•
The financial performance of the client as demonstrated by financial statements, payment histories, forecasts, business plans or other documents.
•
Any collateral that may be provided in support of the transaction, including parent company guarantees, bank guarantees or other security.
•
The size of the transaction and its importance to our overall portfolio.
•
The anticipated resale value of the leased equipment.
•
The anticipated returns to be generated from the investment.
•
The duration of the transaction.
•
The country where the client or equipment will be located, including any associated political risks.
•
Our existing exposure, if any, to the client.
Borrowing Strategies and Limitations
We may use
debt, also known as leverage, when we acquire equipment. The use of those borrowings will enable us to increase the size and diversification of our portfolio. The application of leverage will reflect the appetite of the debt providers for credit
exposure to our clients and the pricing of the debt in the market. We are prohibited from obtaining permanent debt facilities from our manager or its affiliates. However, our manager or our manager's affiliates may provide us with short-term
debt facilities to facilitate our direct investment in transactions.
We anticipate that the majority of debt that we incur
will be
limited-recourse
debt. Under the typical terms of limited-recourse debt, in the event of payment default by the underlying lessee, our obligation to repay the debt will generally be limited to a set of circumstances involving our
breach of contract, our negligence, our willful misconduct and our false or misleading statements. That debt will be combined with your capital contributions to purchase specific items of equipment. In the event of a payment default by our client,
the third party debt provider will have a right of action against our client to recover outstanding payments and generally will have priority over us to any proceeds from the sale of the equipment until it has recovered the outstanding indebtedness,
as well as collection fees and costs. In that event, we may lose some or all of our investment in the equipment. It is also possible that we will enter into other forms of borrowings, such as borrowings secured across all or part of our portfolio or
borrowings which may have recourse to us.
Until we are fully invested, we anticipate that the level of debt across our
portfolio will be approximately 40.0% of the total purchase price of all equipment in our portfolio. Assuming that we receive $200,000,000 in capital contributions, this level of leverage will result an initial portfolio value of approximately
$284,650,000. We expect that leverage will be applied on an asset by asset basis across our portfolio. Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our
portfolio. Should disruptions in financial and debt markets occur, this may adversely affect our ability to source debt on attractive terms.
Warehousing of Transactions by our Manager or our Manager's Affiliates
Our manager or our manager's affiliates may "warehouse" transactions for us. "Warehousing" refers to transactions
that our manager or affiliates of our manager may enter into specifically for sale to us in the future. Warehousing transactions will be approved by our manager prior to the investment being made by our manager's affiliates on our behalf. We
would commit to our manager or manager's affiliate to purchase that transaction, and
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our manager or manager's affiliate would commit to sell that transaction to us, once we have sufficient available capital. A mechanism will be pre-agreed between us and our manager or our
manager's affiliate for determining the sale price of the investment to us. The mechanisms may include external enquiries by our manager or the exercise of business judgment by our manager on our behalf. Neither our manager nor its affiliates
guarantee the availability of any warehousing facility and any warehousing facility would be subject to the Macquarie Group's usual internal approval processes. Any equipment purchased by our manager or our manager's affiliates for sale to
us in the future will be held by our manager or our manager's affiliates on a temporary or interim basis only, generally not in excess of six months. We will only commit to purchase equipment from our manager or our manager's affiliates if
our manager believes it to be in our best interests. Warehousing facilities may also be provided to us by non-affiliates of our manager.
Warehousing of transactions by our manager or its affiliates may provide us with several key benefits, including:
•
the ability to secure equipment prior to having capital available to make the investment; and
•
quickly investing our capital into income producing assets.
Where appropriate and desirable, and where acceptable to our manager and our manager's affiliates, we will seek to have equipment warehoused on our behalf by members of the Macquarie Group. As of the
date of this prospectus, no equipment has been identified as being warehoused by our manager or our manager's affiliates on our behalf.
Co-Investments
It is not uncommon in the equipment leasing industry, particularly for larger transactions, for multiple participants to invest in the same transaction. Co-investments provide benefits which may include:
•
access to equipment and equipment related transactions that would be too large for us to enter into alone;
•
the ability to better diversify our portfolio and limit our exposure to specific clients or equipment; and
•
the ability to co-invest alongside institutional investors.
Where our manager believes it is likely to assist us in achieving our investment objectives, we may co-invest in transactions, either on a majority or minority basis, alongside:
•
third-parties;
•
our manager or our manager's affiliates, either directly or in the form of participation agreements or other arrangements; and
•
other funds managed by our manager or our manager's affiliates, including other equipment leasing programs.
We will not, however, invest in the shares or partnership interests of other equipment leasing programs. The terms of our investments
with third-parties, our manager or our manager's affiliates may differ from the investment terms of those other co-investors, provided our manager believes our investment is consistent with our investment objectives. See "Summary of Our
Operating Agreement—Management."
Transaction Review and Approvals
Investment Committee
Our manager will establish an investment committee and set standards and procedures for the review and approval of potential transactions by the investment committee. These standards and procedures may be
revised
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from time to time. The investment committee will be comprised of at least two people, each of whom are anticipated to be employees of our manager and may be officers or directors of our manager.
The investment committee will make decisions on whether we should invest in a particular transaction or not by majority vote; in the event of a stalemate, the investment proposal will be referred to the board of directors of our manager.
Any transaction which involves us entering into warehousing arrangements, participation agreements, joint ventures or debt facilities
with our manager's affiliates must be referred to the board of directors of our manager, whereupon the transaction may only be entered into by us where a majority of the directors of our manager's board of directors, including a majority
of our manager's independent directors, have approved the transaction.
Initially, the investment committee will be
comprised of Messrs. Fahy and Edghill. See "Management."
Investment Approval
The investment committee will evaluate all potential equipment acquisitions on the basis of:
•
the extent to which the transaction appears to satisfy our investment objectives, both singularly and in the context of our existing portfolio;
•
the proposed client;
•
any available collateral and the value of the underlying equipment; and
•
the type of equipment to be acquired and its condition, location and anticipated overall investment return.
Portfolio Review
Our manager intends to formally review our portfolio at least annually and more frequently if circumstances require, to determine whether individual equipment, leases or other equipment related
transactions should remain in our portfolio or if they should be sold. These reviews will take into account:
•
whether the existing portfolio is meeting our investment objectives; and
•
whether alternative transactions and equipment are readily available which, when combined with the disposal of equipment from our current portfolio and
taking into account any capital re-deployment risks, will better meet our investment objectives.
Where our
investment objectives are being met, our manager will give preference to maintaining the existing portfolio unless there are alternative investments readily available which are more suitable to better meet our investment objectives.
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ALTERNATIVE INVESTMENT STRATEGIES
Financial planners generally recommend that investors hold a diversified investment portfolio including stocks, bonds and alternative
investments. The objective of this strategy is to reduce the overall portfolio risk and volatility of an investor's wealth portfolio while achieving acceptable rates of return.
An investment in an equipment leasing program may be regarded as an alternative investment. The appropriate proportion of an
investor's wealth portfolio that should be held in alternative investments will vary from investor to investor. You should consult your independent financial advisor regarding asset allocation strategies.
As a wealth management strategy, equipment leasing programs may be appropriate for certain investors for reasons which include:
•
Portfolio diversification
. The investment may provide diversification between alternative and other forms of investments. It may also provide
diversification between your alternative investments.
•
Non-correlation
. Equipment leasing funds that are not traded on stock exchanges may exhibit little or no correlation to listed stock or bond
markets. Furthermore, factors that influence share prices may not be factors which impact the rentals or sales proceeds that are derived from leasing equipment.
•
Regular cash distributions
. Equipment leasing funds may generate regular cash distributions.
•
Potential for capital growth
. Equipment leasing funds that invest in equipment under non-full payout leases may offer the potential for the
growth of invested capital as the result of re-selling equipment at the end of the lease term for more than the remaining investment in that equipment.
•
Security in tangible and business essential assets
. Equipment leasing funds may provide ownership of, and security in, real items of business
equipment which are essential to the conduct of business.
•
Partial inflation hedge
. The residual value of some equipment may rise in conjunction with higher inflation.
•
Tax advantages
. Equipment leasing programs may provide tax benefits for some investors. See "Federal Income Tax Consequences."
We expect to exhibit some or all of the characteristics described above. Before considering any investment
in our shares, however, you should first consult with your independent financial consultant and read and understand this prospectus, including the section "Risk Factors." You must also meet the general and state specific suitability
standards as set out in this prospectus. See "Who May Invest."
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THE EQUIPMENT LEASING INDUSTRY
Both in the U.S. and abroad, the equipment leasing industry is large, segmented and highly competitive. We anticipate doing business in
the U.S. as well as in foreign jurisdictions. We will operate across a number of segments within the equipment leasing industry.
Industry
and Market Data
The industry and market data contained in this prospectus are based on independent industry publications,
reports by governmental agencies or market research firms or other published independent sources and, in each case, are believed by us to be reasonable estimates. However, industry and market data is subject to change and cannot always be verified
with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey. We have not independently verified
market and industry data from third-party sources. In addition, consumption patterns and customer preferences can and do change. As a result you should be aware that market share, ranking and other similar data set forth herein, and estimates and
beliefs based on that data, may not be verifiable or reliable. The industry and market data sources are publicly available and were not prepared for our benefit or paid for by us, nor were they paid by or prepared for the benefit of our manager or
our manager's affiliates.
Industry Participants and Segments
The equipment leasing industry and its participants may be categorized in numerous ways. These categories often overlap. Categorizations
of the equipment leasing industry and its participants include the following:
•
Lessor Affiliations.
Equipment leasing companies may be:
•
Affiliates of U.S. banks.
•
Captive lessors, meaning they only provide lease financing for one brand of equipment.
•
Independents, meaning they are not affiliates of banks and are not captives.
•
Affiliates of non-U.S. banks.
•
Equipment Segments.
Certain leasing companies may provide lease financing for specific items of equipment, whereas other lease companies may
focus on a broad range of equipment.
•
Lease Types.
Leasing companies may provide full-payout leases only, whereby they are not accepting direct residual value risk in the underlying
equipment. Other leasing companies may accept residual value risk in equipment, most typically by offering non-full payout leases.
•
Big Ticket versus Small Ticket
. Big ticket leasing companies tend to provide lease financing for high value items of equipment, such as maritime
vessels, aircraft or railcars. Small ticket leasing companies focus on providing lease financing for small value items of equipment.
•
Customer Type
. Leasing companies may provide services to a broad client base, although certain leasing companies may focus specifically on the
provision of services either to individuals, small businesses, corporations or public clients.
•
Geographical Footprint
. Leasing companies range from those with a global mandate to purely national or regional leasing companies.
We anticipate that we will be a global, big ticket leasing company with a focus on providing non-full
payout leases to mainly corporate clients across numerous equipment classes.
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Equipment Leasing Figures and Recent Industry Trends
The following figures provide an overview of features of the equipment leasing industry:
•
Annual world leasing volume is in excess of $557 billion.
(1)
•
North America comprises approximately 34.2% of annual world leasing volume, Europe 37.9% and Asia 20.2%.
(1)
•
The top 15 countries, measured by way of annual leasing volume (in parentheses), are as follows: U.S. ($174 billion), Germany ($55 billion), Japan ($53
billion), China ($41 billion), France ($32 billion), Italy ($27 billion), Brazil ($23 billion), United Kingdom ($15 billion), Canada ($13 billion), Russia ($9 billion), Sweden ($8 billion), Spain ($8 billion), the Netherlands ($8 billion), Poland
($7 billion) and South Korea ($6 billion).
(1)
•
Since 1988, the global aggregate annual leasing volume has grown from $194 billion to over $557 billion.
(1)
Recent trends in the domestic and global equipment leasing industry indicate that leasing volume is impacted by general economic
conditions. In 2007, global aggregate annual leasing volume was more than $780 billion. In December 2007, the U.S. economy entered into a recession caused in part by a deterioration of the U.S. and global credit markets. The recession was compounded
when the general unavailability of credit began to be reflected in a decrease in the global aggregate leasing volume during this period. As businesses began to react to the slowing economy, investments in new equipment also decreased. Global annual
leasing volume decreased from $780 billion in 2007 to $557 billion in 2009.
The global economy began to slowly improve during
2010 and the first half of 2011, and most economists are forecasting continued growth through the remainder of 2011 and 2012. We believe that the global equipment leasing industry will also improve as the global economy improves. Despite the
improving global economy, the credit market continues to be unfavorable with many financial institutions either ceasing or significantly reducing their financing operations. We believe that the improving economy and continued difficult global credit
markets provides us an opportunity to make favorable investments in equipment transactions which will allow us to provide attractive returns to our investors.
Competitive Conditions
Our returns will be influenced by competitive
conditions existing within the equipment leasing industry. Key competitive conditions which will influence our operations will include the following:
•
The cost of our equipment leasing services, including the rental rates we are able to provide, versus the cost of leasing services offered by our
competitors.
•
The attractiveness of lease finance to clients versus other forms of equipment finance, including debt financing and the outright purchase of
equipment.
•
General economic conditions. Generally, while weaker economic conditions may make lease financing a more attractive financing solution for clients, it
may also result in reduced overall demand for business equipment and higher lease defaults.
•
Our ability to provide associated lease services versus additional services offered by our competitors. Associated lease services may include asset
management, delivery or maintenance services.
•
The irrational behavior of other competitors. For example, other competitors may enter into unprofitable transactions for the purpose of
"buying" market share. This in turn may lower lease rates across industry segments.
•
The availability and pricing of debt.
We believe that our association with our manager and its affiliates will enable us to be a competitive participant in the equipment leasing market segments in which we will transact. See "The
Macquarie Group" and "Management."
(1)
Source: World Leasing Yearbook 2011, Euromoney Yearbooks, as of 2009.
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MANAGER'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
We are a newly formed Delaware limited liability company. As of February 28, 2011, we had $2,000 in cash and cash
equivalents from our manager's initial capital contribution. Until we receive and accept subscriptions for a minimum offering amount of $1,200,000, excluding the initial $2,000 capital contribution from our manager, we will not commence
operations. After receipt and acceptance of subscriptions for our minimum offering amount of $1,200,000, the subscription proceeds will be released to us from escrow and applied to the payment or reimbursement of our organization and offering
expenses, selling commissions, dealer manager fees and due diligence expenses, leaving estimated net proceeds of approximately $1,050,360 available for investment, operations, the creation of reserves and the payment of acquisition fees. Once we
receive the minimum subscription proceeds, we will establish working capital reserves of up to 1.0% of the gross offering proceeds. Until offering proceeds are used for the acquisition or operation of our portfolio, the offering proceeds will be
held in short-term, highly liquid investments which we believe will afford appropriate safety of principal.
After we receive
the minimum offering amount of $1,200,000 we will continue to sell our shares until the end of the offering period. As additional shares are sold, we will experience an increase in liquidity as cash is received. As we use cash to acquire equipment
or other equipment-related investments, our liquidity will decrease.
Our manager has determined that the minimum offering
amount represents a level of subscription proceeds which will enable our portfolio to be sufficiently diversified. Our maximum offering amount has been determined by our manager with reference to the subscription proceeds it believes we may be able
to raise over our offering period. The price of $10.00 per share has been determined by our manager by dividing our maximum offering amount of $200,000,000, excluding our DRP, by 20,000,000 shares, the maximum amount of shares that we are offering,
excluding our DRP.
With the net proceeds of this offering, we will primarily invest, directly or indirectly, in equipment on
lease to third parties. We may also allocate a portion of the offering proceeds to other equipment-related investment activities, including those where returns are derived from the use or trading of underlying equipment. We will acquire our
portfolio with cash and debt, and we may leverage assets after acquiring them to fund additional investments. We do not anticipate that the level of debt across our portfolio at any one time will exceed 40.0% of the total purchase price of our
portfolio. Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total purchase price of all equipment in our portfolio. We do not currently have any arrangements with, or commitments from, any lender with
respect to debt financing.
Our liquidity may be adversely affected by unanticipated or greater than anticipated operating
costs or losses, including a client's inability to make timely lease payments. We anticipate that we will fund our operations from cash flow generated by operating and financing activities. The manager has no intent to permanently fund any cash
flow deficit of ours or provide other financial assistance to us.
We intend to incur indebtedness in purchasing our
portfolio. During periods of general illiquidity in financial markets, such as existed during 2008 and 2009, it may not be possible for our manager to source debt at an appropriate interest rate, on appropriate terms or at appropriate levels. This
may mean our portfolio is sub-optimally leveraged, reducing overall returns to our investors. If debt on appropriate terms is not available to us at all, the reduced leverage of our portfolio may significantly reduce overall returns and
distributions to our members. It may also result in us not effecting attractive equipment acquisition opportunities, further reducing our overall returns. We are prohibited from obtaining permanent debt facilities from our manager or its affiliates.
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FIDUCIARY DUTIES AND CONFLICTS OF INTEREST
In General
Various
conflicts of interest will arise out of the relationship between us and our manager and its affiliates. Our manager will have sole control over our organization and operations and will resolve conflicts of interest through the exercise of its
judgment. Our manager has fiduciary obligations to us and to you in your capacity as a member that require it to take the best interests of our members into account in managing our affairs and assets. In addition, our operating agreement contains
provisions designed to guard against conflicts of interest. See "Summary of our Operating Agreement–Management." However, our operating agreement does not directly address each potential conflict and does not provide for any
particular mechanism to fully resolve these conflicts. There is a possibility that not all conflicts will be resolved in a manner favorable to us. Potential conflicts include those set forth below.
Potential Conflicts of Interest
Receipt of Fees and Other Compensation by Our Manager and its Affiliates
We will pay substantial fees to our manager and its affiliates, including the dealer manager. Further, we must reimburse our manager and its affiliates for costs incurred by them in managing us and our
portfolio of equipment, equipment leases and other equipment related investments. In addition, we intend to use leverage to acquire equipment, as it will enable us to increase the size and diversification of our portfolio. We anticipate that the
level of debt across our portfolio, once fully invested, will be approximately 40.0% of the total purchase price of all equipment in our portfolio. Once we are fully invested, the level of debt across our portfolio will not exceed 65.0% of the total
purchase price of all equipment in our portfolio. Using borrowings to increase the amount of equipment and leases we acquire will also increase our manager's acquisition and management fees, which are directly based on the total amount of our
assets. See "Management Compensation."
Subject to its fiduciary duties and the terms of our operating agreement,
our manager has sole discretion with respect to the terms and timing of our investments, although it is anticipated that those investments will be consistent with our investment objectives and policies. The agreements and arrangements, including
those relating to compensation, between us and our manager and its affiliates are not the result of arm's-length negotiations and may create conflicts between the interests of our manager and its affiliates on the one hand and us and our
members on the other. However, our manager believes that the compensation and fees provided for in our operating agreement are consistent with practices in the industry and the NASAA Guidelines in effect on the date of this prospectus.
Our Manager and its Affiliates May Compete With Us
Our manager, its affiliates and the equipment leasing program already managed by our manager will engage in equipment acquisitions, leasing transactions and other equipment-related activities on their own
behalf or on behalf of other entities. In the future, our manager or its affiliates may sponsor other equipment leasing programs and they will have legal and financial obligations with respect to those programs which are similar to our
manager's obligations to us.
Our manager will not, however, publicly offer for sale interests in more than one equipment
leasing and/or finance program simultaneously unless the programs have different investment objectives or unless the interests for sale are for specified equipment programs. Furthermore, our manager will take into account a number of factors when
allocating investment opportunities between public equipment leasing funds it manages. See " –Managing Conflicts of Interests–Allocation of Investment Opportunities."
Under the operating agreement, our manager is required to devote to our affairs only that time as is necessary for the proper performance
of its duties under the operating agreement. As a result of its investments in, and management of, other programs and the fact that they have engaged and will continue to engage in other
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business activities, our manager and its affiliates may not devote their full time to the performance of those duties. Therefore, conflicts may arise in the allocation of the time of our manager
and its affiliates between our activities and other activities in which they are involved.
Subject to its fiduciary duties
and the limitations set forth in our operating agreement, our manager or its affiliates have the right to take for their own accounts, or to recommend to any other program, any particular investment opportunity. They are under no obligation to
introduce potential investments to us. Accordingly, we might be deprived of investment opportunities. Our manager's investment committee or board of directors will resolve any conflicts in determining and allocating investments between us and
our manager, or between us and any other program managed by our manager or its affiliates. See "Investment Objectives and Policies–Transaction Review and Approvals–Investment Committee."
Related Party Transactions
Related party transactions are those where we, or our manager on our behalf, transact with companies in the Macquarie Group. Our manager and its affiliates are permitted to enter into certain transactions
and perform certain services for us. Although those transactions will be subject to the limitations set forth in this prospectus and our operating agreement, those transactions, or the potential for those transactions, could cause conflicts for our
manager with respect to performing its duties. Related party transactions will not be the result of an arm's length negotiation.
Our operating agreement permits us to invest in joint ventures with other programs that are sponsored by our manager or its affiliates and to co-invest in transactions with our manager's affiliates.
Because the co-venturers in these investments will be in different financial positions, conflicts of interest could result. See "Investment Objectives and Policies–Co-Investments." We may not have complete control over the equipment
held by joint ventures which could result in an impasse over major decisions. Even if we have the right to buy equipment from other joint venturers or co-investors, we may not have the resources do so.
Our Manager's Decisions Will Affect Our Cash Distributions and Our Manager's Compensation
Once we are fully invested, we may borrow up to 65.0% of the total purchase price of all equipment in our portfolio. Our manager's
decisions regarding leverage will affect the size of our equipment portfolio and our debt repayment obligations, which in turn will affect the net cash we receive from our equipment portfolio. Using borrowings to increase the amount of equipment and
leases we acquire will also increase our manager's acquisition and management fees, which in turn will affect cash available for distributions. See "Management Compensation."
Under our operating agreement, our manager may cause us to establish and maintain cash reserves and has the discretion as to the amount
of those reserves. Our manager may be exposed to liability to our creditors if our reserves and other sources of income are insufficient to pay our contingent liabilities. If our manager increases the amount of cash reserves, the amount of cash
available for distributions to you and our other members will decrease and our manager's exposure to our contingent liabilities will decrease, creating a conflict of interest between our members and our manager.
Our Manager or its Affiliates May Purchase Shares as an Investor
Prior to the end of the offering period, our manager or its affiliates may, but are not obliged to, purchase shares in our offering. In any event, any investment by our manager in us will not exceed 20%
of the total amount raised in our offering. If our manager or its affiliates purchase our shares, our manager or its affiliates generally will:
•
share in our income, losses and distributions on the same basis as you and our other investors as described in the "Income, Losses and
Distributions" section of this prospectus; and
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•
have the same voting rights, except that they are prohibited from voting on the removal of our manager as manager and the appointment of a successor
manager.
Any purchase of shares by our manager or its affiliates as investors will dilute the voting rights
of you and our other investors. See the "Summary of Our Operating Agreement—Meetings and Voting Rights of Our Members."
We Will Rely on the Employees of Our Manager's Affiliates
We will not have any independent employees or officers, and will rely solely on our manager to manage us and our operations. Our manager will provide us with those administrative services necessary for
our prudent operation in accordance with the terms of our operating agreement. In turn, our manager does not have any employees and will rely solely on the employees of its affiliates to conduct its operations. Those employees are not required to
spend all of their time on our manager's affairs or on affairs which affect us and in fact may devote significant time to the affairs of our manager's affiliates and will be compensated by our manager's affiliates for those services.
Those employees will also devote significant time to an equipment leasing program already managed by our manager, and may also devote significant time to equipment leasing programs our manager comes to manage in the future. The availability, or lack
thereof of these employees to provide services to our manager may create significant conflicts between us and our manager and its affiliates.
Our manager will depend on its ultimate parent company, Macquarie Group Limited, and its subsidiaries for management and administrative functions and interim financing for capital and operational
expenditures and other expenses. Macquarie Group Limited and its subsidiaries are under no obligation to pursue a future business strategy that favors us. The directors and officers of Macquarie Group Limited have a fiduciary duty to make decisions
that are in the best interests of their stockholders. The dependence of our manager on the Macquarie Group for administrative services creates a conflict of interest between us and the Macquarie Group.
The Resolution of Conflicts Will Be Undertaken by Employees of Our Manager's Affiliates
In the event of a conflict between us and our manager or our manager's affiliates, the conflict will be resolved either by our
manager's investment committee or by our manager's board of directors. It is anticipated that the majority of the members of our manager's investment committee and board of directors will be employees of our manager's affiliates.
Members of our manager's investment committee may also be officers and directors of our manager. Although our manager has fiduciary obligations to us and to you that require it to take the best interests of our members into account in managing
our affairs and assets, a conflict of interest relating to the resolution of conflicts between us and our manager and its affiliates does exist.
Distribution of Shares
No independent lead underwriter has been
engaged for the distribution of our shares; accordingly, we will not have the benefit of an independent "due diligence" review and investigation of the type normally performed by an unaffiliated, independent lead underwriter in connection
with an offering of securities. Although the dealer manager believes that its investigation of us and the manager for purposes of this offering of shares has been as complete as would be the case in dealing with unaffiliated parties and although the
dealer manager has retained its own separate counsel, there is no assurance that the due diligence has been performed in the same manner as that of an independent managing underwriter.
Independent selling dealers engaged by the dealer manager to sell our shares may perform due diligence on us and our manager and may
engage independent counsel in this regard. However, we cannot assure you that appropriate due diligence has been undertaken by those independent selling dealers or their counsel. The interests of the selling dealers may be in conflict with your
interests.
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Lack of Separate Representation
We and our manager and its affiliates, other than the dealer manager, are not represented by separate counsel. We have not retained
independent counsel to represent the interests of prospective investors in connection with the offering of shares. The dealer manager is represented in this offering by Porter Hedges LLP. Prospective investors should seek independent counsel if
they so desire or if any legal matters discussed in this prospectus are unclear.
Representation in Tax Audit Proceedings
Our manager is designated as our "tax matters partner" and is authorized and directed by our operating
agreement to represent us and our members, at our expense, in connection with all examinations of our affairs by federal tax authorities, including any resulting administrative or judicial proceedings. Those proceedings may involve or affect other
programs for which our manager or its affiliates act as manager. In those situations, the positions taken by our manager with respect to us may have differing effects on us and the other programs. Any decisions made by our manager with respect to
those matters will be made in a manner consistent with its duties to us and our members.
Managing Conflicts of
Interest
Our Manager's Fiduciary Duties
We are a limited liability company formed under the Delaware Limited Liability Company Act, or the Delaware Act. This summary, which describes in general terms the duties of the manager and remedies
available to you if the manager breaches its duties, is based on statutes and judicial and administrative decisions as of the date of this prospectus. This is a developing and constantly changing area of the law. If you have questions concerning the
manager's duties or you believe that the manager has breached its fiduciary duty, you should consult your own counsel.
The Delaware Act does not set forth any duties that a manager owes to a limited liability company and to its members. Nevertheless, it
does allow for duties to be imposed on a manager contractually through a limited liability company's limited liability company operating agreement. In this regard, under the terms of our operating agreement, the manager has imposed upon itself
the following duties:
•
to act as a fiduciary for the safekeeping and use of all our funds and assets, whether or not in the manager's immediate possession or control,
•
to not employ, or permit any other person to employ, our funds or assets in any manner other than as permitted by the operating agreement, and
•
to devote that amount of its time deemed necessary in its absolute discretion to carry out its duties to us.
Under the Delaware Act, when discharging duties imposed by a limited liability company operating agreement, a manager is protected from
liability to the extent it relies in good faith upon the records of the limited liability company and upon information, opinions, reports or statements presented by a person to the manager that the manager reasonably believes are within that
person's professional or expert competence. Our operating agreement contains a provision substantially similar to the provision of the Delaware Act.
There are a number of remedies available to you if you believe our manager has breached its fiduciary duty. You should contact your legal counsel if you believe that our manager has breached its fiduciary
duty. Under Delaware law and subject to certain conditions, a member may file a lawsuit on behalf of the fund, known as a derivative action, to recover damages resulting from a breach by our manager of its fiduciary duty. In addition, a member may
bring a class action and sue on behalf of himself and all other members to recover damages for a
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breach by our manager of its fiduciary duty. Derivative and class actions are complex and rapidly changing, and you should consult with your legal counsel if you have questions regarding remedies
available to members in the event of a breach of fiduciary duty by our manager.
Limitations Under Our Operating Agreement
Certain provisions of our operating agreement restrict our actions and the actions of our manager and its affiliates
in order to reduce certain conflicts of interest and to protect your interests and the interests of our other members in the event of a conflict of interest. See "Summary of Our Operating Agreement." Relevant provisions of our operating
agreement include the following:
•
Our manager and its affiliates may not receive fees or commissions from us except as provided in our operating agreement. See "Management
Compensation."
•
The expenses for which our manager and its affiliates may be reimbursed are limited.
•
Duplicate fees are prohibited.
•
We may only purchase equipment or equipment leases from our manager or its affiliates if those transactions have been warehoused on our behalf on a
temporary basis. We may only enter into joint ventures with our manager's affiliates with the approval of a majority of the directors of our manager's board of directors, including the majority of our manager's independent directors.
•
We may not give our manager or its affiliates rebates or give-ups or participate in any transaction with them that would circumvent the restrictions in
our operating agreement.
•
We may not make loans to our manager or its affiliates.
•
We may not invest in or underwrite the securities of other programs.
•
We may not issue any shares after this offering terminates.
•
We may not issue shares in exchange for property.
Allocation of Investment Opportunities
Our manager manages another
equipment leasing fund, Macquarie Equipment Leasing Fund, LLC, which is currently in its operating phase. It is likely that our manager will manage other equipment leasing funds in the future. Investment opportunities may arise which are suitable
both for us and for those other equipment leasing funds. In those cases, when allocating investment opportunities between us and other equipment leasing funds it manages, our manager will take into consideration factors which include the following:
•
specified equipment programs will have first preference for investment opportunities which meet their investment guidelines;
•
the period of time in which the funds have been seeking investments;
•
the size of the investment opportunity and the cash available to the funds to make such an investment;
•
the extent to which the investment will contribute to each fund meeting its investment objectives, including the objective of portfolio
diversification;
•
the duration of the investment and the remaining duration of each fund; and
•
the anticipated cashflow and performance effect of the investment on each fund.
These considerations will not restrict our manager's affiliates or other funds managed by our manager's affiliates from
considering or accepting investment opportunities.
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Additional Strategies for Managing Conflicts of Interest
Separation of Approval Authority
Our manager's board of directors and investment committee includes persons who are primarily dedicated to our manager's business. In order to reduce the potential for conflicts of interest,
representatives of Macquarie Group leasing businesses who originate potential transactions for consideration by our manager, or who are responsible for approving equipment acquisition transactions on behalf of those leasing businesses, will not
serve on our manager's board of directors or investment committee, other than temporarily in the event of a vacancy on such board or committee.
Dedicated Staff Resources
Our manager will be assigned Macquarie Group
staff whose activities are primarily dedicated to the operations of our manager.
Physical Separation of Activities
The central operations of our manager are situated within a Macquarie Group office that is physically separated from the Macquarie
Group's other leasing and equipment trading activities.
Separation of Confidential Information
Confidentiality policies and procedures within the Macquarie Group are designed to ensure that data recorded within Macquarie Group
electronic information systems will be separated or password protected so that data relating to us may only be accessed by Macquarie Group staff who either perform services on behalf of us, our manager or dealer manager or who provide managerial
oversight of those people.
No Investments by Staff Associated with Our Manager
As a strategy to avoid potential conflicts of interest between us and employees of the Macquarie Group of Companies, any person who:
•
is a member of our manager's board of directors;
•
is a member of our manager's investment committee;
•
is a Macquarie Group employee who is substantially involved in the day to day operations of us or our manager;
•
is a Macquarie Group employee assigned to our dealer manager and who is involved in the marketing of our shares;
•
is a Macquarie Group employee who exercises oversight of any person falling within any of the categories above; or
•
is an immediate family member or an associate person or personal company controlled by any of the above persons;
will be prohibited from buying our shares.
Chinese Walls
Chinese
walls are a crucial part of the regulatory system for financial markets. They allow a diversified financial services firm to conduct a number of businesses which could not otherwise be conducted by the one firm. Chinese walls restrict the flow of
information within a firm to ensure that information that is potentially price sensitive or confidential to one department is not improperly communicated, intentionally or inadvertently, to any other department within the firm.
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The Macquarie Group maintains Chinese walls between business areas according to their
function:
•
On the private side of the wall–those business areas that routinely receive or acquire confidential and/or inside information; and
•
On the public side of the wall–those business areas that do not obtain price sensitive information or trade or deal in securities and other
financial products or provide investment advice.
Our manager sits on the public side of Macquarie's
Chinese walls. Subject to limited exceptions that are managed by appropriate information protocols, the effect of this is that non-public information, or inside information, may not be communicated to our manager by private side businesses within
Macquarie. It is the responsibility of Macquarie Group employees that sit on the private side of the wall and provide services to our manager or that have managerial oversight to maintain the integrity of the Chinese Walls by keeping such
information strictly confidential.
Related Party Transactions and Independent Directors
Our manager has appointed an independent director to its board of directors. See "Management." To mitigate conflicts which may
arise in related party transactions, our manager has adopted the following protocols:
•
From time to time our manager may approve investments on our behalf which are then made by members of the Macquarie Group for sale to us. This
warehousing of investments will only occur for the purpose of facilitating our acquisition of equipment or the borrowing of money or obtaining of financing for us. Prior to the Macquarie Group entity purchasing an investment on our behalf, we would
commit to the relevant Macquarie Group entity to purchase that investment, and the relevant Macquarie Group entity would commit to sell that investment to us, once we have sufficient capital available for a purchase price determined according to a
pre-agreed mechanism; those mechanisms may include external enquiries by our manager or the exercise of business judgment by our manager on our behalf. Any equipment purchased by our manager or our manager's affiliates for sale to us in the
future will only be purchased from non-affiliates of our manager and will be held by our manager or our manager's affiliates on a temporary or interim basis only, generally not in excess of six months. Warehousing facilities may also take the
form of debt facilities provided by our manager or our manager's affiliate to facilitate our direct investment in transactions. We will only purchase equipment from, or enter into short-term debt facilities with, our manager or our
manager's affiliates if our manager believes it to be in our best interests. In these related party transactions our manager will engage legal counsel that is separate to that retained by the relevant Macquarie Group company to document or
review the transaction on our behalf.
•
Where the related party transaction relates to costs or expenses charged by affiliates of the manager to us that are related to a specific transaction,
that are not covered by another fee set out in this prospectus and that are expected to exceed $1,000,000 per annum, our manager will obtain a quote for the corresponding work from a non-affiliated entity. Our manager will only use its affiliate in
those circumstances where its affiliate is more cost-effective, or where special circumstances make the use of its affiliate preferable or unavoidable, provided that the cost associated with the service is reasonable in our manager's opinion.
This protocol will not apply to services such as staffing, accounting and information technology services provided to our manager by its affiliates.
•
We may appoint affiliates of the manager, on a non-exclusive basis, to remarket equipment on our behalf. Any fees or expense reimbursements paid to our
manager's affiliates for the provision of such services will be done so in strict accordance with the procedures described in this prospectus and our operating agreement. See "Management Compensation–Operating Compensation."
Policies and Procedures
Our manager maintains its own risk management framework, adapted from the broader Macquarie Group risk management framework. This risk management framework includes a number of policies and procedures
relating to, among other items, identifying, assessing and managing market, credit, liquidity, operational and legal risks. The risk management framework has been designed to reflect the market, regulatory, reputational and operational risks
specifically associated with our manager's operations and our activities.
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THE MACQUARIE GROUP
The Macquarie Group of Companies
Our manager is a member of the Macquarie Group. The Macquarie Group, whose predecessor, Hill Samuel Australia Limited, was founded as a subsidiary of the UK merchant bank, Hill Samuel & Co., in 1969,
is a diversified international provider of banking, financial, leasing, advisory and investment services. Headquartered in Sydney, Australia, the parent entity of the Macquarie Group, Macquarie Group Limited, is listed on the Australian Stock
Exchange. As of September 30, 2010, the Macquarie Group operated in more than 70 offices in 28 countries and had approximately 15,500 employees, over 3,700 of whom were located across 28 offices in North America. The Macquarie Group operates a
diversified range of financial services activities. These activities include banking services, leasing services, retail and institutional funds management services, corporate advisory services, real estate services, securities research and brokerage
services and treasury and commodity services.
As of September 30, 2010, the Macquarie Group had assets under management of
approximately $307 billion. These assets are either held by the Macquarie Group or by various listed and unlisted funds managed by the Macquarie Group.
Not all Macquarie Group offices undertake equipment leasing or asset management activities.
The Macquarie Group's Leasing Expertise
Our manager forms part of the operating group responsible for the majority of the Macquarie Group's equipment leasing activities. As of September 30, 2010, the Macquarie Group's equipment
leasing group had approximately $8.6 billion of equipment leases under management for its own account with over 700 employees located in North America, Europe, Asia and Australia / New Zealand. These employees variously specialize in:
•
lease origination across various equipment classes and industries;
•
residual value investment determination and management;
•
physical remarketing of equipment;
•
technical assessment of equipment;
•
client and asset management;
•
equipment leasing technology platforms; and
•
accounting, legal, tax and compliance services for equipment leases.
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Examples of equipment currently or previously financed by the Macquarie Group under various
lease structures include railcars, locomotives and trams, railway infrastructure, commercial jet aircraft engines, aircraft, semiconductor manufacturing equipment, maritime vessels, information technology equipment, utility equipment,
telecommunications equipment, medical equipment, road transportation equipment, power stations, electricity grids, marshalling yards, handling equipment, environmental and energy equipment and construction equipment.
The operating group to which our manager belongs managed for its own account equipment leases for over 240,000 lessees as of September
30, 2010.
The Macquarie Group's Leasing Team
We believe that the extensive global presence of the Macquarie Group and its equipment leasing expertise will be key factors in our
ability to successfully identify attractive equipment lease opportunities that meet our investment criteria. Although our manager's affiliates provide no guarantee of investment referrals to us or to our manager, we plan to capitalize on the
significant contacts and transactional, origination and management expertise of our manager's board of directors and other equipment leasing executives within the Macquarie Group. As of the date of this prospectus, key equipment leasing
executives within the Macquarie Group division to which our manager belongs include:
Garry Farrell,
Executive Director
of the Macquarie Group, has overseen the Macquarie Group's principal corporate finance, asset finance and equipment leasing activities since 2000. Mr. Farrell joined the Macquarie Group in 1986 having previously served as a corporate
attorney with Mallesons Stephen Jacques, a leading Australian law firm. During his time with Macquarie, Mr. Farrell has operated in fields including corporate, asset, structured and project finance, securitization and export credit finance.
Prior to 2000, Mr. Farrell was head of the Macquarie Group's European investment banking business. Mr. Farrell holds a Bachelor of Economics, Bachelor of Laws and Master of Laws from the University of Sydney and is an admitted
attorney in New South Wales, Australia.
David Coons,
President of Macquarie Electronics USA Inc., joined the Macquarie
Group in 2002 and was instrumental in the establishment of Macquarie Electronics, an equipment leasing business. Mr. Coons is based in the Macquarie Group's San Diego office. Prior to joining Macquarie, Mr. Coons spent nine years with
Comdisco Electronics, a division of Comdisco, Inc., his last role being that of Executive Vice President and Head of Worldwide Sales. Prior to that time, Mr. Coons held positions with Equitable Life Leasing in Dallas for a period of seven
years, with Manufacturers Hanover Leasing in Dallas and within Seafirst Leasing, a division of Seattle First National Bank. Mr. Coons obtained an MBA in Finance from the University of Texas and a Bachelor of Science from Rensselaer Polytechnic
Institute in Troy, NY.
Dave Edwards,
President of Macquarie Rail Inc., joined the Macquarie Group in 2006 and was
instrumental in the establishment of the Macquarie Group's freight rail operating lease business, headquartered in Chicago. From 1981 to 2004, Mr. Edwards was employed by GATX Corporation, a diversified leasing and finance
company. Mr. Edwards held a variety of positions during this time, including Chief Financial Officer and most recently President of GATX Rail, the
second largest freight rail operating lease business in the world at that time. Mr. Edwards holds a Bachelors Degree in Economics and History and a Masters Degree in Economics from the University of California, Davis.
Andrew Gee,
Executive Director of the Macquarie Group, joined the Macquarie Group in 1997. Mr. Gee currently heads the global
operations of Macquarie Equipment Finance, a specialist information technology leasing and services business. Mr. Gee has been instrumental in the growth of Macquarie Equipment Finance in North America, Australia / New Zealand, Asia and Europe.
Mr. Gee holds a Master of Applied Finance from Macquarie University in Sydney, Australia and a Master of Accounting from the University of Southern Queensland, Australia.
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Greg Goldstein,
President of Macquarie Equipment Finance Inc., heads the North
American operations of the Macquarie Group's specialist information technology leasing and services business. Mr. Goldstein joined the Macquarie Group in 2008 following Macquarie's acquisition of leasing operations from CIT Group.
Mr. Goldstein had been involved with those leasing operations since 1990, including periods with that business' preceding owners AT&T Systems Leasing and Newcourt Financial–Systems Leasing. Prior to his appointment as President,
Mr. Goldstein managed the product marketing, vendor programs, debt syndication and portfolio management functions. Mr. Goldstein's background also includes service as a CPA for KPMG Peat Marwick. Mr. Goldstein holds a Bachelor
Degree in Accounting from Wayne State University in Michigan.
Niall Morrissey,
Executive Director of the Macquarie
Group, joined the Macquarie Group in 1998. Mr. Morrissey is presently based in Tokyo, Japan, overseeing regional equipment leasing activities in Asia. Previously, Mr. Morrissey established the Macquarie Group's equipment leasing
activities in South Korea, China, Singapore and Malaysia. Prior to joining Macquarie, Mr. Morrissey served as an area sales manager in southern California for GE Capital.
Andrew Pearce,
President of Macquarie Aviation Capital Limited, joined the Macquarie Group in 2000 and currently heads the Macquarie Group's specialist aircraft engine leasing business which
operates from Dublin, Ireland. Prior to joining the Macquarie Group, Mr. Pearce held positions at Airbus Industrie in Toulouse, TNT Express Worldwide UK and Ansett Worldwide Aviation Services. Mr. Pearce holds a Master of Laws from the
University of Sydney, Australia, a Bachelor of Laws from the University of New South Wales, Australia, and a Bachelor of Commerce from the University of New South Wales, Australia.
Lloyd Thomas,
Executive Director of the Macquarie Group, joined the Macquarie Group in 1998 and was instrumental in establishing
Macquarie Leasing, the Macquarie Group's small ticket equipment leasing business. Mr. Thomas, who is presently based in Sydney, Australia, has overseen all aspects of the establishment, growth and periodic securitizations of the Macquarie
Leasing portfolio. Prior to joining the Macquarie Group, Mr. Thomas served as General Manager Leasing at Suncorp Metway, National Leasing Manager at Metway Bank Limited and Chief Accountant at Prudential Finance Limited. Mr. Thomas holds a
Bachelor of Business Studies and is a Certified Practicing Accountant.
John Wilson,
Executive Chairman of Capital
Meters Limited and Macquarie Leasing Limited, joined the Macquarie Group in 1997. Since 2004, Mr. Wilson has been head of two UK leasing businesses which lease traditional and smart gas and electricity meters to British Gas and other major UK
energy suppliers. Prior to his present role, Mr. Wilson oversaw a number of new leasing business initiatives within the Macquarie Group. Before joining Macquarie, Mr. Wilson worked in a senior managerial position for AMP Limited, a leading
Australian wealth management company, and served as an officer for nine years in the Royal Australian Navy. Mr. Wilson has an MBA from the University of Technology, Sydney, Australia, a Bachelor of Science from the University of New South
Wales, Australia, and a Graduate Diploma in Management Science from the University of Canberra, Australia.
Our manager's
affiliates are not obligated to introduce transactions to us and there is no assurance that our manager's affiliates will introduce potential transactions to us.
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MANAGEMENT
Our manager is Macquarie Asset Management Inc. Our investment decisions will be made by our manager's investment committee, which at
the date of this prospectus comprises Messrs Fahy and Edghill, or by our manager's board of directors, which at the date of this prospectus comprises Messrs Fahy, Edghill and Pitts. See "–Our Board of Directors and Investment
Committee." Our manager and the persons making our investment decisions can be contacted at:
•
our manager's principal office at 225 Franklin St, 17th Floor, Suite 1700, Boston, Massachusetts, 02110; or
•
our manager's telephone number, 866-965-7622.
Our manager is a member of the Macquarie Group. In managing us, our manager will have access to the experienced leasing, funds management and other resources of the Macquarie Group. Our manager is the
sponsor of Macquarie Equipment Leasing Fund, LLC, an equipment leasing program which completed its offering period on June     , 2011 and is currently in its operating period. We have provided prior performance information
related to Macquarie Equipment Leasing Fund, LLC in the Prior Performance Tables included as Exhibit B to this Prospectus in order to enable you to evaluate the experience of our manager.
Our manager's website address is www.macquarie.com/mami. The information contained on our manager's website is not part of this
prospectus.
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Organizational Diagram
The following organization chart sets out the ownership relationship between our manager, the dealer manager and the Macquarie Group as of
the date of this prospectus. It does not contain all of the subsidiaries of the Macquarie Group Limited. All arrows represent a 100% shareholding in the subsidiary companies.
Our Board of Directors and Investment Committee
The following table provides information regarding the board of directors of our manager.
Name
Age
Title
David Fahy
48
Director and President
Duncan Edghill
33
Director and Vice President
James A. Pitts
71
Independent Director
David Fahy
has been President of our manager since its inception on August 21, 2008. Mr. Fahy has been with the Macquarie Group since joining its equipment leasing group in September 1998. Since June 2006, Mr. Fahy has been responsible for
global equipment leasing investment and co-investment opportunities for both
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institutional and retail investors. Mr. Fahy is situated in Sydney, Australia, and is in frequent attendance at our manager's office in Boston. From July 2001 to June 2006,
Mr. Fahy was responsible for the Macquarie Group's structured technology syndication investments business. Prior to joining Macquarie, Mr. Fahy was employed at Coopers and Lybrand in Sydney, Australia from January 1987 to September
1998 in a number of roles, including that of Tax Director, and at Ernst & Young in Dublin, Ireland from September 1982 to December 1986 in a number of roles, including that of chartered accountant. Mr. Fahy holds a Bachelor of Commerce
from University College Galway, Ireland and is a Fellow of the Institute of Chartered Accountants in Ireland and a member of the Institute of Chartered Accountants in Australia.
Duncan Edghill
, Director and Vice President of our manager, joined the Macquarie Group in February 2001. Situated in Boston,
Mr. Edghill has been primarily dedicated to the operations of our manager since its inception. From April 2005 to May 2008, Mr. Edghill was based in the Macquarie Group's Vienna, Austria office where he was involved in the
establishment of a European equipment leasing business and in the development of equipment leasing investment opportunities. From February 2001 to April 2005, Mr. Edghill was based in the Macquarie Group's Sydney, Australia office in a
variety of equipment leasing roles including that of attorney for several leasing businesses. Mr. Edghill holds a Bachelor of Laws and a Bachelor of Commerce from the University of New South Wales, Sydney, Australia, and is an admitted attorney
in New South Wales, Australia.
James A. Pitts
, Independent Director of our manager, joined the board of directors of
our manager in March, 2009. Situated in Boston, Mr. Pitts was a Director of Wainwright Bank & Trust Company, a NASDAQ listed community bank, from May 2005 until November 2010, when the bank was sold. Mr. Pitts was Chair of
Wainwright Bank & Trust Company's Audit Committee from January 2008 and was a rotating member of its Executive Committee from April 2006 until the bank's sale. Mr. Pitts is a Director of the National Association of Corporate
Directors New England Chapter and has been the chair of its Audit Committee since June 2005. From 1996 to May 2004, Mr. Pitts served as the Chief Financial Officer and Treasurer of The Boston Foundation, a $650 million community foundation, and
from June 2004 to August 2004, Mr. Pitts served as the Chief Investment Officer and Treasurer of The Boston Foundation. From 1988 to 1996, Mr. Pitts held positions including Executive Vice President and Chief Financial Officer of Clean
Harbors, Inc., a NASDAQ listed environmental disposal and service firm, as well as Chief Financial Officer of Bain and Company, an international consulting firm. Prior to that time, Mr. Pitts also held senior financial roles in publicly traded
multinational corporations where he held wide responsibilities for SEC reporting, financial statement preparation, internal audit, risk management and compliance and regulatory matters. In his roles as Chief Financial Officer, Mr. Pitts has
reviewed and overseen various equipment leasing transactions. Mr. Pitts holds a MBA from the University of Connecticut and a BBA from Niagara University, New York. Mr. Pitts is a Certified Public Accountant and holds a Certificate of
Director Education.
Messrs. Fahy, Edghill and Pitts may resign their positions with our manager at any time. Although there
are a number of executives experienced in the equipment leasing industry within the Macquarie Group who could be appointed to replace Messrs Fahy and Edghill as non-independent directors, the executive officers of our manager will have the most
current information about and experience with our business and portfolio. Accordingly, the departure of these individuals from our manager could result in business disruptions and investment decisions that may not be consistent with our investment
objectives and policies, which could cause us to experience reduced returns from our portfolio. The board of directors of our manager will establish an investment committee which may be comprised of directors and officers of the manager, as well as
employees of our manager's affiliates. Initially, the investment committee will be comprised of Messrs. Fahy and Edghill. Our manager's investment committee will make decisions on whether or not we should invest in a particular
transaction. See "Investment Objectives and Policies–Transaction Review and Approvals."
Independent Directors
Under our operating agreement, the board of directors of our manager must consist of at least one independent director,
except for a period of 90 days after the death, removal or resignation of an independent
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director. An independent director may not, directly or indirectly (including through a member of his or her immediate family), be associated with our manager or its affiliates within the last two
years before becoming a director and at such time an independent director may not own any interest in, be employed by, have any material business or professional relationship with, serve as an officer or director of our manager's affiliates or
perform services (other than as an independent director) for us.
Our manager, and not us, will be responsible for the payment
of any fees or retainers to our manager's independent directors.
Transaction Sources
We anticipate that most, if not all, of our equipment leases and other investments will be introduced to us by members of the Macquarie
Group. In particular, we expect that the Macquarie Group's equipment leasing group will introduce most, if not all, of our transactions to us. See "The Macquarie Group–The Macquarie Group of Companies–The Macquarie Group's
Leasing Expertise." Our manager is operated by the Macquarie Group's leasing group. We will not however be precluded from considering investment opportunities introduced by other non-Macquarie Group parties.
We will not employ our own full-time officers, managers or employees. Instead, our manager will supervise and control our business
affairs. We will be reliant upon employees of the Macquarie Group of Companies, of which our manager is a member. See "The Macquarie Group."
Our manager's affiliates are not obligated to introduce transactions to us and there is no assurance that they will do so.
License Agreement
Macquarie Group Limited has licensed use of the
"Macquarie" name and logos to Macquarie Financial Holdings Limited, which in turn has granted us a non-exclusive and revocable license to use the "Macquarie" name and logos. No license fees are payable by us for use of the
"Macquarie" name and logos. Macquarie Group Limited has registered the logos in the U.S. Patent and Trademark Office. Macquarie Group Limited has also filed an application for the mark MACQUARIE with the U.S. Patent and Trademark Office.
Macquarie Financial Holdings Limited would be expected to terminate our license to use the "Macquarie" name and logos if our manager ceases to be our manager.
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CAPITALIZATION
Our capitalization, as of the date of this prospectus and as adjusted to reflect the issuance and sale of the shares offered hereby
assuming (i) that we receive the minimum offering amount of $1,200,000, and (ii) that the maximum 20,000,000 shares are sold at the public offering price of $10.00 per share, in each case excluding shares sold under our DRP, is as follows:
As of
February 28,
2011
Minimum
$1,200,000
Maximum
$200,000,000
Shares of Membership Interest ($10.00 per share)
200
120,000
20,000,000
Total Capitalization
$
2,000
$
1,202,000
$
200,000,000
Less-Estimated Organization and Offering Expenses
$
149,640
$
24,000,000
Net Capitalization
$
2,000
$
1,050,360
$
176,000,000
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INCOME, LOSSES, DISTRIBUTIONS AND DISTRIBUTIONS POLICY
Allocations of Net Income, Net Loss and Distributions among Investors.
Our manager will have the sole discretion
to determine what portion, if any, of cash on hand will be invested and reinvested in equipment and what portion will be distributed to our members. Allocation of net income and net loss will be made 1.0% to our manager and 99.0% to our members
until investor return is achieved. We will also pay our manager an amount equal to 1.0% of distributions until investor return is achieved. We will achieve investor return when our members have received a pre-tax 8.0% per annum internal rate of
return, compounded daily on all capital contributed to us, calculated on the date of distribution and taking into account all capital contributions and all distributions. Investor return includes a return equal to all capital contributions we have
received from you. Following investor return, we will pay our manager an amount equal to 19.0% of distributions made to our members. We will not make distributions in kind, that is, of our non-cash assets, except possibly on our liquidation, and
then only to a liquidating trust.
The following graph is an illustrative example of a series of cashflows which would
result in 'investor return' being achieved.
The following graph is an example only and is not a forecast or guarantee of the distributions we will make or that we will in fact achieve investor return.
The purpose of the following
graph is solely to illustrate (a) an example of the cashflows necessary for the achievement of 'investor return,' and (b) that any distributions which are made will likely contain both a return on, and a return of, capital. For
illustrative purposes, an investment of $100,000 is assumed:
The foregoing graph is an example only and is not a forecast or guarantee of the distributions we will make
or that we will in fact achieve investor return.
Timing of Distributions.
Generally, we will make cash distributions
on a monthly basis, beginning in the month following the first full month after we receive the minimum amount of $1,200,000 of offering proceeds and hold the initial closing of this offering. We anticipate that the monthly cash distributions,
provided funds are available, will be made by approximately 15 days after the end of each month. Since monthly cash distributions are subject to the availability of funds, any anticipated monthly distributions may not be made. We may, however, elect
not to make distributions until subscription funds have been invested, which could take as long as two years. If we elect to make distributions before funds have been fully invested, those distributions may be a return of capital rather than a
return on capital.
Federal Income Tax Deferral.
We anticipate that income taxes on a portion of our distributions may
be deferred during our early years due primarily to operating losses and cost recovery or depreciation deductions available from the portion of our equipment that is leased to third-party end users under the majority of our leases in the U.S., but
not from other types of investments.
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Reinvestment of Our Net Revenues in Additional Leases During the Operating Period.
We
have the right to reinvest our net revenues during the offering and operating periods.
Return of Unused Capital.
We
will return to you and our other investors, without interest, any of your net subscription funds that we do not commit to investment or that are not required as reserves within the latter of 24 months after the beginning of this offering or 12
months after receipt by us. "Net subscription funds" means your original subscription amount minus the organization and offering expense allowance and dealer manager fees, selling commissions and due diligence expenses paid on the sale of
your shares.
Subscription funds will be considered committed for investment, and need not be returned, to the extent we have
written agreements in principle, commitment letters, letters of intent, option agreements or similar contracts for the use of your net subscription funds in our investments. However, we must complete our investments under those agreements within an
additional period of 12 months or return the uninvested funds to you and our other investors.
Sources of Cash
Distributions.
Our operating agreement permits us to establish an initial cash reserve for general working capital purposes. Any cash reserves used need not be restored, but if they are restored they may be restored from our operating revenues
or additional subscription funds. We may distribute to you and our other investors any cash reserves that our manager determines are no longer required for our operations. However, our manager intends to make distributions only out of our cash flow.
Our manager will seek to enter into transactions so that distributions will be fully supported by funds from operations and not from uninvested capital within three months of closing the minimum offering. Even where distributions are supported by
funds from operations however, each distribution we make is very likely to contain both a return on, and a return of, your capital.
We will not be permitted to borrow funds from our manager or any other person for the purpose of making distributions.
Allocation of Profits and Losses for Tax Purposes.
Our profits and losses for each fiscal year and fiscal period are to be determined by us in accordance with the practices and accounting methods
followed in determining taxable income or loss for federal income tax purposes. Profits for any fiscal period during the operating period will be allocated as follows in proportion to our members' share ownership:
•
first, to recover any unrecovered loss allocated to any member pursuant to the operating agreement;
•
second, 1.0% to the manager and 99.0% to members until investor return is achieved; and
•
thereafter, 19.0% to the manager and 81.0% to the members.
During our liquidation period, while we sell our assets, profits will be allocated as follows:
•
first, to recover any unrecovered loss allocated to any member pursuant to the operating agreement;
•
second, the greater of (i) 1.0% or (ii) the excess of the distributions made to the manager prior to investor return over the cumulative
amount of income previously allocated to the manager, to the manager and the balance to the members until investor return is achieved; and
•
thereafter, 19.0% to the manager and 81.0% to the members.
Losses for any fiscal period will be allocated:
•
first, 19.0% to our manager and 81.0% to the members until the cumulative amount of losses allocated to those who are then members equals the
cumulative profits previously allocated to those members; and
•
thereafter, 1.0% to our manager and 99.0% to the members; provided that if the allocation of losses to any member would result in an adjusted capital
account deficit, then losses will be allocated to all other members, and when no member may be allocated losses without violating the limitation above, then losses will be allocated to the manager.
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Our operating agreement contains a "qualified income offset" provision which is
intended to prevent a member's capital account from becoming negative. For example, if a member receives an allocation of depreciation expense that causes that member's capital account to become negative, that member will be allocated
items of income or gain in an amount sufficient to eliminate the deficit balance in the member's capital account.
Distributions under the DRP.
When you subscribe for the minimum subscription of 500 shares or more, you may elect to participate
in the DRP, which allows you to reinvest distributions made by us during the offering period, by marking the applicable box in your subscription agreement. If you elect to participate in the DRP, we will pay distributions during the offering period
in the form of additional shares to the extent shares remain available for purchase under the DRP. You do not need to purchase a minimum number of shares under the DRP and we may issue fractional shares. Shares purchased under the DRP will be sold
for $9.00 per share, which represents the offering price less the dealer manager fee and selling commissions. See "Questions and Answers About Our Distribution Reinvestment Plan."
If you elect to participate in our DRP, we will use your distributions during the offering period to purchase your additional shares not
later than 30 days from the applicable distribution date, to the extent that shares remain available for purchase under the DRP. You may choose to reinvest your distributions at any time during the offering period by making the appropriate election
on your subscription agreement, which is included in Appendix C to this prospectus. If you wish to change the election you made on a previously submitted subscription agreement, you may do so by written notice to our manager as described in Appendix
E.
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FEDERAL INCOME TAX CONSEQUENCES
THIS SECTION DISCUSSES THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES FOR AN INDIVIDUAL INVESTOR WHO IS A U.S. CITIZEN OR RESIDENT. THIS
SUMMARY IS NOT EXHAUSTIVE OF ALL POSSIBLE TAX CONSIDERATIONS AND IS NOT TAX ADVICE. MOREOVER, THIS SUMMARY DOES NOT DEAL WITH ALL TAX MATTERS THAT MAY BE RELEVANT TO YOU, AS A PARTICULAR PROSPECTIVE INVESTOR, IN LIGHT OF YOUR PERSONAL CIRCUMSTANCES.
THE TAX CONSEQUENCES OF INVESTING IN OUR SHARES WILL NOT BE THE SAME FOR ALL INVESTORS. A CAREFUL ANALYSIS OF YOUR PARTICULAR TAX SITUATION IS REQUIRED TO EVALUATE THIS INVESTMENT PROPERLY. THEREFORE, WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR.
The discussion contained herein is based upon the Internal Revenue Code of 1986, or the Code, as amended, rules and
regulations published thereunder and published rulings and court decisions, as each exists on the date of this prospectus. The discussion could be significantly affected by statutory, regulatory or interpretive changes, including changes in the
ruling policy of the Internal Revenue Service, or the IRS, or by future court decisions. Any of these changes may or may not be retroactively applied to transactions entered into or completed prior to the change. This discussion necessarily
condenses or eliminates details that might adversely affect some prospective investors significantly as a consequence of specific factual circumstances affecting the investor.
Tax treatment for other investors–such as trusts, corporations, tax-exempt organizations and employee benefit plans –are likely to differ significantly from the principal tax consequences
outlined in this section. Those other investors should consult with their tax advisors. See "–Investment by Employee Benefit Plans and Other Tax-Exempt Organizations." State and local tax consequences may differ from the federal
income tax consequences described below. See "–State and Local Taxes."
Opinion of Counsel
Baker, Donelson, Bearman, Caldwell & Berkowitz, a professional corporation, which we refer to as Baker Donelson,
our counsel, is of the opinion that, for federal income tax purposes:
1. The Fund will be classified as a
partnership for federal income tax purposes and not as an association taxable as a corporation, and will not be treated as a publicly traded partnership. As a result, the Fund will not be subject to federal income taxation but will be required to
file a partnership information tax return each year. Each member will be required to take into account, in computing such member's federal income tax liability, his or her distributive share of all items of income, gain, loss, deduction or
credit (including items of tax preference) of the Fund, and will be subject to tax on such income or gain even if the Fund does not make any cash distributions.
2. The allocations of income and loss to members should be considered by the IRS to have substantial economic effect and therefore should not be subject to challenge by the IRS on that basis.
Baker Donelson is unable to render, and therefore has not rendered, an opinion as to the status of the Fund's leases for federal
income tax purposes, because such status is subject to the facts and circumstances of each lease transaction, and the specific terms of such transactions will not be known until the transactions are entered into by the Fund, and no such transactions
are yet in place. If a leasing transaction is treated as a sale or financing rather than a true lease, the investors would not be entitled to cost recovery deductions with respect to such leases. On the other hand, a portion of the lease rental
payments would be deemed to constitute amortization of such financing or sales proceeds which would not be taxable. Inasmuch as the facts and circumstances of each lease transaction, and the tax consequences of each lease transaction, will not be
known until the transactions are entered into by the Fund, counsel can render no opinion as to such tax consequences or as to the risk resulting from the absence of such opinion.
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In general, a member's distributive share of the Fund's income, gain, deduction or
loss will be determined in accordance with the operating agreement. Substantial economic effect is defined by the Treasury Regulations. The allocations included in the operating agreement should meet the economic effect test and should not be
significantly modified if challenged by the IRS. The economic effect of allocations also must be "substantial," which takes into account the individual tax situation of an investor. It cannot be determined whether the economic effect of
the allocations in the operating agreement is substantial because the tax situations of the investors are unknown; however, because the allocations do not vary from year to year or investor to investor, we believe that the allocations will be deemed
to be substantial. If the IRS were successful in challenging the allocations, the investors' share of tax loss could decrease or their share of taxable income could increase. See "–Allocations of Profits and Losses."
Counsel's opinion is based upon the facts described in this prospectus and upon additional facts that we provided to counsel about
our operations. Any alteration of our activities from the description we gave to counsel may render the opinion unreliable. Furthermore, the opinion of counsel is based upon law as of the date of the opinion, which is subject to change either
prospectively or retroactively.
You should note that the tax opinion represents only our counsel's best legal judgment
and has no binding effect or official status of any kind, on the IRS or otherwise; and neither we nor our counsel has requested a ruling from the IRS on any of the tax matters discussed in this prospectus. The IRS may not accept the conclusions set
forth in our counsel's opinion.
Our counsel will not prepare or review our income tax returns, which will be prepared by
our manager and our independent registered public accounting firm. Our manager will make a number of decisions on tax matters such as the expensing or capitalizing of particular items, the proper period over which capital costs may be depreciated or
amortized and many similar matters. Those matters are usually handled by taxpayers, often with the advice of independent accountants, and are usually not reviewed with counsel.
With regard to the tax consequences to you of an investment in our shares, your use of our counsel's tax opinion letter is subject
to the limitations of the Code and Treasury Regulations set forth below:
•
With respect to any material federal tax issue on which our counsel has issued an opinion, its opinion may not be sufficient for you to use for the
purpose of avoiding penalties relating to any substantial understatement of income tax under Section 6662(d) of the Code.
•
Because we have entered into a compensation arrangement with our counsel to provide certain legal services to us, including its tax opinion letter, our
counsel's tax opinion letter was not written and cannot be used by you for the purpose of avoiding penalties relating to any reportable transaction understatement of income tax under Section 6662A of the Code.
The limitations set forth above on your use of our counsel's tax opinion letter apply only for federal tax purposes. They do not
apply to your right to rely on our counsel's tax opinion letter and the discussion in the "Federal Income Tax Consequences" section of this prospectus under the federal securities laws.
Classification as a Partnership.
In order to be classified as a partnership for federal income tax purposes, we must not be classified as a corporation under the Code or elect to be classified as a corporation under the Code. We have
represented to Baker Donelson that we will not elect to be treated as a corporation for federal income tax purposes.
Treasury
Regulations Section 301.7701-2(b)(1), (3), (4), (5), (6), (7) and (8) sets forth the business entities which are considered to be corporations and thus not eligible for classification as a partnership. Baker Donelson has concluded
that we are not described in Treasury Regulations Section 301.7701-2(b)(1), (3), (4), (5), (6) or
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(8) because we are a Delaware limited liability company, are not an insurance company, do not engage in banking activities with deposits insured under the Federal Deposit Insurance Act and
are not owned by a state or political subdivision. We will be classified as a corporation under Treasury Regulations Section 301.7701-2(b)(7) if we are classified as a corporation by any other section of the Code other than Code
Section 7701.
Code Section 7704 provides that a "publicly traded partnership" will be treated as a
corporation. A publicly traded partnership is one in which the interests in the partnership are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. An established securities
market includes a securities exchange, as well as a regular over-the-counter market. Treasury Regulations under Code Section 7704 state that interests in a partnership are readily tradable on a secondary market or the substantial equivalent
thereof if (1) interests in the entity are regularly quoted by any person making a market in the interests; (2) any person regularly makes available to the public bid or offer quotes and stands ready to effect buy or sell transactions at
the quoted prices for itself or on behalf of others; (3) the holder of the interest has a readily available, regular and ongoing opportunity to sell the interest through a public means of obtaining or providing information; or
(4) prospective buyers and sellers otherwise have the opportunity to buy, sell or exchange interests in the partnership in a time frame and with the regularity and continuity that is comparable to the foregoing. Further, in order to be a
publicly traded partnership, the partnership must participate in the market or recognize the transfers made on the market. A partnership will be considered as participating in public trading where trading in its interests is in fact taking place and
the partnership's governing documents impose no limitation on the holders' ability to readily transfer their interests. A partnership's right to refuse to recognize transfers is not a limitation unless the right is actually exercised.
Treasury Regulations provide several safe harbors which a partnership may use in order to avoid its interests being
considered as readily tradable on a secondary market or the substantial equivalent thereof. One of the safe harbors which is available to us is the so-called "2.0% safe harbor," which provides that interests in a partnership are not
readily tradable on a secondary market or the substantial equivalent thereof if the sum of the percentage interests in partnership capital or profits that are sold or otherwise transferred during a tax year does not exceed 2.0% of the total
interests in capital or profits. Another safe harbor applies to transfers through a "qualified matching service" that do not exceed 10.0% of the total interests in capital and profits, reduced in certain cases by the percentage transferred
outside the qualified matching service. The Treasury Regulations impose significant limitations on qualified matching services including the requirements that a sale cannot be closed any sooner than 45 days after the interest was first listed for
sale and that interest may not be listed for more than 120 days before being delisted for a period of at least 60 days.
Whether our shares will become readily tradable on a secondary market or the substantial equivalent thereof cannot be predicted with
certainty. We have no control over an independent third person establishing a secondary market in our shares. However, our operating agreement requires that an investor obtain the consent of our manager prior to any transfer of shares. The manager
intends to exercise its discretion by withholding its consent to transfers that do not fall within the parameters of any safe harbor. If we comply with the safe-harbor provisions of the Treasury Regulations, Baker Donelson is of the opinion that we
will not be considered a publicly traded partnership.
If we were treated for federal income tax purposes as a corporation in
any year, (i) we would be required to pay federal income taxes upon our taxable income; (ii) state and local income taxes could be imposed on us; (iii) our losses would not be reportable by the investors on their personal income tax
returns; (iv) any distributions would be taxable to an investor as (a) ordinary income to the extent of current or accumulated earnings and profits, and (b) gain from the sale of the investor's shares to the extent any
distribution exceeded the earnings and profits and the tax basis of the shares; and (v) distributions would be classified as portfolio income which would not be available to offset passive activity losses. See "–Limitation on
Deduction of Losses–Passive Loss Limitation." Also, a change in status from a partnership to a corporation could result in taxable income to an investor. The amount of taxable income would equal his share of our liabilities over the
adjusted basis of his shares. Any of the foregoing would substantially reduce the effective yield on an investment in shares.
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The following discussion is based upon the assumption that we will be classified as a
partnership for federal income tax purposes.
Allocations of Profits and Losses
In general, a partner's distributive share of partnership income, gain, deduction or loss will be determined in accordance with the
partnership agreement. However, if the allocations do not have substantial economic effect, the partner's distributive share will be determined in accordance with the partners' interests in the partnership. Therefore, your share of any
item of our income, gain, loss, deductions, or credits is determined by our operating agreement unless the allocations do not have substantial economic effect. See "Summary of Our Operating Agreement."
An allocation has economic effect under the Treasury Regulations if: (i) each partner's share of partnership items is reflected
by an increase or decrease in the partner's capital account; (ii) liquidation proceeds are distributed in accordance with capital account balances; and (iii) any partner with a capital account deficit following the distribution of
liquidation proceeds is required to restore such deficit. Even if a partner is not required to restore a deficit in his capital account, the allocations will still have economic effect if the partnership agreement contains a qualified income offset
provision. A qualified income offset provision requires allocation of income or gain to a partner when a partner unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4)-(6) in an amount and manner sufficient to eliminate such deficit balance as quickly as possible.
Our operating agreement prohibits losses from being allocated to an investor that would cause a deficit capital account in excess of the investor's share of our minimum gain. Nonrecourse deductions
will be allocated in the same manner as operating profits and losses. The operating agreement contains a minimum gain chargeback provision and a qualified income offset provision that are intended to comply with the provisions of the Treasury
Regulations. The operating agreement provides that capital accounts will be maintained in accordance with the provisions of the Treasury Regulations. The operating agreement also provides that proceeds on liquidation will be distributed in
accordance with positive capital account balances. Therefore, the allocations included in our operating agreement should meet the economic effect test and should not be significantly modified if challenged by the IRS.
The economic effect of a partnership's allocations also must be "substantial." Under Section 1.704-1(b)(2)(iii) of
the Treasury Regulations, the economic effect of an allocation is substantial if there is a reasonable possibility that the allocation will affect substantially the dollar amounts to be received by the partners from the partnership, independent of
tax consequences. Notwithstanding the foregoing, the economic effect is not substantial if, at the time that the allocation becomes part of the partnership agreement, (i) the after-tax economic consequences of at least one partner may, in
present value terms, be enhanced compared to such consequences if the allocation were not contained in the partnership agreement, and (ii) there is a strong likelihood that the after-tax economic consequences of no partner will, in present
value terms, be substantially diminished compared to such consequences if the allocations were not contained in the partnership agreement. The Treasury Regulations include a presumption that the book value of depreciable partnership property is
presumed to be its fair market value, and adjustments to book value will be presumed to be matched by corresponding changes in fair market value.
The economic effect of our allocations also must be "substantial." It cannot be determined whether the economic effect of the allocations in our operating agreement is substantial because the
tax situations of the investors are unknown; however, because the allocations do not vary from year to year or investor to investor, we believe that the allocations will be deemed to be substantial. However, no assurance can be given that the IRS
will not disagree. If the IRS were successful in challenging our allocations, the investors' share of tax loss could decrease or their share of taxable income could increase.
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Our income and loss for the year will be allocated among our members to take into account
the varying interests of our members during the year using any method permissible under Code Section 706 that our manager may select. If any members hold their shares for less than the entire year, they will be allocated income and loss using
the method as selected by our manager that reflects the part-year ownership as is permissible under Code Section 706. For purposes of allocating income or loss among our members, we will treat our operations as occurring ratably over each
fiscal year. In other words, we will assume that income and loss are spread evenly over the fiscal year. Thus, if some members are admitted after others, those members admitted later may receive a smaller portion of each item of our net profits and
net losses than the members who were admitted earlier. Nevertheless, those members still will be obligated to make the same capital contributions to us for their interests as the members who were admitted previously.
Income Recognition
We
prepare our tax returns using the accrual method of accounting. Under the accrual method, we will include in income items such as interest and rentals as and when earned by us, whether or not received. Thus, we may be required to recognize income
sooner than would be the case under the cash receipts and disbursements method of accounting.
Some leases may provide for
varying rental payments over the years. Code Section 467 can require a lessor to take those rental payments into income as if the rent accrued at a constant level rate. This provision applies to any rental agreement for the use of tangible
property that involves total payments in excess of $250,000 and either provides for increasing (or decreasing) rental payments, or provides that some rent for the use of property in a calendar year is payable after the close of the following
calendar year, including certain sale-leaseback transactions and certain long-term leases. Certain of our leases may provide for varying rental payments. If so, Section 467 requires us to accrue the rental payments on those leases at a constant
level rate. This could result in investors receiving increased allocations of taxable income or reduced allocations of loss in earlier years, without any increase in distributions until subsequent years. An additional consequence could be a
conversion of a portion of our rental income from any such lease to interest income. Rental income generally constitutes passive income. Interest income generally constitutes portfolio income. See "–Limitation on Deduction of Losses
–Passive Loss Limitation."
Taxation of Investors
As long as we are treated as a partnership for federal income tax purposes, we will not be subject to any federal income taxes.
Nonetheless, we will file federal partnership information tax returns for each calendar year.
Each investor will be required
to report on his own federal income tax return his share of our items of income, gain, loss, deduction or credit. An investor will be subject to tax on his distributive share of our income whether or not any distribution is made to him.
Initially, an investor's tax basis for his shares will be equal to the price paid for the shares. Each investor will increase the
tax basis for his shares by (i) his allocable share of our taxable income, and (ii) any increase in his share of our liabilities, and will decrease the tax basis for his shares by:
•
his allocable share of our tax loss;
•
our expenditures that are not deductible in computing our taxable income and not properly chargeable to a capital account;
•
the amount of any distributions; and
•
any reduction in his share of our liabilities.
If the amount of a cash distribution to an investor for any year exceeds the investor's share of our taxable income for the year, the excess will constitute a return of capital. A return of capital
is applied first to reduce the
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tax basis of the investor's shares. Any amounts in excess of the tax basis generally will be taxable as a gain from the sale of a capital asset if the shares are held by you as a capital
asset. Any reduction in your share of non-recourse liabilities, such as might arise as a result of a reduction of your percentage interest in us upon issuance of additional shares to new or existing members, will be treated as a distribution of cash
to you. A portion of any distribution in excess of your tax basis will, however, be recharacterized as ordinary income in the same percentage that ordinary income would be realized upon a sale by us of all our assets, for example, because of
depreciation recapture. In addition, to the extent that a distribution would cause the amount you are considered to have "at risk" with respect to equipment placed in service in a given year to become negative, you will have to include the
amount in your gross income up to the amount of losses previously taken with respect to the equipment. Further, a non-pro rata distribution of money or property, such as might arise as a result of a reduction of your share of our liabilities upon
the admission of additional members, may result in ordinary income to you, regardless of your tax basis in your shares, if the distribution reduces your share of our "unrealized receivables," including depreciation recapture, or
substantially appreciated "inventory items." These terms are defined in Code Section 751 and are known as "Section 751 assets." To that extent, you will be treated as having been distributed your proportionate share of our
Section 751 assets and having exchanged those assets with us in return for the non-pro rata portion of the actual distribution made to you. This last deemed exchange generally will result in your realization of ordinary income under
Section 751(b) of the Code. That ordinary income will equal the excess of (i) the non-pro rata portion of that distribution over (ii) your tax basis for your share of Section 751 assets deemed relinquished in the exchange.
Participation in our Distribution Reinvestment Plan
Although the tax treatment of participation in corporate dividend reinvestment plans is well-established, the treatment of participation in our DRP is less clear because we expect to be treated as a
partnership for federal income tax purposes, rather than as a corporation. See "–Classification as a Partnership." If the general principles applicable to corporate dividend reinvestment plans were to apply to us, members
participating in our DRP would be treated as having received the applicable distributions and immediately contributed that amount to us in exchange for additional shares. We intend to maintain our records consistent with that approach in that we
will show a distribution to members participating in our DRP and an associated purchase by them of shares from us.
If the IRS
were to treat participation in our DRP in a similar fashion, a member who participates in our DRP will be treated as receiving all cash distributions reinvested in shares registered in his name pursuant to our DRP. Those distributions would be
treated for tax proposes like other cash distributions. See "–Taxation of Investors." Generally speaking, the Treasury Regulations provide that when a partner makes an additional cash contribution to a partnership, the holding period
of that partner's partnership interest becomes a "split" holding period, with the portion of the interest attributable to the additional contribution (determined by the ratio of the amount of the additional cash contributions to the
fair market value of the partnership interest after contribution) treated as having a holding period that begins the day following the date of the additional contribution and the balance of the partnership interest retaining the holding period that
it had prior to the contribution. A special rule under the Treasury Regulations also provides, however, that in determining the holding period of a partnership interest upon a sale of the interest, cash distributions received during the one-year
period prior to the sale may be applied to reduce the cash contributions made during that period, on a last-in-first-out basis. Application of this special rule may, in many instances, prevent a member from having a short-term holding period with
respect to a portion of his interest in us at the time of sale of all or part or his interest if the only shares acquired by the member during the one-year period preceding the sale were acquired through our DRP. For the tax treatment of any gain on
such a sale, see "–Disposition of Shares."
While, as noted above, the Treasury Regulations generally provide
that an interest in a partnership, or an entity treated as a partnership, such as us, is a single interest, with the result that a member's interest in us can, subject to the special rule mentioned in the preceding paragraph, have a
"split" holding period upon the acquisition of additional shares, there is an exception to this rule that permits a partner in a publicly-traded
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partnership to treat separately-identifiable shares therein that were acquired at different times to have different holding periods. We do not expect that exception will apply to a member's
interest in us because we do not expect to be a publicly-traded partnership. See "–Classification as a Partnership."
If a member elects to participate in our DRP, the deemed distribution and corresponding investment will not, in and of themselves, have any net effect on the basis of the member's interest in us.
This is the case even though the member's basis would be reduced by the amount of the distribution, because the member's basis would be increased by an equal amount as a result of the corresponding reinvestment. That member's share of
our non-recourse liabilities – which are also included in the member's basis–could increase relative to those members who do not participate in our DRP, however, because those members' relative ownership interest in us would be
deemed to have decreased.
For further information regarding the tax consequences of participation in our DRP, you should
consult your own tax advisor.
Limitation on Deduction of Losses
There are limitations on an investor's ability to deduct his distributive share of our losses, including the following:
(i) losses will be limited to the extent of the investor's tax basis in his shares; (ii) losses will be limited to the amounts for which the investor is deemed at risk; and (iii) losses will be limited to the investor's
income from passive activities. Deduction of losses attributable to activities not engaged in for profit are also limited.
Tax Basis.
Subject to the other limitations discussed below, an investor may deduct his share of our tax loss to the extent of the
tax basis for his shares. Our losses which exceed his tax basis may be carried over indefinitely and, subject to the limitations discussed below, deducted in any year to the extent his tax basis is increased above zero.
At Risk Rules
. Under Code Section 465, the amount of losses which may be claimed by an individual or a closely-held
corporation from activities such as equipment leasing cannot exceed the amount which the investor has at risk with respect to those activities. A closely-held corporation is a corporation more than 50.0% of which is owned directly or indirectly by
not more than five individuals.
The amount at risk is generally equal to the sum of money invested in the activity. An
investor's at risk amount will be decreased by his share of our losses and distributions. An investor's at risk amount will be increased by his share of our income. An investor will not be considered at risk with respect to nonrecourse
indebtedness.
The total amount of money paid by each investor for his shares will be considered at risk. Indebtedness
incurred in connection with equipment leasing activities is not expected to be considered at risk. Accordingly, you will only be able to deduct your share of our losses under the at risk rules in an amount equal to the purchase price of your shares,
as adjusted for our income, losses and distributions. Any losses in excess of your at risk amount will be treated as a deduction in succeeding taxable years, again subject to the at risk limitations. An investor must recapture previously allowed
losses if the investor's amount at risk at the end of the year is reduced below zero. Even if you can claim our losses under the at risk rules, you are still subject to the other limits on deduction discussed herein.
Under the Code, we will be permitted to aggregate our equipment leasing activities only with respect to equipment placed in service
during the same taxable year. This could limit an investor's deduction for losses with respect to certain equipment, even though the investor must recognize income with respect to other equipment.
Passive Loss Limitation
. Code Section 469 limits the amount of losses that individuals and certain other taxpayers may claim
from an activity in which the taxpayer does not materially participate. Under this limitation,
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net losses from a passive activity may only be deducted against net income from passive activities. Passive activity losses may not be used to offset compensation income or other forms of active
income. Also, passive activity losses may not be used to offset interest, dividends and other forms of portfolio income.
To
the extent that we enter into true leases for federal income tax purposes, our equipment leasing activities will be passive activities. See "–Tax Status of Leases." Our losses from passive activities are considered to be passive
activity losses. Most investors will only be able to deduct their share of our passive activity losses to the extent they have passive income from other sources. Any excess passive activity losses will be suspended and carried forward indefinitely.
Suspended passive activity losses may be used to offset passive activity income in future years. Suspended passive activity losses also may be claimed in full against all types of income if an investor disposes of his interest in the activity in a
fully taxable transaction to an unrelated person.
We may have portfolio income to the extent that our investments constitute
finance leases or secured loans, rather than true leases, or we receive interest on our funds held pending acquisition of equipment. Portfolio income is not considered as income from a passive activity. Therefore, investors may be required to
recognize taxable portfolio income and pay tax thereon in years in which they also are allocated passive losses which cannot be used by them.
The passive loss limitation is applied after the at risk limitation. Thus, if a loss is disallowed under the at risk rules for a particular year, it will not again be disallowed by the passive loss
limitation for that year. Rather, for the year in which the investor becomes at risk in the activity, the suspended at risk loss will become subject to the passive loss limitation.
Tax Status of Leases
Whether a specific lease is categorized as a lease
rather than as a sale or a financing for federal income tax purposes involves a factual determination. Accordingly, no assurance can be given that our leases of equipment will be treated as leases by the IRS. If they are treated as sales or
financings rather than leases, we and the investors would not be entitled to cost recovery deductions with respect to those leases. On the other hand, a portion of the lease rental payments would be deemed to constitute amortization of the financing
or sales proceeds which would not be taxable.
We do not intend to apply to the IRS for a ruling that any leases of equipment
will be treated as leases for federal income tax purposes. Because the terms of the leases have not been determined, no determination has been made about whether our leases will be true leases for federal income tax purposes.
Cost Recovery Deductions
MACRS.
Under the Modified Accelerated Cost Recovery System, or MACRS, the cost of depreciable personal property placed in service
in the U.S. after 1986 may be recovered using specified recovery methods over specified recovery periods. Under MACRS the cost of most recovery property is recovered using the 200% declining balance method. For some recovery property, the 150%
declining balance method is utilized. The recovery periods generally range from 3 to 20 years. Depreciation may not be available for equipment in which we invest indirectly, through total lease return swaps, participation agreements and other
similar transactions. Depreciation will generally not be available for equipment we own subject to full-payout leases or leases considered to be "capital leases" according to IRS guidelines.
The amount by which cost recovery deductions using the 200% declining balance method exceeds the amount that would have been allowed
using the 150% declining balance method will be an item of tax preference or purposes of the alternative minimum tax imposed by Code Section 55. See "Alternative Minimum Tax."
We will allocate all or part of the acquisition fees, which are fees paid to our manager in connection with the selection and purchase of
equipment, to the cost basis of the equipment. We cannot assure you that the IRS will
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agree that cost recovery deductions calculated on a cost basis that includes acquisition fees are properly allowable. The IRS might assert that the acquisition fees are attributable to items
other than the equipment or are not subject to cost recovery at all. If the IRS were successful in making that claim, the cost recovery deductions available to us would be reduced accordingly, which would have the effect of either increasing our
income or reducing our losses. Because the determination of this issue depends on the magnitude and type of services performed for the acquisitions fees, which is presently undeterminable and may vary for each piece of equipment acquired by us, our
counsel is unable to render an opinion about whether our cost recovery deductions would be upheld if challenged by the IRS.
Recapture.
All cost recovery deductions claimed by our investors will be subject to recapture at ordinary income rates upon the
disposition of the equipment or the investor's shares.
Limitations on Cost Recovery Deduction
Property Used Predominately Outside the U.S.
We may own and lease equipment that is used predominately outside the U.S. The cost of
this equipment must be written off for federal income tax purposes using the straight-line method of depreciation over a period corresponding to the equipment's class life, which generally is longer than the recovery periods permitted for other
property. If the equipment does not have a class life, a 12-year period must be used. Even though it will be used predominately outside the U.S., the following types of property, among others, will be eligible for the normal MACRS:
1. aircraft registered in the U.S. that are operated to and from the U.S.;
2. some railroad rolling stock used within and without the U.S.;
3. vessels documented under the laws of the U.S. that are operated in the foreign or domestic commerce of the U.S.; and
4. containers owned by a U.S. taxpayer that are used in the transportation of property to and from the U.S.
To the extent that our equipment is subject to the depreciation rules for property used predominantly outside the U.S., a
member may have to recognize taxable income in greater amounts, or incur less loss, in the early stages of our existence than otherwise would have been the case because the depreciation period is generally longer for property used predominantly
outside the U.S.
Tax-exempt Leasing
. We may lease equipment to tax-exempt entities. Property leased to tax-exempt
entities, called tax-exempt use property, must be written off for federal income tax purposes using the straight-line method of depreciation. The depreciation period is the longer of
•
the equipment's class life, which generally is longer than the normal MACRS recovery periods permitted for property not leased to tax-exempt
entities; or
•
125% of the term of the lease, including all options to renew as well as some successor leases for the equipment.
The definition of a tax-exempt entity includes governmental bodies and tax-exempt governmental instrumentalities, tax-exempt
organizations, some foreign persons and entities and some international organizations. The term also generally includes organizations that were tax-exempt at any time during the five year period before the organization first uses the property
involved. Foreign persons or entities are treated as tax-exempt entities with respect to property if less than 50.0% of the income derived from the leased property is subject to U.S. income tax.
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The tax-exempt use property does not include:
1. property that is used predominantly by a tax-exempt entity in an unrelated trade or business, if the entity pays
unrelated business income tax on the income from the trade or business;
2. property leased to a tax-exempt
entity under a short-term lease, meaning a lease that has a term of either less than one year, or less than 30.0% of the property's class life as long as that is less than three years; and
3. certain high-technology equipment.
In addition, under Code Section 470, losses attributable to the leasing of tax-exempt use property (including property described in items 2 and 3 of the immediately preceding paragraph) cannot be
deducted currently, but must be deferred until there is income derived from the property or when the interest therein is completely disposed of, unless the lease complies with certain requirements. Because these facts depend upon leases that will be
acquired or entered into in the future, no conclusion can be expressed now regarding the possible application of Code Section 470 to leases of property to tax-exempt entities.
If any property is owned by a partnership, or other entity taxed as a partnership such as us, that has both a tax-exempt entity and a
non-exempt person or entity as partners, the tax-exempt entity's proportionate share of the property is treated as tax-exempt use property for purposes of determining the rate of depreciation thereof, and for purposes of the rules under Code
Section 470 discussed above, unless specific requirements relating to the allocation of profits and losses among the partners are met. These requirements will not be met by us. However, the fact that we have exempt organizations as members
should not affect the depreciation deductions for two reasons. First, because substantially all of our taxable income will be treated as unrelated business taxable income in the hands of employee benefit plans and other tax-exempt investors, the
property should not constitute tax-exempt property with respect to those tax-exempt investors. See "–Investment by Employee Benefit Plans and Other Tax-Exempt Organizations." Therefore, we do not anticipate that the depreciation and
Code Section 470 loss limitations applicable to tax-exempt use property will be material as they relate to equipment owned by us and not leased to or used by a tax-exempt entity.
In summary, to the extent that our equipment is subject to the depreciation rules for tax-exempt use property, the longer depreciation
period for that equipment will cause the annual depreciation deduction for the property to be smaller, but continue longer, than otherwise would have been the case under MACRS, thereby increasing net income, or reducing net loss, with respect to
that property in our early years, and reducing net income, or increasing net loss, in our later years. Further, to the extent that losses attributable to tax-exempt use property are suspended under Section 470, taxable net income is greater, or
net loss is less, during the period of suspension.
Deductibility of Management Fees
We will pay asset management fees for services to be rendered by the manager. We intend to deduct those fees as ordinary and necessary
business expenses incurred in the operation of a trade or business. The characterization by us of those expenses may be subject to close scrutiny by the IRS to determine whether they represent expenses that are currently deductible, rather than
capital expenditures or expenditures which cannot provide any present or future tax benefit.
The manager will take the
position that the fee paid to it is incurred in connection with the operation of a "trade or business." Since there are factual and legal questions involved in determining the proper characterization, valuation, timing and current
deductibility of the foregoing items, there can be no assurance that the IRS will not attempt to challenge those deductions or their availability to the investors, and that the challenge, if made, will not be successful. For example, the IRS could
take the position that the fee paid to the manager was not incurred in connection with a "trade or business" and thus, when allocated as an expense to the investors will be subject to the 2.0% floor imposed on miscellaneous itemized
deductions of individuals.
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Tax Liabilities in Later Years
It is possible that after some years of operation an investor's tax liabilities may exceed cash distributions to him in corresponding
years. This situation would typically arise if our nondeductible loan amortization payments on our equipment exceeded our depreciation deductions. It is possible in this situation that an investor's tax liabilities could exceed cash
distributions. If so, the excess would be a nondeductible out-of-pocket expense to an investor.
Sales or Exchanges of Our Property
On the disposition of leased equipment, we will realize gain in an amount equal to the proceeds received minus the basis
in the leased equipment. As a result of cost recovery deductions, most equipment is expected to have a zero basis. Disposition proceeds include the amount of any debt encumbering the property. Consequently, the amount of tax payable by an investor
as a result of the disposition may exceed his share of the cash proceeds from the disposition. In the event of a foreclosure of a debt on our property, we would realize gain equal to the excess of the indebtedness over our adjusted tax basis in the
property. In that event the investors would realize taxable income although they may not receive any cash distributions as a result of the foreclosure.
Before any gain that we may realize on the sale of an asset can be treated as capital gain, the asset must be either a capital asset or Section 1231 property in our hands. Inventory or other property
held by a taxpayer primarily for sale to clients in the ordinary course of its business are not included in these types of property. We expect to acquire and dispose of many assets many times throughout our term and will sell or otherwise dispose of
equipment, leases and secured loans. We may purchase some equipment for resale rather than lease. Whether we can treat any gains on these sales as capital gains will depend on the facts and circumstances at the time of each sale. Because this is an
inherently factual determination which depends, in part, on how many sales we make, no conclusion can be made about whether the gains on sales will be capital gains.
Even if the assets sold were Section 1231 property in our hands, since equipment is tangible personal property when it is sold, all cost recovery or depreciation deductions we previously have taken
with respect to the equipment sold will be recaptured as ordinary income to the extent we realize gain on the sale. Recapture means that we must treat as ordinary income a portion or all of any gain we may realize from the sale of our equipment that
otherwise would be treated under the Code as capital gain. Recapture cannot be avoided by holding the equipment for any specified period of time. In addition, if we sell assets on an installment basis, we must recognize all deprecation and cost
recovery recapture, if any, as ordinary income at the time of sale, even though we receive the payments in later taxable years.
Also, certain gains and losses are grouped together under the Code to determine their tax treatment. For example, gain on the sale or
exchange of Section 1231 property, that is, equipment used in a trade or business and held for more than one year, is added to gain from certain compulsory or involuntary conversions of similar property. If these gains exceed the losses from
the sales, exchanges, and conversions of similar equipment, the excess gains will be taxed as capital gains, subject to the general rules of recapture of cost recovery and depreciation deductions as ordinary income, as described above, and a special
recapture rule described below. If the losses exceed the gains, however, the excess losses will be treated as ordinary losses.
Under a special recapture rule, any net gain will be treated as ordinary income rather than as capital gain if we have non-recaptured net
losses from the five preceding taxable years. Based on our intended activities and the recapture rules discussed above, you should anticipate that substantially all, if not all, of any gain we realize on the sale or other taxable disposition of our
equipment, but not necessarily any finance leases and secured loans sold during the maturity period, will be treated as ordinary income for income tax purposes, rather than capital gain.
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Disposition of Shares
The amount of gain which an investor will realize upon the disposition of his shares, including a redemption or repurchase of the shares by us, will equal the excess of the amount realized by the investor
over the investor's tax basis in the shares. Conversely, the amount of loss which an investor will realize upon the disposition of his shares will equal the excess of the investor's tax basis over the amount realized for the shares. The
amount realized on the sale of the shares will include an amount equal to the investor's share of any of our liabilities. As a result, a disposition of shares may result in a tax liability in excess of the cash proceeds.
This gain or loss generally will be capital gain or loss if the shares are a capital asset in the hands of the investor. However, any
gain realized on the disposition of shares by an investor which are attributable to unrealized receivables or inventory items will be treated as ordinary income and taxed at ordinary income rates. Unrealized receivables would include the
investor's share of our previous equipment cost recovery deductions. An investor must recognize the cost recovery recapture in the year of disposition, regardless of the amount of proceeds received in the year of disposition. Based on our
intended activities and the substantial amount of recapture likely to be attributable to each investor, you should anticipate that substantially all, if not all, of the gain on the disposition of your shares will be treated as ordinary income for
income tax purposes, rather than capital gain.
We anticipate that funds used to redeem or repurchase shares will be payable
out of cash flow that otherwise would be available for distribution to all members or for reinvestment in additional equipment. Accordingly, while any redemption or repurchase of shares would decrease the aggregate number of shares outstanding, and
thereby proportionally increase each remaining member's distributive share of our income, gain, loss and deductions, it may also reduce the total amount of cash available for investment or reinvestment.
Although proposed regulations under Code Section 707, dealing with so-called "disguised sales" of partnership interests
have been withdrawn, you should be aware that Treasury continues to study the subject of disguised sales and may again adopt regulations which, could cause contributions by members, including reinvestment by members of distributions received from us
pursuant to the DRP, to be combined with a redemption or repurchase by us of another member's shares and treated as if the two transactions were a sale by the redeemed member of shares to the contributing member.
You must notify us of any proposed sale or exchange of your shares before we will treat the sale or exchange as effective. See
"–Classification as a Partnership." Assuming that the sale or exchange is effectuated, we are required to inform the IRS, the buyer and you of the fair market value of the allocable share of our unrealized receivables and appreciated
inventory attributable to the shares you sold or exchanged, which must be treated as ordinary income by you as discussed above. Our written report to you and the buyer must be made by January 31 following the calendar year of the sale. If you
fail to timely notify us of the sale or other transfer of your shares, the IRS will penalize you $50 per sale.
Our Liquidation
Our operating agreement provides that our assets will be sold upon our liquidation. The sale proceeds will be distributed
pursuant to the terms of the operating agreement. Each investor will realize his share of the gain or loss on the sale of our assets. See "–Sales or Exchanges of Our Property." In addition, each investor will recognize gain or loss
measured by the difference between the cash he receives in liquidation and the adjusted tax basis of his shares. The cash an investor receives will include the cash constructively received as a result of relief of liabilities. Gain or loss
recognized generally will constitute capital gain or loss. However, gain attributable to the recapture of equipment cost recovery deductions will be taxable as ordinary income. See "–Sales or Exchanges of Our Property." It is
anticipated that all or substantially all of any gains will be attributable to those deductions and taxed as ordinary income.
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Elections
Code Section 754 permits an entity such as us to elect to adjust the tax basis of our property:
•
upon the transfer of shares by sale or exchange or on the death of a holder, and
•
upon the distribution of property by the entity to a holder.
This is known as a Section 754 election. If we were to make a Section 754 election, then transferees of shares would be
treated, for the purpose of depreciation and gain, as though they had acquired a direct interest in our assets. Furthermore, if we have substantial built-in losses, we would be required to make the foregoing adjustments. In the case of transfers of
shares by sale or exchange or upon death, substantiality is judged based on a dollar amount ($250,000) at the entity level. Considering our size, even a small percentage loss in value may trigger a mandatory adjustment.
A Section 754 election is complex. A Section 754 election increases the expense of tax accounting. As a result, the manager
does not intend to cause us to make a Section 754 election, unless required to do so. If not, then an investor may have greater difficulty in selling his shares because the transferee of the shares would obtain no current tax benefits from
purchasing the shares to the extent the purchase price exceeds your allocable share of our basis in our assets.
The Code
includes other elections, and we may make other elections for federal tax reporting purposes which could result in various items of income, gain, loss, deduction and credit being treated differently for tax purposes than for accounting purposes.
Investment by Employee Benefit Plans and Other Tax-Exempt Organizations
Employee benefit plans, such as qualified pension and profit sharing plans, Keogh plans and IRAs are generally exempt from federal income
tax. However, the amount of any unrelated business taxable income, or UBTI, less directly connected allowable deductions, that exceeds a specific deduction of $1,000 in any taxable year is subject to an unrelated business tax. Other charitable and
tax-exempt organizations in addition to those listed above may also be subject to tax. UBTI includes gross income derived from a business not substantially related to the purpose which forms the basis for the entity's tax-exempt status, less
the deductions allowed which are directly connected with the carrying on of the business. UBTI generally excludes dividends, interest and gains from the sale of property and all deductions directly connected with that income unless they are derived
from debt-financed property. We will be engaged primarily in the business of equipment leasing and any taxable income from leasing equipment will constitute UBTI regardless of whether the equipment is debt-financed.
A portion of the gain from the sale of equipment which is debt-financed property also will be included in the unrelated business income
of a tax-exempt entity. Debt-financed property is defined as any property which is held to produce income and with respect to which there is an acquisition indebtedness at any time during the taxable year. Acquisition indebtedness is defined as the
unpaid amount of (i) indebtedness incurred by the organization in acquiring the property, (ii) indebtedness incurred before the acquisition of the property if the indebtedness would not have been incurred but for the acquisition, and
(iii) indebtedness incurred after the acquisition of the property if the indebtedness would not have been incurred but for the acquisition and the incurrence of indebtedness was reasonably foreseeable at the time of the acquisition. Given our
intent to debt finance our equipment acquisitions, a portion of the gain from the sale of equipment by us will be UBTI. A tax-exempt entity will be required to include as UBTI an amount that is equal to its share of the total gross income from the
property multiplied by the average acquisition indebtedness associated with the property for the taxable year divided by the average adjusted basis for the property for the taxable year. Accordingly, prospective investors that are tax-exempt
entities should consult their tax advisors concerning the possible federal, state and local income and other tax consequences resulting from an investment in us.
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Notwithstanding the preceding, a charitable remainder trust that recognizes UBTI will be
subject to an excise tax equal to 100% of that income. Any tax due should be paid directly from the tax-exempt entity. Payment of the tax by the beneficiary could have other adverse tax consequences.
All tax-exempt entities are urged to obtain the advice of a qualified tax advisor on the effect of an investment in shares.
Alternative Minimum Tax
With limited exceptions, taxpayers must pay an alternative minimum tax if it exceeds the taxpayer's regular federal income tax for
the year. For noncorporate taxpayers, the alternative minimum tax is imposed on alternative minimum taxable income, or AMTI, that is above an exemption amount. AMTI generally is taxable income, plus or minus various adjustments, plus tax preference
items.
Some of the principal adjustments to taxable income that are used to determine AMTI are summarized below.
•
Depreciation deductions may not exceed deductions computed using the 150% declining balance method, unless the property qualifies for bonus
depreciation as discussed below.
•
Miscellaneous itemized deductions are not allowed.
•
Medical expenses are deductible only to the extent they exceed 10.0% of adjusted gross income.
•
State and local income, property and general sales taxes are not deductible unless they are deductible in computing adjusted gross income.
•
Interest deductions are restricted.
•
The standard deduction and personal exemptions are not allowed.
•
Only some types of operating losses are deductible.
•
Different rules under the Code apply to incentive stock options that may require earlier recognition of income.
The principal partnership tax items that may have an impact on your AMTI as a result of investing in us are (1) cost recovery
deductions on the portion of our equipment leased to others under operating leases, which generally will be computed for regular federal income tax purposes using the 200% declining balance method, but will be computed for alternative minimum tax
purposes using the 150% declining balance method, except any equipment eligible for bonus depreciation, and (2) deductions relating to our interest expense on borrowings.
Because the impact of the alternative minimum tax is dependent upon each investor's particular tax situation, each prospective investor is urged to consult his own tax adviser as to the effect an
investment in us will have on the calculation of his alternative minimum tax liability.
Tax Returns and Tax Information
We will use the accrual method of accounting. We will adopt the calendar year as our tax year. Our operating agreement requires us to
provide tax information to the investors within 75 days after the close of each tax year. Some investors may be required to file their tax returns on or before March 15. If so, they may have to obtain an extension to file.
Each investor must file his tax return either consistently with the information provided on our informational return or in a manner which
notifies the IRS of any inconsistency. Otherwise, the IRS could automatically assess and collect the tax, if any, attributable to the inconsistent treatment.
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An investor will be required to inform us of the sale or exchange of his shares within
the earlier of 30 days of the transaction or January 15 of the calendar year following the calendar year in which the transaction occurs.
We will be required to inform the IRS of each transfer. Our failure or the failure of an investor or
to file these notices may result in substantial penalties. We also must inform both the seller and the buyer of shares of the proportionate interest of the transferred shares in our unrealized receivables and inventory items. This notification must
be made prior to February 1 of the calendar year following the calendar year in which the transaction occurs.
Audit of Tax Returns
The IRS could audit our tax information returns. Any audit could result in the audit of an investor's tax return. An
audit of an investor's return could result in adjustments to items related to us as well as items not related to us.
The
Code treats a partnership as a separate entity for purposes of audit, settlement and judicial review. Thus, the IRS may audit and make a single determination of the propriety of a partnership's treatment of partnership tax items at the
partnership level. In general, a partnership's tax matters partner represents the partnership and its partners in the event of an audit of the partnership's tax returns. The manager is our tax matters partner. All partners are nevertheless
entitled to participate in an audit and each partner may enter into a settlement agreement on his own behalf with the IRS.
If
the IRS proposes any adjustments to the tax returns filed by us or an investor, substantial legal and accounting expenses and deficiency interest and penalties may be incurred. We will not bear any expense that may be incurred by an investor in
connection with the adjustments or audit of the investor's returns.
Our manager has the authority to conduct, on our
behalf and on behalf of our investors, all examinations by tax authorities relating to us at our expense. A tax controversy could result in substantial legal and accounting expenses being charged to us, even if the outcome is favorable.
Tax Shelters and Reportable Transactions
"Material advisers" to "reportable transactions" are required to file an information return for each reportable transaction. A "material advisor" is a person who
(i) provides material aid, assistance or advice in organizing, managing, promoting, selling, implementing, carrying out or insuring a reportable transaction, and (ii) derives gross income in excess of $250,000 or another amount as
prescribed by the Treasury Department. In addition, taxpayers must report on their individual returns or statements any information with respect to a reportable transaction which is required under Section 6011 of the Code.
Under current Treasury Regulations, a "reportable transaction" is one which satisfies any of the following:
(a) A listed transaction, which is a transaction that is the same as or substantially similar to a type of transaction that the IRS has
identified by notice, regulation or other form of published guidance, to be a tax avoidance transaction.
(b) A confidential
transaction, which is one that is offered by an advisor who places a limitation on disclosure by the taxpayer of the tax treatment or tax structure of the transaction and the limitation on disclosure protects the confidentiality of the
advisor's tax strategies.
(c) A transaction with contractual protection, which is one for which the taxpayer or a
related party has the right to a full or partial refund of fees if all or part of the intended tax consequences from the transaction are not sustained.
(d) A loss transaction, which is any transaction resulting in the taxpayer claiming a loss under Code Section 165 of at least (1) $10,000,000 in any single year or $20,000,000 in any combination
of years for corporations; (2) $10,000,000 in any single year or $20,000,000 in any combination of years for partnerships that
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have only corporations as partners, or $2,000,000 in any single year or $4,000,000 in any combination of years for all other partnerships; (3) $2,000,000 in any single year or $4,000,000 in
any combination of years for individuals, S corporations, or trusts; or (4) $50,000 in any single year for individuals or trusts if the loss arises from foreign currency transactions.
(e) A transaction of interest, which is a transaction that is the same or substantially similar to the transactions that the IRS has
identified as such by notice, regulation or other form of published guidance.
The IRS has identified as listed transactions
two lease arrangements, which are lease stripping transactions and purported sale and leaseback transactions. The manager does not expect that any of its leasing transactions will be the same as or similar to the listed transactions. We may enter
into sale and leaseback transactions but we intend to avoid the features that would cause our sale and leaseback transactions to be the same or similar to the listed transactions. However, a leasing transaction could be a reportable transaction if
the loss thresholds described above in subsection (d) are exceeded. If so, the transaction would be subject to the disclosure requirements above. The manager will monitor this situation.
Penalties and Interest
The penalty for a taxpayer's failure to
disclose a reportable transaction is $10,000 for a natural person and $50,000 for other persons, provided that for reportable transactions which are listed transactions, the foregoing amounts are increased to $100,000 and $200,000, respectively.
These amounts are payable whether or not the transaction results in an underpayment of tax. In addition to any monetary penalty for failure to report, taxpayers subject to the reporting requirements of the Securities and Exchange Act of 1934, as
amended, or the Exchange Act, would be required to disclose in those reports the failure to report the reportable transaction, as well as any understatement penalty or gross valuation misstatement penalty, as described below, that result from the
failure to report the listed or reportable transaction.
Additionally, Section 6662 of the Code provides for uniform
penalties at a flat rate of 20.0% in cases of negligence, substantial underpayments of tax and substantial valuation overstatements. In particular, a penalty may be imposed on any "substantial understatement of tax liability" equal to
20.0% of the amount of the underpayment of tax attributable to the understatement. For an individual, substantial understatement occurs when the understated tax liability exceeds the lesser of 10.0% of the correct tax required to be shown on the
return or $5,000.
If we are found to be a "tax shelter" for purposes of Section 6662, the penalty under
Section 6662 would be operative unless, as required by Code Section 6664, there was reasonable cause for taking the position relating to the understatement and we acted in good faith with respect to that position. For this purpose, a
"tax shelter" includes a partnership if a significant purpose of the partnership is the avoidance or evasion of federal income tax. The manager does not believe that our principal purpose is or will be the avoidance or evasion of federal
income tax.
More stringent reasonable cause and good faith rules of new Section 6662A apply in the case of an
understatement resulting from an inadequately disclosed listed transaction or reportable transaction. Taxpayers who do not adequately disclose the transaction would not be eligible for the reasonable cause exception and would be subject to a strict
liability penalty equal to 30.0% of the understatement.
Interest rates for an underpayment of tax are set quarterly at the
federal short-term rate plus 3.0%, compounded daily, except that the interest rate is set at the federal short-term rate plus 5.0% in the case of certain underpayments of tax by a C corporation. The Code provides that interest will be imposed on
penalties from the due date of the return (without regard to extensions) which gave rise to the penalty.
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Deductions for Organization and Offering Expenses; Start-Up Costs
The costs of our organization and the sale of our shares, as well as other start-up costs, generally may not be deducted in the year they
are incurred; rather, they must be capitalized. Organization expenses and start-up costs may be deducted on a limited basis, up to $5,000, in the year incurred. However, this $5,000 amount is reduced, but not below zero, by the amount by which the
cumulative cost of the expenditures exceeds $50,000. The remainder of the start-up costs can be amortized over a period of 180 months. If we are liquidated before the end of the 180 month amortization period, the unamortized balance may be deducted
as a loss under Section 165.
Syndication expenses, which are the costs incurred to promote or effect the sale of our
shares, are non-deductible, must reduce members' capital accounts when incurred and give rise to a tax offset, if at all, only upon our liquidation and then, in most cases, only as a capital loss. Syndication expenses include brokerage fees
such as the dealer manager fee and the selling commissions provided for in our operating agreement; registration and filing fees with the SEC and each state in which our shares are sold; our legal fees for securities advice and advice concerning the
adequacy of tax disclosures in the offering materials; accounting fees for the preparation of information to be included in the offering materials; printing and reproduction costs; and other selling or promotional expenses.
We will endeavor to treat our organization, start-up and syndication costs in accordance with the foregoing rules. There is uncertainty,
however, about the distinction between trade or business expenses that may be currently deducted and organization start-up and syndication costs that must be capitalized or deferred. Because of this uncertainty, the IRS could challenge the current
deduction of some of our expenses on the grounds that the expenses are not deductible in the year incurred. Under our operating agreement, brokerage fees and underwriting commissions are also allocated to those members with respect to whose purchase
of shares those commissions and fees were paid. Other syndication expenses will be allocated, to the extent possible, in equal amounts per share. If equality is not possible, our manager may make compensating allocations of items of income or loss
to achieve the same effect on capital accounts.
Foreign Tax Considerations for U.S. Investors
Rental income and interest received by us from sources in foreign countries could be subject to withholding and/or income taxes imposed by
those countries. In addition, gains on the sale of equipment may also be subject to taxes in foreign countries where we sell equipment. Tax treaties between some countries and the U.S. may reduce or eliminate those taxes. Our foreign activities,
however, may require you to file tax returns in foreign countries. We cannot predict what tax rate our income will be subject to in other countries, because we do not know the extent of our business in foreign countries. We intend, whenever
possible, to pay any foreign taxes and file any foreign tax returns at the entity level and thereby reduce the compliance burden on you.
We will inform you of your proportionate share of any foreign income and the foreign taxes, if any, paid by us. You will then be required to include these items on your tax return. At your option, you
generally will be entitled to claim either a credit, subject to the limitations discussed below, or, if you itemize your deductions, a deduction, subject to the limitations generally applicable to deductions, for your share of foreign taxes in
computing your federal income taxes.
Generally, a credit for foreign taxes may not exceed the federal tax liability
attributable to your total foreign-source taxable income. Several limits apply to the foreign tax credit. For example, the credit is applied separately to different types of foreign-source income, including foreign-source passive income like
interest income, and special limits also apply to income from the sale of capital assets. Because of these limits, you may be unable to claim credit for the full amount of your proportionate share of the foreign taxes attributable to our income. In
addition, any foreign losses generated by us could reduce the tax credits available to you from foreign-source income unrelated to us. The foregoing is only a general description of the foreign tax credit under current law. Since the availability of
a credit or deduction depends on your particular circumstances, we advise you to consult your own tax advisor.
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Self-Employment Tax
You should be aware that under Code Section 1402(a)(13), limited partners in limited partnerships are generally not subject to self-employment tax with respect to their distributive share of income
or loss of a limited partnership, other than with respect to guaranteed payments to that partner for services actually rendered to or on behalf of the partnership. However, the Code section does not deal expressly with respect to the treatment of
members of limited liability companies for purposes of the self-employment tax. In 1997, the IRS promulgated proposed regulations to define when a partner in a partnership or member of a limited liability company should be considered to be a limited
partner for purposes of this exclusion from the self-employment tax. Under those proposed regulations, members who do not have personal liability for limited liability company debts, the authority under the laws of the state of formation to contract
on behalf of the limited liability company, or otherwise do not participate in its activities would not be subject to the self-employment tax. However, the proposed regulations are not yet effective and Congress, in response to complaints from the
business community in 1997, imposed a one-year moratorium on their effective date. We expect to follow the rules set forth in these proposed regulations and intend to take the position that a member's distributive share of our income is not
self-employment income on the K-1 distributed to such member unless the member has personal liability for our debts, has the authority to contract on our behalf, or otherwise participates in the conduct of our business activities. However, it is
possible that the IRS could take a contrary position. Interest holders should consult with their tax advisors.
Interest Expense
In general, interest paid in connection with investment activities is deductible only against investment income. Interest
paid in connection with investments in passive activities, such as an investment in our shares, may only be deducted in accordance with the rules for losses derived from passive activities, except to the extent allocable to portfolio income. See
"–Limitations on Deduction of Losses." Interest paid by us likely will be treated as passive activity interest, as would any interest expense you incur on money borrowed to purchase shares.
State and Local Taxes
In addition to the federal income tax considerations described above, prospective investors should consider applicable state and local
taxes which may be imposed by various jurisdictions. Investors may be subject to state tax rules which are less favorable than federal tax rules.
An investor's distributive share of our income, gain or loss will be required to be included in determining his reportable income for state or local tax purposes in the jurisdiction in which he is a
resident. Moreover, other states in which we may do business require nonresident investors to file tax returns in those states and pay tax on the pro rata share of our income derived from those states. Any tax losses associated with an investment in
us from operations in one state may not be available to offset income from other sources taxable in a different state. To the extent that you pay tax to a state by virtue of our operations within that state, you may be entitled to a deduction or
credit against tax owed to your state of residence with respect to the same income. Payment of state and local taxes will constitute a deduction for federal income tax purposes, assuming that you itemize deductions.
Several states have adopted a withholding tax procedure in order to facilitate the collection of taxes from nonresident and foreign
investors. Any amounts withheld would be deemed to be a distribution to the investor. The deemed distribution would decrease the amount of any actual subsequent distribution. Investors may be allowed a credit for the amount withheld against any
income tax imposed by their state of residency. We cannot estimate the percentage of our income that will be from states which have adopted those withholding tax procedures. Therefore, we cannot estimate the required withholding tax, if any.
We intend to pay state taxes and file state tax returns at the entity level whenever possible. We may, however, undertake
business activities in states that do not permit state taxes to be paid at the entity level or only permit the state taxes to be paid at the entity level with respect to nonresidents of that state.
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Estate or inheritance taxes might be payable in any of the jurisdictions outlined above upon
the death of an investor. We advise you to consult your own tax advisor to determine the effect of state and local taxes, including gift and death taxes as well as income taxes, which may be payable in connection with this investment.
Need for Independent Advice
The foregoing summary is not intended as a substitute for careful tax planning. The income tax consequences associated with an investment in us are complex and certain of them will not be the same for
all taxpayers. Accordingly, each prospective purchaser of shares is strongly urged to consult his own tax advisors with specific reference to his own tax situation.
ERISA CONSIDERATIONS
In considering an
investment in us of a portion of the assets of a qualified pension or profit-sharing plan, fiduciaries should consider whether the investment:
•
is in accordance with the documents and instruments governing the plan;
•
satisfies the diversification requirements of ERISA, if applicable;
•
will result in unrelated business taxable income to the plan; and
•
provides sufficient liquidity and is otherwise prudent.
Prohibited Transactions Under ERISA and the Code
Section 4975 of the
Code (which applies to all qualified plans and IRAs) and Section 406 of the Employee Retirement Income Security Act of 1974, as amended, or ERISA (which does not apply to IRAs or to certain qualified plans that are not subject to ERISA's
fiduciary rules) prohibit qualified plans and IRAs from engaging in certain transactions involving "plan assets" with parties that are "disqualified persons" under the Code. "Disqualified persons" include fiduciaries of
the qualified plan or IRA, officers, directors, shareholders and other owners of the company sponsoring the qualified plan and natural persons and legal entities sharing certain family or ownership relationships with other "disqualified
persons."
"Prohibited transactions" include any direct or indirect transfer or use of a qualified plan's
or IRA's assets to or for the benefit of a disqualified person, any act by a fiduciary that involves the use of a Qualified Plan's or IRA's assets in the fiduciary's individual interest or for the fiduciary's own account,
and any receipt by a fiduciary of consideration for his or her own personal account from any party dealing with a qualified plan or IRA. Under ERISA, a disqualified person that engages in a prohibited transaction will be required to disgorge any
profits made in connection with the transaction and will be required to compensate any qualified plan that was a party to the prohibited transaction for any losses sustained by the qualified plan. Section 4975 of the Code imposes excise taxes
on a disqualified person that engages in a prohibited transaction with a qualified plan or IRA. Section 408(e)(2) of the Code provides that an IRA will cease to be an IRA and will be treated as having immediately distributed all of its assets,
if it engages in a prohibited transaction.
Plan Assets
If our assets were determined under ERISA or the Code to be "plan assets" of qualified plans and/or IRAs holding shares, fiduciaries of those qualified plans and IRAs might under certain
circumstances be subject to liability for actions taken by the manager or its affiliates and certain of the transactions described in this prospectus in which we might engage, including certain transactions with our affiliates, might constitute
prohibited transactions under the Code and ERISA with respect to those qualified plans and IRAs, even if their acquisition of shares did not originally constitute a prohibited transaction. Moreover, qualified plans (other than IRAs) might be deemed
to have delegated their fiduciary responsibility to the manager in violation of ERISA.
In some circumstances ERISA and the
Code apply a "look-through" rule under which the assets of an entity in which a qualified plan or IRA has invested may constitute "plan assets" and the manager of the entity becomes
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a fiduciary to the qualified plan or IRA. The manager of Macquarie Equipment Leasing Fund Two, LLC is Macquarie Asset Management Inc. ERISA and the Code, however, exempt from the look-through
principle investments in certain publicly registered securities and in certain operating companies, as well as investments in entities not having significant equity participation by benefit plan investors. Under the Department of Labor's
current regulations regarding what constitutes the assets of a qualified plan or IRA in the context of investment securities, such as our shares, undivided interests in the underlying assets of a collective investment entity such as us will not be
treated as plan assets of qualified plan or IRA investors if either:
•
our shares are publicly offered;
•
less than 25% of any class of our shares are owned by qualified plans, IRAs and certain other employee benefit plans; or
•
we are an operating company.
United States Department of Labor regulations ("DOL Regulations") define a publicly-offered security as a security that is "widely held," "freely transferable," and either
(a) be part of a class of securities registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 or (b) sold as part of a public offering pursuant to an effective registration statement under the Securities Act of
1933 and registered under the Securities Exchange Act of 1934 within 120 days after the end of our fiscal year during which our offering occurred. Our shares are being sold as part of an offering registered under the Securities Act of 1933, and we
intend to register our shares under the Securities Exchange Act of 1934.
The DOL Regulations provide that a security is
"widely held" only if it is part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another. However, a class of securities will not fail to be "widely held" solely because the
number of independent investors falls below 100 subsequent to the initial public offering as a result of events beyond the issuer's control. We anticipate our shares will be "widely held."
The DOL Regulations provide that whether a security is "freely transferable" is a factual question to be determined on the
basis of all the relevant facts and circumstances. The DOL Regulations further provide that when a security is part of an offering in which the minimum investment is $10,000 or less, as is the case with this offering, certain restrictions ordinarily
will not affect, alone or in combination, the finding that such securities are freely transferable. We believe that the restrictions imposed under our operating agreement on the transfer of our shares are limited to restrictions on transfer
generally permitted under the DOL Regulations and are not likely to result in the failure of the common stock to be "freely transferable." See "Summary of Our Operating Agreement—Transfer of Our Shares and Substitute
Members." The DOL Regulations only establish a presumption in favor of a finding of free transferability and, therefore, no assurance can be given that the DOL, the U.S. Treasury Department or a court would not reach a contrary conclusion with
respect to our shares.
Assuming that our shares are "widely held" and "freely transferable," we believe
that our shares are publicly-offered securities for purposes of the DOL Regulations and that our assets would not be deemed to be "plan assets" of any Plan that invests in our shares.
Governmental plans and certain church plans (as defined in ERISA) are not subject to ERISA or the prohibited transaction provisions under
Section 4975 of the Code. However, state laws or regulations governing the investment and management of the assets of such plans may contain fiduciary and prohibited transaction requirements similar to those under ERISA and the Code.
Acceptance of a subscription on behalf of a Plan is in no respect a representation by us or any other Person that an
investment in our shares meets all relevant legal requirements with respect to investments by the Plan or that such investment is appropriate for the Plan. Any prospective investor that is a Plan should consult its own advisers with respect to the
provisions of ERISA, the Code and any governing state or other law that may apply with respect to an investment in our shares.
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Other ERISA Considerations
In addition to the above considerations in connection with the "plan asset" question, a fiduciary's decision to cause a qualified plan or IRA to acquire shares should involve, among other
factors, considerations that include whether:
•
the investment is in accordance with the documents and instruments governing the qualified plan or IRA,
•
the purchase is prudent in light of the potential difficulties that may exist in liquidating shares,
•
the investment will provide sufficient cash distributions in light of the qualified plan's likely required benefit payments,
•
after an acquisition of shares, the qualified plan's investments taken as a whole are sufficiently diversified so as to minimize the risk of large
losses,
•
the investment is made solely in the interests of plan participants, and
•
the fair market value of shares will be sufficiently ascertainable, with sufficient frequency, to enable the qualified plan to value its assets on an
annual basis in accordance with the qualified plan's rules and policies.
Prospective qualified plan
investors should note that, with respect to the diversification of assets requirement, the legislative history of ERISA and a Department of Labor advisory opinion indicate that in determining whether the assets of a qualified plan that has invested
in an entity such as us are sufficiently diversified, it may be relevant to look through the qualified plan's interest in the entity to the underlying portfolio of assets owned by the entity, regardless of whether the entity's underlying
assets are treated as "plan assets" for the purpose of ERISA's and the Code's prohibited transaction and other fiduciary duty rules.
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SUMMARY OF OUR OPERATING AGREEMENT
As described elsewhere in this prospectus, prospective investors will be purchasing shares and, after the acceptance of their
subscription for shares and our receipt of the minimum offering amount, will be admitted to our fund as members in accordance with the terms of our operating agreement. The rights of our members, including their rights to profits, losses and cash
distributions from us, are set forth in our operating agreement, which is included in its entirety as Appendix A to this prospectus.
Each prospective member should read and become familiar with the operating agreement. The following statements supplement other statements in this prospectus concerning the operating agreement and
summarize provisions of the operating agreement which describe certain of the members' rights, privileges, duties and responsibilities. The following summary describes all the material provisions of our operating agreement, though it is not
complete, and prospective investors are urged to read the operating agreement in its entirety before making a decision about an investment in us.
General Provisions of Our Operating Agreement
Organization.
We are
a Delaware limited liability company formed on January 19, 2010. Our existence will terminate on December 31, 2030, unless we are sooner dissolved. See "–Dissolution and Winding-Up."
Nature and Purpose
. We have been organized for the purposes of, among other things, acquiring, investing in, purchasing, owning, leasing, hiring,
renting, financing, selling, trading, transferring or otherwise disposing of equipment and any other type of direct or indirect interest in equipment and leases of all kinds and purchasing equity interests in equipment-owning entities or entities
owning direct or indirect interests in equipment and undertaking all activities incidental to or in connection with the foregoing purposes.
Members and Capital
Contribution of Initial Member
. Our manager has contributed $2,000, in cash, as its capital contribution to us.
Contributions of Other Members
. With limited exceptions, each member must purchase a minimum of 500 shares at a purchase price, in
cash, of $10.00 per share. The amount paid by a member for his shares will constitute that member's capital contribution to us. A separate capital account will be established and maintained for each member.
Management
Our
Manager's Powers.
Subject to the terms and conditions of the operating agreement, the manager, on behalf of our members, will have the sole and exclusive right and authority to manage and control our business and affairs. Our manager will
possess all rights and powers of a "manager" of a limited liability company as provided in the Delaware Act and otherwise by law. Our manager must provide the personnel and services as it may deem necessary or appropriate to conduct our
business activities and the day-to-day management of our assets. Under Delaware law, our manager has duties of due care and fair dealing in acting for us and handling our affairs. With some limitations, our manager may employ the services of any
person, including its affiliates, to assist in its managerial duties and may compensate all of those persons from our assets at rates that it deems fair and reasonable. Our manager will act as our tax matters partner and will have the power to
settle tax disputes with the IRS that would bind us and our members.
Limitations on Our Manager's Powers.
Our
manager may not take any action prohibited by our operating agreement or by the Delaware Act. Under our operating agreement, our manager may not:
•
Operate us in a manner which causes us to be deemed an "investment company" as that term is defined in the Investment Company Act of 1940, as
amended.
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•
Enter into contracts that would bind us after the expulsion, adjudication of bankruptcy or insolvency of a manager, or continue our business with our
assets after the occurrence of any of those events.
•
Alter our primary purpose without the consent of members holding a majority of our shares.
•
Engage in any transaction with us, or permit any of its affiliates to engage in a transaction with us, that would circumvent the provisions of our
operating agreement, or circumvent the restrictions in our operating agreement against our dealing with the manager and its affiliates, or that would make it impossible to carry on our ordinary business.
•
Confess a judgment against us in connection with any threatened or pending legal action.
•
Possess any of our equipment or assign our rights in specific equipment other than for our purposes.
•
Except in limited circumstances, commingle our funds with the funds of any other person.
•
Receive any rebates or give-ups or participate in any reciprocal business arrangement that would circumvent the provisions of our operating agreement,
or circumvent the restrictions therein against dealing with the manager and its affiliates.
•
Except for the dealer manager fee, the selling commissions or any other amounts permitted under the operating agreement, directly or indirectly pay or
award any commissions or other compensation to any person engaged by a potential investor for investment advice as an inducement to that advisor to advise the purchase of shares.
•
Cause us to incur any indebtedness wherein the lender would have or acquire any direct or indirect interest in our profits, capital or property other
than as a secured creditor or incur any indebtedness specifically for the purpose of funding distributions.
•
Cause us to exchange shares for property other than cash.
•
Cause us to make investments in other programs or joint ventures with non-affiliates unless the non-affiliates own and operate specific equipment.
•
Cause us to make investments in joint ventures with other programs sponsored by our manager unless the following conditions are met:
•
the programs have substantially identical investment objectives;
•
our manager has determined that the investment is in our best interests and will not result in duplicate fees to the manager or its affiliates or
impair, abrogate or circumvent any provisions of the operating agreement;
•
the compensation payable to our manager arising from an investment in the joint venture is substantially identical in each program;
•
we must have a right of first refusal to buy if another program sponsored by our manager desires to sell equipment it holds in the joint venture;
•
our investment is on substantially the same terms and conditions as the investments made in the joint venture by other programs sponsored by our
manager;
•
the joint venture agreement does not authorize us to do anything with respect to the equipment that we, or our manager, could not do under the
provisions of the operating agreement;
•
the joint venture is entered into either for the purpose of effecting appropriate diversification of our investment portfolio or to purchase equipment
or other investments warehoused by our manager or our manager's affiliates on our behalf in accordance with our operating agreement; and
•
the investment objectives of the joint venture are consistent with our investment objectives.
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•
Cause us to make investments in joint ventures with our manager's affiliates unless the following conditions are met:
•
our manager has determined that the investment is in our best interests and will not result in duplicate fees to the manager or its affiliates or
impair, abrogate or circumvent any provisions of the operating agreement;
•
the joint venture agreement does not authorize us to do anything with respect to the equipment that we, or our manager, could not do under the
provisions of the operating agreement;
•
a majority of the directors of our manager's board of directors, including a majority of our manager's independent directors, have approved
the joint venture; and
•
the investment objectives of the joint venture are consistent with our investment objectives.
•
Allow us to make loans to it or its affiliates.
•
Allow us to receive loans from our manager or our manager's affiliates, unless:
•
any interest, financing charges or fees payable by the us in connection with the loan shall not exceed amounts charged by unrelated lending
institutions for the same purpose and located in the same geographic area; and
•
the term of the loan does not extend more than 12 months beyond the end of our operating period.
•
Cause us to acquire equipment or other investments from a program in which our manager has an interest.
•
Cause us to grant an exclusive right to our manager or its affiliate to sell equipment on our behalf.
•
Cause us to purchase or lease equipment from or sell or lease equipment to our manager, except under a lease arrangement made at the outset and on
terms no more favorable to the manager than those offered to other persons. We may purchase equipment or other investments from our manager, our manager's affiliates or other programs managed by our manager which have been warehoused on our
behalf and where:
•
the equipment or other investment was not purchased by our manager or our manager's affiliates from another of our manager's affiliates;
•
the equipment or other investment has been held on a temporary basis only;
•
our manager has determined that the purchase of the equipment or other investment is in our best interests;
•
the purchase price of the equipment or other investment is not more than the cost to our manager or our manager's affiliate;
•
the interest terms of any loans secured by the equipment or other investment are not different than at the time acquired by us;
•
no other benefit arises out of the transaction to our manager apart from compensation otherwise permitted under our operating agreement; and
•
in the case of an acquisition from a program in which our manager has an interest, the acquisition is for the purpose of a joint venture with that
program which meets the joint venture requirements set forth above.
Our Manager's Right to Indemnification
We will indemnify the manager, its directors and officers and its affiliates other than the dealer manager out of our
assets for any liability, loss, cost and expense suffered by us arising out of the acts or omissions of our manager or its affiliates provided that:
•
the manager or its affiliate made a determination in good faith that the action or inaction was in our best interests;
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•
the manager or its affiliate was acting on behalf of or performing services for us; and
•
the course of conduct did not constitute negligence or misconduct on the manager's part or that of its affiliate.
In the opinion of the SEC, indemnifying an entity for liabilities arising under the Securities Act of 1933, as amended, is contrary to
public policy and therefore unenforceable. If the manager asserts a claim against us for indemnification for those liabilities, other than for expenses incurred in a successful defense, under our operating agreement or otherwise, we will submit to a
court of competent jurisdiction the question of whether the indemnification is against public policy as expressed in the Securities Act.
In addition, we are not permitted to indemnify the manager or any of its affiliates, including the dealer manager, for any liability imposed by judgment, and costs associated therewith, including
attorneys' fees arising out of a violation of federal or state securities laws associated with the offer and sale of shares. We may indemnify the manager and any of its affiliates for any settlements and related expenses of lawsuits alleging
federal or state securities laws violations and for expenses incurred in successfully defending those lawsuits if the following have occurred:
•
a court approves the settlement and finds that indemnification of the settlement and related costs should be made or a court approves indemnification
of litigation costs if a successful defense is made; and
•
our manager or its affiliate seeking indemnification has advised the court regarding the current position of the SEC and any applicable state
securities' administrator on the issue of indemnification for securities laws violations.
We will not
have to pay the cost of insurance that insures the manager or any affiliate for any liability for which the manager cannot be indemnified.
Limited Liability of Our Manager and Our Members
Limited Liability of Our Members
. After the payment and acceptance of subscription funds for the shares purchased by a member, that member will have no further obligations to us. Except as provided
in the Delaware Act, the liability of each member in its capacity as a member will be limited to that member's capital contribution. You will have no personal liability for any of our obligations or liabilities.
Our Manager's Limited Liability.
Our manager will not be personally liable under any judgment of a court, or in any other
manner, for any of our debts, obligations or liabilities, whether that liability or obligation arises in contract, tort or otherwise, solely by reason of being the manager. Neither our manager nor any of its affiliates, directors or officers
performing services on our behalf and acting within the scope of the manager's authority will have any liability to us or to any member for any loss suffered by us or the member that arises out of any action or inaction of our manager or its
affiliates if:
•
the manager and its affiliates determined in good faith that the course of conduct or choice to take no action was in our best interest;
•
the manager and its affiliates were acting within the scope of authority on behalf of, or performing services for, us; and
•
the course of conduct or inaction did not constitute negligence or misconduct of the manager or its affiliates.
Withdrawal of Our Manager
Voluntary Withdrawal.
Our manager may voluntarily withdraw as our manager provided that the following conditions are met:
•
Our manager provides 60 days' advance written notice to each of our members.
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•
We must receive an opinion of counsel that the withdrawal will not cause our termination or otherwise materially adversely affect our status for
federal income tax purposes. We do not intend to engage special counsel for this purpose.
•
A substitute manager must have been selected who:
•
has expressed a willingness to be admitted to our fund;
•
has received the consent of our members; and
•
who meets the net worth requirements under the NASAA Guidelines.
Our manager may also voluntarily withdraw as our manager (a) immediately upon the conclusion of our Liquidation Period; or
(b) upon 10 days advance written notice to you if our operating agreement is amended by members with a majority interest in our shares.
Involuntary Withdrawal
. Our manager will be deemed to have involuntarily withdrawn as manager upon its removal pursuant to the consent of a majority interest of our members or upon the occurrence
of any other event that constitutes an event of withdrawal under the Delaware Act.
Consequence of Withdrawal.
Upon
either a voluntary withdrawal or an involuntary withdrawal, our manager is entitled to receive the positive fair market value of its interest in our income, losses, distributions and capital; asset management fees payable prior to the effective date
of the withdrawal; and an amount equal to the difference between any amounts due and owing to the manager from us, including any deferred fees and any amounts due and owing to us from the manager.
If our manager withdraws, Macquarie Financial Holdings Limited may terminate our license to use the Macquarie name and logo. See
"Management–License Agreement."
Transfer of Our Shares and Substitute Members
You may assign your shares only in accordance with the transfer provisions of our operating agreement, discussed below. There will be no public market for
our shares and you may not be able to transfer our shares, even in the case of an emergency. We may agree to redeem your shares as described below.
Wells Fargo Bank will serve as our transfer agent. Our transfer agent will charge a fee per transfer request and this fee will be charged whether the transfer is completed or not. This cost will be
imposed on the transferor. Distributions accrued on transferred shares will accrue to the transferor until but not including the effective date of the transfer. From the effective date on, all distributions will accrue to the transferee.
Assignment and Substitute Members
. You may assign all or any portion of your shares to any person, provided that the assignment is
evidenced by a written agreement that:
•
sets forth the terms of the assignment;
•
evidences the acceptance by the assignee of all of the terms and provisions of the operating agreement;
•
includes a representation by you and your assignee that the assignment was made in accordance with all applicable laws and regulations, including state
securities laws; and
•
is acceptable in form and substance to our manager.
Assignments may not be made:
•
to a minor or incompetent unless a guardian, custodian or conservator has been appointed to handle the affairs of the minor or incompetent;
•
to any person if, in the opinion of our counsel, the assignment would result in our termination, or termination of our status as a partnership for
federal income tax purposes;
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•
to any person if the assignment would affect our existence or qualification as a limited liability company under Delaware law or the applicable laws of
any other jurisdiction in which we are conducting business;
•
to any person not permitted to be an assignee under applicable law, including, without limitation, applicable federal and state securities laws;
•
to any person if the assignment would result in the transfer of less than 500 shares, unless the assignment is of all of the shares owned by the
member;
•
if the assignment would result in your retaining less than 500 shares, or if the assignee would not own at least 500 shares;
•
if, in our manager's reasonable belief, the assignment might violate applicable law;
•
if, in the determination of our manager, the assignment would not be in the best interests of us or our members; or
•
if the assignment would result in us being treated as an association taxable as a corporation or as a "publicly traded partnership" for
federal income tax purposes.
An assignee will be admitted to our fund as a substitute member if our manager
determines that all of the conditions listed above have been met, and that the assignee has signed all necessary forms. A member who assigns all of his shares to an assignee that becomes a substitute member will cease to be a member and will no
longer have the rights and privileges of a member.
Our manager has the right to refuse to recognize any attempt to transfer
assign shares in violation of the provisions of our operating agreement or applicable law and any attempts or transfers will be null and void.
Dissolution and Winding-Up
Our Dissolution.
We will be dissolved upon the happening of any of the following events:
•
the withdrawal of our manager, unless a substitute manager has been admitted;
•
our voluntary dissolution by our manager with the consent of the majority interest of our members or by the consent of the majority interest of our
members without action by our manager;
•
the sale of all or substantially all of our investments;
•
our operations cease to constitute legal activities under the Delaware Act or any other applicable law; or
•
any other event that causes our dissolution or winding-up under the Delaware Act to the extent not otherwise provided herein.
Our Liquidation
. Upon a dissolution event, our manager or the person acting as the liquidator will
liquidate our portfolio and other assets and the proceeds from the liquidation will be distributed to you and our other members after we pay our liquidation expenses and debts, including our manager's fees, in the order of priority set forth in
our operating agreement. Our manager or liquidator will then terminate our existence. Our manager or the liquidator will be compensated for its services during our liquidation. You are not guaranteed the return of, or a return on, your investment.
Fiscal Matters and Reports
Books and Records.
Our manager will maintain the following books and records at our principal place of business:
•
a list, to be updated quarterly, of the name, address and telephone number and number of shares held by each of our members, which we refer to as the
membership list;
•
a copy of our certificate of formation and all amendments thereto;
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•
copies of our operating agreement and any amendments, as well as executed copies of any powers of attorney pursuant to which the operating agreement or
any amendment was executed;
•
copies of our audited financial statements for the three most recently completed fiscal years, together with the report of our independent auditors
with respect thereto;
•
copies of our federal, state and local income tax returns and reports, if any, for the three most recently completed fiscal years;
•
records required by applicable tax authorities;
•
investor suitability records for shares sold for a period of six years after the sale;
•
complete and accurate financial books and records with respect to our business and affairs, kept on an accrual basis and prepared in accordance with
generally accepted accounting principles; and
•
other records that are required to be maintained pursuant to the Foreign Corrupt Practices Act of 1977, as amended.
Our members will have the right to have a copy of the membership list mailed to them for an administrative fee, provided that the list is
not being requested for an improper purpose. A copy of the membership list will be mailed to the member within ten days of:
•
a proper request which certifies that the request is not for an improper purpose; and
•
receipt by the manager of a check for copying and mailing costs.
The copy of the membership list will be printed in alphabetical order, on white paper, and in a readily readable type size, which in no
event will be smaller than 10-point size. Members or their representatives may also inspect and copy our other books and records at our principal place of business upon reasonable notice during normal business hours and at the member's expense.
Reports to Members.
Quarterly Reports
. Within 45 days after the end of each of the first three quarters in each year, our manager will deliver to you the following written materials:
•
A report containing the same financial information as is contained in our quarterly report on Form 10-Q filed with the SEC.
•
A detailed statement prepared by our manager setting forth the fees and other compensation and costs and expenses that were paid or reimbursed by us to
our manager and its affiliates during the fiscal quarter, identified and properly allocated as to type and amount.
•
Until all capital contributions have been invested or committed to investments and reserves, used to pay permitted front-end fees or returned to our
members, a report of all investments made during the fiscal quarter.
Quarterly Reports shall be delivered
to you electronically by way of our manager posting the Quarterly Reports to our website (www.macquarie.com/mami).
Annual
Reports
. Within 90 days after the end of each fiscal year, our manager will deliver to you the following written materials:
•
Our financial statements for the fiscal year, including a balance sheet as of the end of the fiscal year, and related statements of operations, cash
flows and changes in members' equity, accompanied by an auditor's report containing an opinion of our accountants.
•
An analysis, prepared by our manager, of distributions made to you during the fiscal year, separately identifying the portion of those distributions
from: (i) cash from operations; (ii) cash from operations during a prior period which had been held as reserves; (iii) cash from sales; and (iv) capital contributions originally used to establish a reserve.
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•
A status report regarding each piece of equipment which individually represents at least 10.0% of the aggregate purchase price of our investments held
at the end of the fiscal year.
•
A breakdown of all fees and other compensation paid, and all costs and expenses reimbursed, to our manager and its affiliates by us during the fiscal
year, identified and properly allocated as to type and amount.
•
A per share estimated value of the shares and the method by which that estimated value was determined.
•
Until all capital contributions have been invested or committed to investments and reserves, used to pay permitted front-end fees or returned to our
members, a report of all investments made during the fiscal year.
Annual Reports shall be delivered to you
electronically by way of our manager posting the Annual Reports to our website (www.macquarie.com/mami).
Tax Reports
.
Within 75 days after the end of each fiscal year, we will send you a Form K-1 setting forth your share of our income, gains, losses, deductions, and items thereof, and credits if any, for the fiscal year, or such other statement containing all
information necessary to enable you to prepare your income tax returns.
Reports to State Securities Laws
Administrators
. Our manager will submit to all state securities law administrators any information concerning us that the administrators require, including, but not limited to reports and statements required to be distributed to you.
Meetings and Voting Rights of Our Members
Meetings.
In its sole discretion, our manager may call a meeting of our members at any time to consider any matter on which our members may vote, and our manager may submit any matter on which our
members may vote for action by consent in lieu of a meeting. If our Manager receives written requests for a meeting to consider any matter on which our members may vote from members holding 10.0% or more of our outstanding shares, our manager will
call a meeting.
Voting Rights of Our Members
. Our members, acting with the consent of a majority interest of our
members, may take the following actions without the concurrence of our manager:
•
Amend our operating agreement.
•
Dissolve us.
•
Remove our manager and elect one or more substitute managers.
•
Approve or disapprove of the sale or a series of sales of all or substantially all of our assets.
Our manager and its affiliates, in their capacity as members, will have the same voting rights as other members, except that the manager
and its affiliates are prohibited from voting on the removal of our manager as manager and the appointment of a successor manager.
Amendments
Amendment
by Our Manager Without the Consent of Our Members
. Our manager may, without the consent of our members, amend our operating agreement to effect any change for the benefit or protection of our members, including:
•
to add to the representations, duties or obligations of our manager or its affiliates or to surrender any right or power granted to our manager under
the operating agreement;
•
to cure any ambiguity, to correct or supplement any provision of our operating agreement, provided that no amendment will change the voting rights of
our members;
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•
to preserve our status as a "partnership" for federal income tax purposes or under the Delaware Act or any comparable law of any other state
in which we may be required to be qualified;
•
to delete or add any provision of or to our operating agreement required to be deleted or added by the staff of the SEC, by any other federal or state
regulatory body or other agency or by any administrator or similar official;
•
to permit the shares to fall within any exemption from the definition of "plan assets" contained in ERISA or the Code;
•
if we are advised by counsel, our accountants or by the IRS that any allocations of income, gain, loss or deduction provided for in our operating
agreement are unlikely to be respected for federal income tax purposes, to amend the allocation provisions of this Agreement, in accordance with the advice of counsel, accountants or the IRS, to the minimum extent necessary to effect as nearly as
practicable the plan of allocations and distributions provided in the operating agreement; and
•
to change our name or the location of our principal office.
Amendment With the Consent of a Majority Interest of Our Members
. Our manager may propose to our members, in writing, any amendment to our operating agreement, provided that no amendment will
increase the liability of any member or adversely affect in a disproportionate manner any member's share of distributions of cash or allocations of profits or losses for tax purposes, or of any of our investment tax credit amounts, without in
each case the prior written consent of each member affected thereby.
Binding Effect of Our Operating Agreement
In the subscription agreement, you agree to all the terms and provisions of our operating agreement. This is necessary because our manager
and every member are bound by all of the terms and provisions of that agreement, even though members do not actually sign our operating agreement. Your signature on the subscription agreement gives our manager the power of attorney to sign the
operating agreement on your behalf, which obligates you to be bound by each of the terms and provisions of our operating agreement. By becoming a party to our operating agreement through the power of attorney, you will have the right to enforce the
terms and provisions of our operating agreement against us and our manager, and we will have the right to enforce the terms and provisions of our operating agreement against you.
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REDEMPTION OF SHARES
We have the right, but not the obligation, to repurchase all or a portion of the shares of any member if that member becomes a
"foreign partner" under the Code, if it is our opinion that:
•
the repurchase would not constitute a transaction on an established securities market or a secondary market;
•
the repurchase would not jeopardize our treatment as a partnership for federal income tax purposes; and
•
sufficient cash flow is available to provide the funds for the repurchase.
In addition, a member may request at any time that we redeem his shares. The member requesting redemption is under no obligation to hold
our shares for any period of time prior to making the request. Our manager may consent to a request for redemption in its sole discretion. If we receive requests to redeem more shares than there are funds available for redemption, our manager will
have sole discretion regarding the priority of granting any requests for redemption, including redemption requests from our manager and its affiliates. Where our manager receives requests for redemption, regardless of when each request is received,
it may, in its sole discretion, give priority:
•
first, to hardship redemptions (e.g. requests arising from death, major medical expense, family emergency, disability, a material loss of family income
etc.);
•
second, to provide liquidity for IRAs or qualified plans to meet required distributions; and
•
third, to all other redemption requests.
The redemption price to be paid for your shares depends on the phase we are in when you make your request, as described below:
•
during our offering period, the lesser of (i) $9.30 per share and (ii) $9.00 per share for shares purchased under our DRP, unless the
redemption is requested due to the verifiable death or total disability of the member, in which case the redemption price will be the lesser of (i) $10.00 per share and (ii) $9.00 per share for shares purchased under our DRP, in all cases
minus cash distributions and distributions used to purchase shares under our DRP;
•
during our operating period, the lesser of (i) $9.50 per share and (ii) $9.00 per share for shares purchased under our DRP, plus a 5.0%
annual return for each full 12 month period of membership, minus cash distributions received and distributions used to purchase shares under our DRP; and
•
during our liquidation period, at a price per share equal to the net asset value per share as determined by our manager.
If you wish to request redemption of your shares, you must send us a written request in a form and substance satisfactory to us. You may
withdraw a request for redemption at any time by providing notice in writing five business days prior to the end of the fiscal quarter. We will accept or deny redemption requests quarterly.
We will not establish any specific reserves for the redemption of shares. Redemptions may be made from our operating income, general
reserves, additional member capital contributions or any other source not prohibited by our operating agreement. We will not repurchase, in the aggregate, in any calendar year, a number of shares exceeding 2.0% of the total interests in our capital
or profits. See "Federal Income Tax Consequences–Classification as a Partnership." If all of your shares are redeemed, you will cease to be a member and will no longer have the rights and privileges of a member. You are urged to seek
advice based on your particular circumstances from an independent tax advisor with respect to the tax consequences to you of redemption of your shares.
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PLAN OF DISTRIBUTION
General
Up to 20,000,000 shares will be offered on a "best efforts" basis by Macquarie Capital (USA) Inc., an affiliate of the manager, acting as dealer manager of this offering, and by other registered
broker-dealers that are members of FINRA, acting as selling dealers. It is anticipated that all shares will be sold by the selling dealers. However, shares may also be sold by the dealer manager and executive officers of the manager in those states
where those executive officers are licensed to sell shares or are exempt from the licensing requirements. Subscribers' initial investment amount must be for at least 500 shares.
The offering is made on a minimum/maximum basis. We must receive a minimum of $1,200,000 in offering proceeds before we will admit
subscribers as members. Persons who subscribe for shares prior to the time that we admit members who purchased the minimum number of shares will deposit their funds in an escrow account held by Wells Fargo Bank. If the amount of proceeds raised in
the 12 months after the effective date of this prospectus are insufficient to constitute the minimum offering, all subscription funds deposited by the subscribers into the escrow account will be returned, together with any interest earned thereon
and without deduction for fees, commissions, or expenses, to those subscribers.
The offering price of each share is $10.00,
subject to certain exceptions. Our manager and its affiliates and selling dealers who participate in this offering or any of their affiliates purchasing for their own account or their IRAs or qualified plans will pay $9.30 per share, which
represents the offering price less selling commissions.
Investors who purchase shares directly from the executive officers of
the manager or purchase shares sold pursuant to the DRP will pay $9.00 per share, which represents the offering price, less selling commissions and the dealer manager fee. In addition, selling dealers may waive the selling commission in whole or in
part.
The offering will terminate 12 months after the effective date of this prospectus. However, our manager may extend the
offering for a further period of not more than an additional 12 months. Some states or jurisdictions may require renewal, requalification or other consents in order for us to continue this offering after the end of the first year. The offering may
be terminated by the manager at any time.
Compensation of the Dealer Manager and Selling Dealers
The Dealer Manager Fee
Subject to certain exceptions described below, the dealer manager will receive a fee of $0.30 per share, equating to 3.0% of the gross offering proceeds for each share sold at $10.00 per share, by the
dealer manager or selling dealers. The dealer manager fee is paid on a non-accountable basis, meaning that it will not reimburse to us any unused portion of the dealer manager fee.
The dealer manager fee may be used to pay expenses which include:
•
salaries and commissions of wholesaling personnel;
•
expense reimbursements made to wholesaling personnel; and
•
reimbursements to selling dealers for bona fide training and education conferences and seminars.
The dealer manager is responsible for ensuring that all compensation arrangements comply with FINRA Rule 2310. The dealer manager expects
to attend bona fide seminars, national and regional conferences and other meetings sponsored by selling dealers, and pay compensation to the selling dealers for its attendance at those meetings, which may be paid from the dealer manager fee. The
dealer manager also has the right, but not the obligation, to use a portion of its dealer manager fee to provide the selling dealers with, or reimburse them for, permissible compensation under FINRA Rule 2310. A portion of the dealer manager fee may
be re-allowed to selling dealers to reimburse them for permissible marketing expenses. We will not pay the dealer manager fee for shares sold pursuant to the DRP.
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Selling Commissions
Subject to certain exceptions described below, we will pay a selling commission of $0.70 per share, equating to 7.0% of the gross offering proceeds for each share sold at $10.00 per share, by the dealer
manager or selling dealers. We do not expect the dealer manager to sell any of the shares offered. The offering price of each share is $10.00; however we will not pay selling commissions for shares sold:
•
to investors whose broker-dealer waives the selling commission, either in whole or in part;
•
to our manager or its affiliates;
•
to investors by registered investment advisors, affiliated with a selling dealer who did not charge a commission in connection with an investment in
the shares; and clients of registered investment advisors, who are paid a fee by their clients based on a percentage of assets under management;
•
to broker-dealers participating in this offering or any of their associated persons purchasing for their own account or their IRAs or qualified plans;
or
•
pursuant to the DRP.
In addition, selling dealers that have a contractual arrangement with their clients for the payment of fees on terms that are inconsistent with the acceptance of selling commissions may elect not to
accept selling commissions for shares that they sell to those clients. In that event, the shares will be sold to the investor net of some or all of the selling commissions. The amount of proceeds to us will not be affected by eliminating selling
commissions payable in connection with sales to investors purchasing through registered investment advisers or bank trust departments.
In connection with sales of 25,000 shares or more to a "purchaser," as defined below, a participating selling dealer may agree in its sole discretion to reduce the amount of its selling
commission as a volume discount. This reduction will be credited to the purchaser by reducing the purchase price payable by the purchaser for each share, in effect increasing the number of shares being purchased. The following table illustrates the
various discounts available.
Total Investment for a
Single Purchaser
(1)(2)
Purchase Price
Per Share
Selling Commission
Per Share
Dealer Manager Fee
Per Share
(3)
Net Proceeds to Us
Per Share
$5,000 – $250,000
$
10.00
$
0.70
$
0.30
$
9.00
$250,001 – $500,000
9.90
0.60
0.30
9.00
$500,001 – $750,000
9.75
0.45
0.30
9.00
$750,001 – $1,000,000
9.65
0.35
0.30
9.00
More than $1,000,000
9.55
0.25
0.30
9.00
(1)
Excludes DRP shares.
(2)
For purposes of the volume discounts, the term "purchaser" includes:
•
an individual, his and her spouse and their children under the age of 21 who purchase the shares for his, her or their own accounts;
•
a corporation, partnership, association, joint stock company, trust fund or any organized group of persons whether incorporated or not;
•
an employees trust, pension, profit sharing or other employee benefit plan qualified under section 401(a) of the Code; and
•
all commingled trust funds maintained by a given bank.
(3)
For all investments, the dealer manager may, in its sole discretion, waive all or a portion of the dealer manager fee.
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Any reduction in the amount of selling commissions with respect to volume discounts will be
credited to the investor in the form of additional shares. Fractional shares will be issued and no selling commissions will be paid on any shares issued for a volume discount. For example an investor purchasing $600,000 will receive 61,538.462
shares at a purchase price per share of $9.75.
Due Diligence Expenses
We will reimburse the dealer manager and the selling dealers for bona fide accountable due diligence expenses up to a maximum of 0.5% of
the gross offering proceeds of the offering. Bona fide accountable due diligence expenses will be reimbursable only to the extent that they are presented in a detailed and itemized statement to the dealer manager or to us in the case of the dealer
manager's expenses. Those expenses may only include actual costs, including overhead, associated with the dealer manager's or selling dealers' due diligence activities and may not include a profit margin. We estimate that bona fide
accountable due diligence expenses will be approximately 0.07% of the gross proceeds of the offering, however we may reimburse higher amounts up to a maximum of 0.5% of the gross offering proceeds of the offering. See "Management
Compensation."
Total Compensation to Dealer Manager and Selling Dealers
The table below shows the maximum amount of compensation that we may pay to the dealer manager and selling dealers in this offering.
Shares that may be sold pursuant to the DRP are excluded. Dealer manager fees and selling commissions are not payable on shares sold pursuant to the DRP. The table assumes that:
•
all shares are sold by the dealer manager and/or selling dealers; and
•
we will reimburse for bona fide, detailed and itemized, accountable due diligence expenses up to a maximum of 0.5% of the gross proceeds of the
offering.
Amount
Percentage of
Gross
Offering Proceeds
Dealer Manager Fee
$
6,000,000
3.0
%
Selling Commissions
$
14,000,000
7.0
%
Reimbursement for Detailed and Itemized Due Diligence Expenses
$
1,000,000
0.5
%
TOTAL
$
21,000,000
10.5
%
This offering will be made
in compliance with FINRA Rule 2310, and all compensation paid to selling dealers and wholesalers, regardless of the source, including the reimbursement of due diligence expenses through a reallocation of the dealer manager fee as a non-accountable
expense allowance and permissible non-cash compensation, will be limited to 10% of our gross offering proceeds.
Total
organization and offering expenses, which include the dealer manager fee, selling commissions, due diligence reimbursements and the organization and offering expense allowance payable to our manager will not exceed 15.0% of the gross offering
proceeds. See "Management Compensation."
The dealer manager and the selling dealers may be deemed to be
underwriters within the meaning of the Securities Act. Our agreement with the dealer manager provides that we will indemnify the dealer manager and its affiliates against certain liabilities, including liabilities under the federal securities laws.
Brokerage firms soliciting participations in this offering are required to retain investor suitability records obtained by them for not less than six years.
Termination of Dealer Manager and Selling Dealer Agreements
The dealer manager agreement will terminate upon completion or termination of the offering. We, our manager or the dealer manager may also terminate the dealer manager agreement at any time and for any
reason by giving at least 30 days prior written notice. The selling dealer agreements will terminate upon completion or
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termination of the offering. The dealer manager or a selling dealer may also terminate a selling dealer agreement at any time and for any reason by giving at least 30 days prior written notice.
Indemnification of Dealer Manager and Selling Dealers
Our manager has agreed to indemnify the dealer manager and the selling dealers against all losses, liabilities, claims, damages and
expenses incurred by any of them, including liabilities under the Securities Act, in connection with any untrue statement or alleged untrue statement of a material fact contained in this registration statement or in any prospectus, unless the untrue
statement or omission was made in reliance upon and in conformity with written information furnished to us by the dealer manager or any selling dealer.
Distribution Reinvestment Plan
We are offering
an additional 1,555,556 shares under our DRP. When you subscribe for the minimum subscription of 500 shares or more, not including shares under the DRP, you may elect to participate in the DRP, which allows you to reinvest distributions made by us
during the offering period, by marking the applicable box in your subscription agreement. If you elect to participate in the DRP we will pay distributions, if any, during the offering period in the form of additional shares to the extent shares
remain available for purchase under the DRP.
You do not need to purchase a minimum number of shares under the DRP and we may
issue fractional shares at our discretion. Shares purchased under the DRP will be sold for $9.00 per share, which represents the offering price less the dealer manager fee and selling commissions. In addition, until the end of our DRP period,
members of Macquarie Equipment Leasing Fund, LLC may elect to invest all the distributions that they receive with respect to their investment in that fund in our shares issued under our DRP. You may withdraw from our DRP at any time by providing
written notice to Macquarie Asset Management Inc., Investor Relations, 225 Franklin St, 17th Floor, Suite 1700, Boston MA, 02110. Your withdrawal from our DRP will not affect shares committed for purchase prior to the date of the withdrawal notice.
See "Questions and Answers about Our Distribution Reinvestment Plan" and Appendix E to this prospectus.
Subscription Process and Escrow Agreement
Our manager will promptly accept or reject subscriptions for shares after it receives a prospective investor's subscription documents and subscription funds. A specimen copy of the subscription
agreement, including instructions for completing it for new investors, is included in this prospectus as Appendix C. A specimen copy of the subscription agreement for investors who have been admitted as members and who desire to make an additional
investment is included in this prospectus as Appendix D. Selling dealers have agreed to provide each investor with a final prospectus prior to an investor signing a subscription agreement. Subscribers should only invest in us after having our final
prospectus for at least five business days and only if they meet the investor suitability standards set forth in this prospectus. Each subscriber has the right to cancel his or her subscription within a period of five business days after receiving a
final prospectus. After that time, unless otherwise approved by our manager in its sole discretion, an investment in our shares is irrevocable and investors will have no right to revoke their subscriptions prior to us achieving our minimum offering
amount.
It is the responsibility of our manager, the dealer manager and each person selling our shares on behalf of our
manager or dealer manager to make every reasonable effort to determine that the purchase of our shares is a suitable and appropriate investment for subscribers. In making this determination, our manager, the dealer manager and each person selling
our shares on behalf of our manager or dealer manager, will ascertain that each subscriber:
•
meets the minimum income and net worth standards established for the Fund;
•
can reasonably benefit from the Fund based on the subscriber's overall investment objectives and portfolio structure;
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•
is able to bear the economic risk of the investment based on the subscriber's overall financial situation; and
•
has apparent understanding of:
•
the fundamental risk of the investment;
•
the risk that the subscriber may lose the entire investment;
•
the lack of liquidity of the shares;
•
the restrictions on transferability of the shares;
•
the background and qualifications of our manager; and
•
the tax consequences of the investment.
Until we have received at least $1,200,000 in subscription proceeds, which may include the investment which will be made by our manager or its affiliates, the manager will place all funds that the dealer
manager receives from subscribers in an escrow account at Wells Fargo Bank at our expense. Investors who invest prior to our reaching the minimum offering amount will be admitted if their subscriptions are accepted upon the initial closing date,
which will be within 15 days after we receive and accept subscription proceeds of $1,200,000.
After the initial closing date,
the escrow agent will release the escrow funds and, where state requirements do not require us to maintain additional funds in escrow, the escrow agreement will terminate. The manager anticipates holding weekly closings, if, in its discretion, the
number of subscribed shares is sufficient to do so. At each closing the manager will admit as members, effective as of the next business day, all subscribers whose subscriptions have been received and accepted by the manager and who are then
eligible to be admitted.
We will return to you and our other investors, without interest, any of your net subscription funds
that we do not commit to investment or that are not required as reserves within the latter of 24 months after the beginning of this offering or 12 months after receipt by us. "Net subscription funds" means your original subscription amount
minus the organization and offering expense allowance and dealer manager fees, selling commissions and due diligence expenses paid on the sale of your shares.
Automatic Investment Program
Investors who
desire to purchase shares in this offering at regular intervals may be able to do so by electing to participate in the automatic investment program by completing an enrollment form that we will provide upon request. Only investors who have already
met the minimum purchase requirement may participate in the automatic investment program. The minimum periodic investment is $500 per month. We will pay dealer manager fees, selling commissions and organization and offering expenses in connection
with sales under the automatic investment program to the same extent that we pay those fees and commissions on shares sold outside of the automatic investment program. If you elect to participate in both the automatic investment program and our
distribution reinvestment plan, distributions earned from shares purchased pursuant to the automatic investment program will automatically be reinvested pursuant to the distribution reinvestment plan. For a discussion of the dividend reinvestment
plan, see "Plan of Distribution—Distribution Reinvestment Plan."
You will receive a confirmation of your
purchases under the automatic investment program on a quarterly basis. The confirmation will disclose the following information:
•
the amount invested for your account during the period;
•
the date of the investment;
•
the number and price of the shares purchased by you; and
•
the total number of shares in your account.
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You may terminate your participation in the automatic investment program at any time by
providing us with written notice. If you elect to participate in the automatic investment program, you must agree that if at any time you fail to meet the applicable investor suitability standards or cannot make the other investor representations or
warranties set forth in the then current prospectus or in the subscription agreement, you will promptly notify us in writing of that fact and your participation in the plan will terminate. See the "Who May Invest" section of this
prospectus (immediately following the cover page) and the form of subscription agreement attached hereto as Appendix D.
Shares by Assignment
Persons holding shares by assignment from entities holding our shares for the purpose of
assigning all or a portion of such interests to subscribers, which we refer to as the "Assignor," shall be expressly granted the same rights as if they were members except as prohibited by applicable law. The Assignor's management
shall have fiduciary responsibility for the safekeeping and use of all funds and assets of the assignees, whether or not in the Assignor management's possession or control, and the management of the Assignor shall not employ, or permit another
to employ such funds or assets in any manner except for the exclusive benefit of the assignees. Assignees shall not be permitted to contract away the fiduciary duty owed to the assignees by the Assignor's management under the common law of
agency.
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SUPPLEMENTAL SALES MATERIAL
We may use sales material in addition to and apart from this prospectus in connection with our offering of shares, although only when
preceded by or accompanied by this prospectus. This material may include information relating to this offering, our manager and its affiliates and brochures, articles and publications concerning equipment leasing. Certain jurisdictions may not
permit us to use this supplemental sales material. We will only use sales material that has been approved by appropriate regulatory bodies, if approval is required.
The sales material we intend to use are as follows:
•
A [    ] page color brochure prepared by the manager entitled "[    ];"
•
A single, double sided page entitled "[    ];"
•
A trifold color brochure entitled "[    ];" and
•
A powerpoint presentation entitled "[    ]."
This offering is made only by means of this prospectus. Although the information contained in any supplemental sales material will not
conflict with any of the information contained in this prospectus, the sales material is not complete, and is not a part of this prospectus or the registration statement of which this prospectus is a part, or as incorporated by reference in this
prospectus.
LEGAL OPINIONS
The legality of the shares has been passed upon and the statements under the caption "Federal Income Tax Consequences" as they
relate to federal income tax matters have been reviewed and passed upon by Baker, Donelson, Bearman, Caldwell & Berkowitz, a Professional Corporation.
EXPERTS
The consolidated balance sheet of
Macquarie Asset Management Inc. and Subsidiary as of March 31, 2010 included in this prospectus has been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the
authority of said firm as experts in auditing and accounting.
The balance sheet of Macquarie Equipment Leasing Fund Two, LLC
as of January 19, 2011 included in this prospectus has been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and
accounting.
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements concerning our objectives, plans, intentions, strategies, expectations and
predictions concerning our future investment activities, results of operations and other future events or conditions based on views and opinions of our manager. For this purpose, any statements contained herein that are not of historical fact may be
deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "believes," "may," "will," "could," "intends," "anticipates," "estimates,"
"expects" or "might," or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements.
It is important to note that actual results or activities or actual events or conditions could differ materially from those estimated or anticipated in the forward-looking statements, due to a variety of
factors, some of which may be beyond our control. Certain material factors could cause our actual results or activities or actual events or conditions to differ from those anticipated. Risks associated with the purchase of our shares include:
•
All or a substantial portion of your distributions may be a return of capital and not a return on capital. Rates of distribution will not necessarily
be indicative of our overall performance.
•
This is a "blind pool" offering because we have not identified any specific investments as of the date of this prospectus and therefore
cannot determine all of the potential risks associated with our portfolio at this time. Our manager's limited operating history decreases your ability to evaluate your investment.
•
Your shares are effectively illiquid, and you may not be able to sell your shares. You should be prepared to hold your shares for the life of our fund,
which is anticipated to be approximately eight years but may be longer.
•
Uncertainties associated with the equipment leasing industry may have an adverse effect on our business and may adversely affect our ability to give
you any economic return from our shares or a complete return of your capital.
•
You will have limited voting rights. Our manager will make all of our management decisions.
•
Our manager will receive substantial fees from us.
•
Our use of debt financing means our losses may be greater than if debt financing were not used.
•
There are potential conflicts of interest between us and our manager and its affiliates.
See "Risk Factors" and "Fiduciary Duties and Conflicts of Interest."
Although estimates and assumptions concerning potential investments are believed by the manager to be reasonable, those estimates and
assumptions are uncertain and unpredictable. To the extent that actual events differ materially from the manager's assumptions and estimates, actual results will differ from those expected.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares offered in this
prospectus. This prospectus, filed as part of the registration statement, does not contain all of the information set forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules
and regulations of the SEC. For further information about us and our shares, we refer you to the registration statement and to its exhibits and schedules. Statements in this prospectus about the contents of any contract, agreement or other document
are not necessarily complete and, in each instance, we refer you to the copy of the contract, agreement or document filed as an exhibit to the registration statement.
Anyone may inspect the registration statement and its exhibits and schedules without charge at the public reference facilities the SEC maintains at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain copies of all or any part of these materials from the SEC upon the payment of certain fees prescribed by the SEC. You may obtain further information about the operation of the SEC's Public Reference Room by calling the SEC at
1-800-SEC-0330. You may also inspect these reports and other information without charge at the website maintained by the SEC. The address of this website is http://www.sec.gov.
Upon effectiveness of the registration statement, we will become subject to the informational requirements of the Exchange Act and will
be required to file reports and other information with the SEC. You will be able to inspect and copy these reports and other information at the public reference facilities maintained by the SEC at the address noted above. You also will be able to
obtain copies of this material from the Public Reference Room as described above or inspect them without charge at the SEC's website.
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GLOSSARY
The following terms used in this prospectus have the meanings set forth below:
"Acquisition Expenses"
means all expenses related to the selection, acquisition and documentation of investments and
Equipment, whether or not acquired.
"Acquisition Fees"
means the total of all fees and commissions paid by
any party in connection with the initial purchase of Equipment or other investments. Acquisition Fees do not include Acquisition Expenses.
"Affiliate"
means, with respect to any Person:
(1) any other
Person directly or indirectly controlling, controlled by or under common control with that Person;
(2) any other Person
owning or controlling 10.0% or more of the outstanding voting securities of that Person;
(3) any officer, director, or
partner of that Person; and
(4) if that other Person is an officer, director or partner, any company which that Person acts
for in that capacity.
"Asset Management Fee"
means the fee payable by us to our Manager for actively
managing the leasing of our Equipment, equal to the lesser of: (1) the total of (a) 5.0% of Gross Rental Payments from Non-Full Payout Leases, except that 1% of Gross Rental Payments shall be payable with respect to Non-Full Payout Leases
for which management services are performed by non-Affiliates under the Manager's supervision; (b) 2.0% of Gross Rental Payments from Full Payout Leases which contain Net Lease provisions; and (c) 7.0% of Gross Rental Payments from
Equipment for which we provide services in addition to Equipment management relating to the continued and active operation of the our Equipment such as, but not limited to, ongoing marketing and re-leasing of Equipment and hiring or arranging for
the hiring of crews or operating personnel for our Equipment and similar services; or (2) the amount of fees which are competitive for similar services.
"Capital Contribution"
means (1) as to the Manager, its $2,000 cash contribution, plus any additional amounts the Manager may contribute, and (2) as to any other Member, the
gross amount of initial investment in us actually paid by the Member for Shares, without deduction for Front-End Fees.
"Client"
means a lessee, hirer, user, licensee, bailee, charterer or similar person under a Lease.
"Dealer Manager"
means Macquarie Capital (USA) Inc., an Affiliate of the Manager, and any successor thereto.
"Dealer Manager Fee"
means the fee payable by us to the Dealer Manager in an amount equal to $0.30 per Share sold.
"Delaware Act"
means the Delaware Limited Liability Company Act, as amended from time to time, or any
successor statute thereto.
"Discount Rate"
is the discount rate that, when applied to (i) the minimum
rental payments under a Lease, plus (ii) the estimated fair value of the Equipment to the lessor at the end of the Lease term, causes the aggregate present value at the beginning of the Lease term to equal the purchase price of the Equipment.
"DRP"
means our Distribution Reinvestment Plan, a copy of which is attached to this prospectus as Appendix
E.
"Due Diligence Reimbursements"
means the fees and expenses actually incurred for bona fide, detailed and
itemized, accountable due diligence efforts expended in connection with the Offering.
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"Effective Date"
means the date the Registration Statement is declared
effective by the SEC.
"Equipment"
means the equipment acquired and owned by us to be leased by us to
Clients, as well as rights relating to Equipment, including residual rights, and related property, real or personal, acquired by us, or in which we have acquired a direct or indirect interest, and also includes other tangible and intangible real or
personal property which at any time is owned in fee simple or is subject to a Lease.
"Final Closing Date"
means the last date on which any Member is admitted to the Fund.
"FINRA"
means the Financial Industry
Regulatory Authority.
"Front-End Fees"
means fees and expenses paid by any Person for any services rendered
during our organization and offering or acquisition phases, including Selling Commissions, Due Diligence Reimbursements, the Dealer Manager Fee, the O&O Expense Allowance, Acquisition Fees, Acquisition Expenses and all other similar fees however
designated, but does not include Acquisition Fees or Acquisition Expenses paid by a manufacturer of Equipment to any of its employees unless those Persons are Affiliates of our Manager.
"Full-Payout Lease"
means any Lease pursuant to which the aggregate non-cancellable rental payments, which shall not
include payment for services to be provided under the lease, such as asset management, maintenance and other services, due during the initial term of the lease, on a net present value basis using the Discount Rate, are sufficient to permit us to
recover the purchase price of the Equipment subject to the lease.
"Fund"
means Macquarie Equipment Leasing
Fund Two, LLC.
"Gross Rental Payments"
means revenue or income from any and all sources with respect to a
Lease or similar document, including (1) rental, royalty, lease, hire, license, usage, service, charter and other payments made by Clients under or otherwise with respect to Leases or similar documents whether or not pledged to a lender and
including payments assigned for direct payment to lenders and (2) interest earned on funds on deposit for us, other than Subscription Funds. Gross Rental Payments includes receipts from any and all sources, whether received by us or by a
Lender, with respect to any Full-Payout Lease or Non-Full Payout Lease, as applicable, including late payment charges and payments made by guarantors, regardless of whether (a) the receipts are pledged or assigned for payment to a lender by us,
the Client or a third party or (b) title to the Equipment is held by us, the Client, a lender or another Person.
"Independent Director"
means a director who at the time of appointment to our manager's board of directors is not,
and within the last two years has not been, directly or indirectly associated with our manager or its affiliates by virtue of (i) ownership of an interest in our manager or its affiliates; (ii) employment by our manager or its affiliates;
(iii) service as an officer or director of our manager's affiliates; (iv) performance of services, other than as a director, for us; or (v) maintenance of a material business or professional relationship with our manager or any
of its affiliates. A business or professional relationship is considered material if the gross revenue derived by the director from our manager and its affiliates exceeds 5% of either the director's annual gross revenue during either of the
last two years or the director's net worth on a fair market value basis. An indirect relationship shall include circumstances in which a director's spouse, parents, children, siblings, mothers or fathers-in-law, sons- or daughters-in-law
or brothers- or sisters-in-law is or has been associated with our manager, any of its affiliates or us.
"Initial
Closing Date"
means the date on which the first Members are admitted to the Fund, after the Minimum Offering has been raised.
"Investor Return"
means a pre-tax 8.0% per annum internal rate of return compounded daily on all capital contributed to us, calculated on the date of distribution and taking into
account all capital contributions and all distributions. Investor return includes a return equal to all capital contributions we have received from you.
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"Lease"
means any Full-Payout Lease and any Non-Full Payout Lease and any
residual value interest therein, including under any forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options, joint ventures, special purpose vehicles, companies or other equipment related
transactions.
"Leverage"
means the use of debt in the acquisition of equipment.
"Liquidation Period"
means the period beginning on the first day following the end of the Operating Period and
continuing for the amount of time deemed necessary by the Manager for orderly termination of our operations and affairs and liquidation or disposition of our investments and other assets and the realization of the maximum proceeds for those
investments and other assets, which is expected to continue for 12 months beyond the end of the Operating Period but which could last until up to 36 months beyond the end of the Operating Period.
"Majority Interest"
means Members owning more than 50.0% of the aggregate outstanding Shares.
"Manager"
means Macquarie Asset Management Inc., a Delaware corporation, or any other Person which succeeds it in that
capacity.
"Maximum Offering"
means the receipt and acceptance by us of subscriptions to purchase 20,000,000
Shares.
"Member"
means any Person who is the owner of Shares and who has been admitted to the Fund as a
Member.
"Minimum Offering"
means receipt and acceptance by us of subscriptions for not less than $1,200,000
in offering proceeds, which may including the investment which will be made by the Manager or its affiliates.
"NASAA
Guidelines"
means the Statement of Policy regarding Equipment Programs adopted by the North American Securities Administrators Association, Inc., as in effect on the date of the Prospectus.
"Net Lease"
means a Lease under which the Client assumes responsibility for, and bears the cost of, insurance, taxes,
maintenance, repair and operation of the leased asset and where the non-cancellable rental payments pursuant to such Lease are absolutely net to us.
"Non-Full Payout Lease"
means any lease, entered into or acquired from time to time by us, pursuant to which the aggregate non-cancellable rental payments, which shall not include payment
for services to be provided under the lease, such as asset management, maintenance and other services, during the initial term of such lease, on a net present value basis using the Discount Rate, are not sufficient to permit us to recover the
purchase price of the Equipment subject to the lease.
"O&O Expense Allowance"
means an amount up to
$0.240 per Share for the first 3,500,000 Shares sold; $0.200 per Share for Shares sold that exceed 3,500,000 Shares but do not exceed 10,000,000 Shares; and $0.172 per Share for Shares sold in excess of 10,000,000 Shares.
"Offering"
means the offering of Shares pursuant to the Prospectus.
"Offering Period"
means the period from the Effective Date to the Termination Date.
"Operating Agreement"
means the Limited Liability Company Operating Agreement of the Fund, as it may be amended,
supplemented or restated from time to time.
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"Operating Period"
means the period beginning with the Initial Closing Date
and ending 5 years after the Final Closing Date; provided, however, that the Operating Period may be extended, by notice to the Members, at the discretion of the Manager for a further period of not more than an additional 12 months.
"Outperformance Fee"
the increased percentage fees payable to our manager after investor return is achieved. Prior to
the time that investor return is achieved, we will pay our manager an amount equal to 1.0% of distributions made to our members. After the time that investor return is achieved, we will pay our manager an amount equal to 19.0% of distributions made
to our members.
"Person"
means any natural person, corporation, general partnership, limited partnership,
limited liability company, joint venture, trust, business trust, association, unincorporated organization, country, state, city or other political subdivision, governmental agency or instrumentality, or other entity.
"Portfolio"
means our portfolio of Equipment and Leases and any of our interests in Equipment and Leases of any nature
whatsoever, whether the interest is owned directly or indirectly, through the ownership of equity or other instruments, whether held through a nominee, joint venture, partnership or otherwise, including, without limitation, equipment purchase option
agreements, forward purchase agreements or any other agreement evidencing an interest in Equipment and Leases and in any related matters.
"Prospectus"
means the prospectus, included as part of the Registration Statement on Form S-1, in the final form in which such prospectus is filed with the SEC pursuant to Rule 424 under
the Securities Act and as thereafter supplemented or amended pursuant thereto.
"Registration Statement"
means the registration statement for the Shares on Form S-1 filed with the SEC under the Securities Act which registration statement was declared effective by the SEC.
"Re-Leasing Fees"
means a fee in an amount that will not exceed the lesser of: (i) 2.0% of Gross Rental Payments derived from the re-lease of Equipment after the time that the
re-lease of such Equipment has been consummated to a different Client as a result of the efforts of the Manager or its Affiliates; or (ii) the competitive rate charged by others for comparable services for similar equipment transactions;
provided, however, that Re-Leasing Fees shall only be payable if the Manager is also entitled to Asset Management Fees for the Equipment and further provided that no Re-Leasing Fees shall be paid if the Manager receives Asset Management Fees equal
to 7.0% of the Gross Rental Payments and further provided that Re-Leasing Fees will only be payable as each rental payment is made over the term of the lease.
"Re-Marketing Fees"
means the fee payable to our Manager in the amount equal to the lesser of (1) 3.0% of the purchase price paid to us by the purchaser of our Investment, including
under lease agreements, trading transactions, residual value guarantees, forward purchase agreements, equipment purchase options, joint ventures and special purpose vehicles and companies; or (2) one-half of reasonable, customary and
competitive brokerage fees paid for services rendered in connection with the sale of equipment of similar size, type and location.
"SEC"
means the United States Securities and Exchange Commission.
"Selling Commissions"
means commissions in the amount of $0.70 per Share sold paid by us to the Dealer Manager and each
Selling Dealer with respect to the Shares sold by them.
"Selling Dealer"
means each member firm of FINRA
which has been selected by the Dealer Manager to offer and sell Shares.
"Share"
means a membership interest
in us.
"Specified Equipment Program"
means an equipment leasing fund managed by our manager where at least
75% of the net proceeds from the sale of the program interests are allocable to the purchase or renovation of identified equipment or one specified type of identified equipment.
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"Subscription Funds"
means the funds received from a subscriber in respect
of a purchase of Shares.
"Termination Date"
means the earliest of (1) the date on which the Maximum
Offering has been sold, (2) 12 months following the Effective Date, provided that such 12 month period may be extended at the discretion of the Manager for a further period of not more than an additional 12 months, and (3) the termination
of the Offering by the Manager at any time.
"UBTI"
means unrelated business taxable income. For a tax-exempt
entity, UBTI includes gross income derived from a business not substantially related to the purpose which forms the basis for an entity's tax-exempt status, less the deductions allowed which are directly connected with the carrying on of the
business.
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INDEX TO FINANCIAL STATEMENTS
MACQUARIE ASSET MANAGEMENT INC.
Unaudited Balance Sheets as of December 31, 2010 and March 31, 2010
F-2
Notes to unaudited Balance Sheets
F-3
MACQUARIE ASSET MANAGEMENT INC. AND SUBSIDIARY
Report of Independent Registered Public Accounting Firm
F-7
Consolidated Balance Sheets as of March 31, 2010 and 2009
F-8
Notes to Consolidated Balance Sheets
F-9
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
Report of Independent Registered Public Accounting Firm
F-13
Balance Sheet as of February 28, 2011
F-14
Notes to Balance Sheet
F-15
F-1
Table of Contents
Macquarie Asset Management Inc.
Unaudited Balance Sheets
December 31,
2010
March 31,
2010
ASSETS
Current Assets
Due from affiliates
$
2,630,373
$
2,833,800
Deferred offering costs
357,615
574,135
Taxes receivable—related party
390,681
249,859
Other assets—related party
869,611
233,930
Total Current Assets
4,248,280
3,891,724
Non-Current Assets
Investment in Macquarie Equipment Leasing Fund
1,331,918
480,475
Other assets
4,868
1,431
Total Non-Current Assets
1,336,786
481,906
Total Assets
$
5,585,066
$
4,373,630
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Accrued expenses
$
214,849
$
172,422
Total Current Liabilities
214,849
172,422
Non-current Liabilities
Due to affiliates-loan
1,084,585
1,050,000
Due to affiliates-other
2,376,772
1,045,025
Total Non-Current Liabilities
3,461,357
2,095,025
Total Liabilities
3,676,206
2,267,447
Commitments and Contingencies
—
—
Shareholder's Equity
Shareholder's equity ($0.01 par value; 10,000 shares authorized; 10,000 shares issued)
100
100
Paid in capital
2,449,900
2,449,900
Accumulated deficit
(541,140
)
(343,817
)
Total Shareholder's Equity
1,908,860
2,106,183
Total Liabilities and Shareholder's Equity
$
5,585,066
$
4,373,630
See accompanying notes to unaudited Balance Sheets
F-2
Table of Contents
MACQUARIE ASSET MANAGEMENT INC.
NOTES TO UNAUDITED BALANCE SHEETS
1.
ORGANIZATION AND BUSINESS OPERATIONS
Macquarie Asset Management Inc. (the "Manager") was incorporated in Delaware on August 21, 2008. The Manager's fiscal year ends on
March 31. As of March 31, 2009, Macquarie Asset Management Inc. was a wholly owned subsidiary of Macquarie Holdings (U.S.A.) Inc. ("MHUSA"). Subsequently on April 1, 2009, ownership of the Manager was transferred from MHUSA
to Macquarie NB Holdings Inc. ("MNBH"), an affiliate. Both MHUSA and MNBH are members of the Macquarie Group of companies which is comprised of Macquarie Group Limited and its subsidiaries and affiliates worldwide (the "Macquarie
Group"). Macquarie Group Limited is headquartered in Australia and is listed on the Australian Stock Exchange.
The Manager made an
initial contribution of $5,000 to Macquarie Equipment Leasing Fund, LLC ("Fund One"), a Delaware limited liability company. As of March 5, 2010, Fund One reached its minimum offering amount and accepted capital contributions of over
$2,500,000 from external shareholders. The Manager made additional capital contributions on March 31, 2010 and June 22, 2010 for $500,000 and $1,000,000, respectively, in Fund One.
Fund One was formed for the purpose of being an equipment leasing program to acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. The majority of the
equipment is leased to corporate clients. Fund One generates income through the collection of lease rentals and other revenues and is expected to generate income through the sale of leased equipment and other portfolio investments.
Macquarie Asset Management Inc. has been appointed the manager of Fund One and earns fees by providing or arranging all services necessary for the
operations of Fund One, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services. Further, Fund One may be required to reimburse the Manager for costs incurred by them
in managing Fund One and its portfolio of equipment, equipment lease and other equipment-related investments.
The Manager was considered to
be a development stage enterprise until March 2010, as defined by Accounting Standards Codification ("ASC") 915,
Developmen
t
Stag
e
Entities
.
Fund One is currently in its offering period, which commenced on June 19, 2009 and is anticipated to end on June 19, 2011. It is currently in the process of raising capital. As of
December 31, 2010, Fund One has received and accepted cumulative subscriptions for 2,113,196 shares (including the Distribution Reinvestment Plan, or "DRP", shares and net of repurchase of shares) of limited liability company interest
("Shares") for $18,508,589, net of offering costs, including the capital contributions from the Manager.
2.
SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting and Use of Estimates
The Balance Sheets have been prepared in conformity with accounting principles generally accepted in the United States of America. This requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
Investment in Macquarie Equipment Leasing Fund
Generally, a variable interest
entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support;
(b) as a group the holders of the equity investment at risk lack (i) the ability to
F-3
Table of Contents
MACQUARIE ASSET MANAGEMENT INC.
NOTES TO UNAUDITED BALANCE SHEETS—(continued)
make decisions about an entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the
expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity's activities either involve, or are conducted on behalf of,
an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance,
and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.
The Manager
performed a qualitative and quantitative assessment as to the whether Fund One is considered to be a VIE, and whether or not the Manager is considered to be the Primary Beneficiary. In applying these assessments, the Manager identified Fund One to
be a VIE and concluded that the Manager was not considered the Primary Beneficiary as the Manager's contractual arrangements with Fund One are fiduciary in nature and do not constitute a variable interest.
The Manager currently accounts for its interest in Fund One under the equity method as it is able to exercise significant influence but not control the
operations of Fund One.
Income Taxes
Macquarie Corporate and Asset Finance Holdings Inc. ("MCAF") files consolidated federal and state income tax returns, including the results of all the entities within its consolidated tax group.
These income tax returns will include the operations of the Manager. Pursuant to an informal tax sharing agreement that MCAF and the Manager entered into, MCAF or other members of the consolidated tax group will reimburse the Manager for tax
benefits used by the consolidated tax group.
The Manager uses the liability method in accounting for income taxes. Under this method,
deferred income tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Valuation reserves are established when it is determined that it is more than likely than not that the deferred income tax asset will not be realized.
The Manager records its benefit for income taxes as amounts due based upon the estimated taxes that would be due if the Manager had filed its income tax returns on a separate entity basis. The
Manager's share of current and deferred federal and state tax benefits or obligations are recorded as taxes receivable (related party) in the balance sheet.
Deferred Offering Costs
The Manager complies with the requirements of the ASC
340-10,
Other Assets and Deferred Costs—Expenses incurred before the effective date of an offering of equity securities
. Deferred offering costs consists of legal fees and other direct costs incurred that are directly related to the
proposed offering of membership interests in Fund One (the "Proposed Offering"), and that may be recovered from Fund One upon the completion of the Proposed Offering. The Proposed Offering contemplates Fund One offering membership
interests on
with the intention of raising up to $157,200,000 of equity. Fund One has paid or accrued $510,536 in organization and offering expense as of December 31, 2010. The Manager has recorded this as reimbursement of
deferred offering costs.
New Accounting Pronouncements
In July 2010, the FASB issued ASU 2010-20
Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,
an amended guidance for disclosures about the
credit quality of financing
F-4
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MACQUARIE ASSET MANAGEMENT INC.
NOTES TO UNAUDITED BALANCE SHEETS—(continued)
receivables and the allowance for credit losses. This update amends existing guidance by requiring more robust and disaggregated disclosures by an entity about the credit quality of its financing
receivables and its allowance for credit losses. These disclosures will provide financial statement users with additional information about the nature of credit risks inherent in a company's financing receivables, how a company analyzes and
assesses credit risk in determining its allowance for credit losses, and the reasons for any changes a company may make in its allowance for credit losses. This update is generally effective for interim and annual reporting periods ending on or
after December 15, 2010; however, certain aspects of the update pertaining to activity that occurs during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. The adoption of
the new guidance had no significant effect on the Manager's overall financial statements.
3.
TRANSACTIONS WITH AFFILIATES
The Manager
has entered into services agreements with MHUSA and Macquarie Financial Holdings Limited ("MFHL"), a member of the Macquarie Group, to receive corporate administrative services for the Manager, including but not limited to, support
services like accounting, human resources, risk management and information technology services. The service fee will equal the base cost of performing or providing those services plus a 10% mark-up where applicable. The Manager recorded charges
related for such services in Due to affiliates—other in the Balance Sheet.
The Manager has also entered into an Accession Agreement with
Macquarie Bank Limited ("MBL"), a member of the Macquarie Group, to become a party to the Omnibus Loan and Deposits Agreement, which allows MBL, or one of its specified affiliates within the Macquarie Group, to provide the Manager with
cash management services. At December 31, 2010, included in Due from affiliates is $2,559,803, including accrued interest, from MBL and at March 31, 2010, included in Due from affiliates is $2,791,792 including accrued interest, from MFHL,
related to the aforementioned agreement.
In December 2009, the Manager received a $1,050,000, interest bearing intercompany loan from its
parent, which is included in Due to affiliates—loan. The loan is renewable every six months and will be used to provide additional contributions to the Fund, if the Fund raises over $7,500,000 in its offering.
As discussed in Note 1, the Manager will earn fees from providing or arranging all services necessary for the operations of Fund One, including those
relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services.
Macquarie Capital
(USA) Inc. (the "Dealer Manager") will act as dealer manager for Fund One and will manage a group of selling dealers, including other unaffiliated broker dealers.
The Manager and the Dealer Manager will receive fees from Fund One for offering services during the offering period including:
•
Selling commission of up to 7% of the offering proceeds from each share sold by the Dealer Manager or selling dealers, payable to the Dealer Manager
(and re-allowed to unaffiliated selling dealers);
•
Due diligence expense reimbursement for detailed and itemized bona fide accountable due diligence expenses, payable to the Dealer Manager (and
re-allowed to unaffiliated selling dealers);
•
Dealer manager fees of 3% of the offering proceeds from each share sold, payable to the Dealer Manager; and
•
Organization and offering expense allowance, which varies based upon the actual organization and offering expenses incurred by the Manager and its
affiliates and the number of shares sold, payable to the Manager.
F-5
Table of Contents
MACQUARIE ASSET MANAGEMENT INC.
NOTES TO UNAUDITED BALANCE SHEETS—(continued)
The Manager and its affiliates will receive fees from Fund One for operating services during the
offering period and on an on-going basis once Fund One's operations have commenced, including acquisition fees, asset management fees, re-leasing fees, remarketing fees, outperformance fees and a reimbursement of operating expenses depending
upon the scope of services the Manager provides to Fund One. As of December 31, 2010 the Manager has recorded a receivable from Fund One of $850,130 related to operating expenses.
4.
SUBSEQUENT EVENTS
The Manager has
evaluated subsequent events through March 15, 2011, which is the date the financial statements were issued.
F-6
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Board of Directors and shareholder of
Macquarie Asset Management Inc.
In our opinion, the accompanying consolidated balance sheets
present fairly, in all material respects, the financial position of Macquarie Asset Management Inc. (a development stage enterprise) (the "Company") and its Subsidiary at March 31, 2010 and 2009 in conformity with accounting
principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on the financial statements based on our audit. We
conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated balance sheets are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated balance sheets, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
May 18, 2010
F-7
Table of Contents
Macquarie Asset Management Inc.
(a development stage enterprise)
Consolidated Balance Sheets
March 31,
2010
March 31,
2009
ASSETS
Current Assets
Cash and cash equivalents
$
—
$
4,808
Due from affiliates
2,833,800
1,713,323
Deferred offering costs
574,135
431,689
Taxes receivable—related party
249,859
31,530
Other assets—related party
233,930
—
Total Current Assets
3,891,724
2,181,350
Non-current Assets
Investment in Macquarie Equipment Leasing Fund
480,475
—
Other assets
1,431
—
Total Non-current Assets
481,906
—
Total Assets
$
4,373,630
$
2,181,350
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accrued offering costs
$
—
$
147,623
Accrued expenses
172,422
62,160
Total Current Liabilities
172,422
209,783
Non-current Liabilities
Due to affiliates—loan
1,050,000
—
Due to affiliates—other
1,045,025
11,178
Total Non-current Liabilities
2,095,025
11,178
Total Liabilities
2,267,447
220,961
Commitments and Contingencies
—
—
Shareholders' Equity:
Shareholders' equity ($0.01 par value; 10,000 shares authorized; 10,000 shares issued)
100
100
Paid in capital
2,449,900
1,999,900
Deficit accumulated during development stage
(343,817
)
(39,611
)
Total Shareholders' Equity
2,106,183
1,960,389
Total Liabilities and Shareholders' Equity
$
4,373,630
$
2,181,350
See accompanying notes to Consolidated Balance Sheets
F-8
Table of Contents
MACQUARIE ASSET MANAGEMENT INC.
(Development Stage Enterprise)
NOTES TO CONSOLIDATED BALANCE SHEETS
1.
ORGANIZATION AND BUSINESS OPERATIONS
Macquarie Asset Management Inc. (the "Manager") was incorporated in Delaware on August 21, 2008. The Manager's fiscal year ends on
March 31. As of March 31, 2009, Macquarie Asset Management Inc. was a wholly owned subsidiary of Macquarie Holdings (U.S.A.) Inc. ("MHUSA"). Subsequently on April 1, 2009, ownership of the Manager was transferred from MHUSA
to Macquarie NB Holdings Inc. ("MNBH"), an affiliate. Both MHUSA and MNBH are members of the Macquarie Group of companies which is comprised of Macquarie Group Limited and its subsidiaries and affiliates worldwide (the "Macquarie
Group"). Macquarie Group Limited is headquartered in Australia and is listed on the Australian Stock Exchange.
The Manager made an
initial contribution of $5,000 to Macquarie Equipment Leasing Fund, LLC (the "Fund"), a Delaware limited liability company. The Fund was a wholly owned subsidiary of the Manager as of March 31, 2009 and the Manager's Balance
Sheet as of that time included consolidated results. As of March 5th, 2010 the Fund reached its minimum offering amount and accepted capital contributions of over $2,500,000 from external shareholders. As of that date the Fund was no longer a
wholly owned subsidiary of the Manager. The Manager made additional capital contributions of $500,000 to the Fund for 53,763 shares at $9.30 per share.
The Fund was formed for the purpose of being an equipment leasing program that will acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. The majority of
the equipment will be leased to corporate clients. The Fund will generate income through the collection of lease rentals and other revenues and through the sale of leased equipment and other portfolio investments.
Macquarie Asset Management Inc. has been appointed the manager of the Fund and will earn fees by providing or arranging all services necessary for the
operations of the Fund, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services. Further, the Fund may be required to reimburse the Manager for costs incurred by them
in managing the Fund and its portfolio of equipment, equipment lease and other equipment-related investments.
The Manager is considered to be
a development stage enterprise. Through March 31, 2010 its activities have primarily consisted of the organization and start-up of the company.
The Fund is currently in its offering period, which commenced on June 19, 2009 and is anticipated to end in June 2011. It is currently in the process of raising capital. As of March 31, 2010,
the Fund has received and accepted cumulative subscriptions for 467,868 shares of limited liability company interest ("Shares") for $4,097,598, net of offering costs including the capital contributions from the Manager.
2.
SIGNIFICANT ACCOUNTING POLICIES
Basis
of Accounting and Use of Estimates
The Consolidated Balance Sheets have been prepared in conformity with accounting principles generally
accepted in the United States of America. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Manager considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents.
F-9
Table of Contents
MACQUARIE ASSET MANAGEMENT INC.
(Development Stage Enterprise)
NOTES TO CONSOLIDATED BALANCE SHEETS—(continued)
Investment in Macquarie Equipment Leasing Fund
The Manager currently accounts for its interest in the Fund under the equity method. Since deconsolidation, the Manager has reduced its investment in the
Fund and recognized a loss based on its ownership percentage.
Income Taxes
Macquarie Corporate and Asset Finance Holdings Inc. ("MCAF") files consolidated federal and state income tax returns, including the results of all the entities within its consolidated tax group.
These income tax returns will include the operations of the Manager. Pursuant to a tax sharing agreement that MCAF and the Manager intend to enter into, MCAF or other members of the consolidated tax group will reimburse the Manager for tax benefits
used by the consolidated tax group.
The Manager uses the liability method in accounting for income taxes. Under this method, deferred income
tax assets and liabilities are determined based on differences between the financial reporting basis and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected
to reverse. Valuation reserves are established when it is determined that it is more than likely than not that the deferred income tax asset will not be realized.
The Manager records its benefit for income taxes as amounts due based upon the estimated taxes that would be due if the Manager had filed its income tax returns on a separate entity basis. The
Manager's share of current and deferred federal and state tax benefits or obligations are recorded as taxes receivable (related party) in the balance sheet.
Development Stage Company
The Manager complies with the reporting requirements of
Accounting Standards Codification ("ASC") 915,
Developmen
t
Stag
e
Entities
.
Deferred Offering Costs
The Manager complies with the requirements of the ASC 340-10,
Other Assets and Deferred Costs—Expenses incurred before the effective
date of an offering of equity securities
. Deferred offering costs consists of legal fees and other direct costs incurred that are directly related to the proposed offering of membership interests in the Fund (the "Proposed Offering"),
and that may be recovered from the Fund upon the completion of the Proposed Offering. The Proposed Offering contemplates the Fund offering membership interests on a "
bes
t
efforts
" basis with the intention of raising up to
$157,200,000 of equity. The Fund paid or accrued $113,711 in organization and offering expense during the first quarter of 2010. The Manager has recorded this as reimbursement of deferred offering costs.
New Accounting Pronouncements
In June
2009, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2009-01. This guidance sets forth the Accounting Standards Codification that will be the single source of authoritative U.S. GAAP for all
nongovernmental entities. The Codification supersedes all existing non-SEC accounting and reporting standards. This guidance is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Since this
guidance only requires amended disclosures concerning the reporting of accounting standards, the adoption of this guidance did not have a material impact on the Manager's financial statements.
F-10
Table of Contents
MACQUARIE ASSET MANAGEMENT INC.
(Development Stage Enterprise)
NOTES TO CONSOLIDATED BALANCE SHEETS—(continued)
In May 2009, the FASB issued Accounting Standards Codification ("ASC") 855
Subsequent
Events
, which sets forth the accounting and disclosure requirements for subsequent events; events that occur after the balance sheet date, but before financial statements are issued or are available to be issued. This guidance requires
disclosure of the date through which subsequent events have been evaluated. If the subsequent events are not recognized in the financial statements, this guidance also requires disclosure of the nature and effect of such in the financial statements.
In February 2010, FASB issued ASU 2010-09
Amendments to Certain Recognition and Disclosure Requirements.
The guidance requires an entity that is either an SEC filer or a conduit bond obligor for conduit debt securities that are traded in a
public market to evaluate subsequent events through the dates financial statements are issued. All other entities are required to evaluate subsequent events through the date financial statements are available to be issued. It also requires all
entities excluding the SEC filers to disclose the dates through which the subsequent events have been evaluated. The adoption of these pronouncements did not have a material impact on the Fund's financial statements.
3.
TRANSACTIONS WITH AFFILIATES
The Manager
has entered into services agreements with MHUSA and Macquarie Financial Holdings Limited ("MFHL"), a member of the Macquarie Group, to receive corporate administrative services for the Manager, including but not limited to, support
services like accounting, human resources, risk management and information technology services. The service fee will equal the base cost of performing or providing those services plus a 10% mark-up where applicable. The Manager recorded charges
related for such services in Due to affiliates—other in the Consolidated Balance Sheet.
The Manager has also entered into an Accession
Agreement with Macquarie Bank Limited ("MBL"), a member of the Macquarie Group, to become a party to the Omnibus Loan and Deposits Agreement, which allows MBL, or one of its specified affiliates within the Macquarie Group, to provide the
Manager with cash management services. At March 31, 2010, included in Due from affiliates is $2,791,792, including accrued interest, from MBL and at March 31, 2009, included in Due from affiliates is $1,713,323 including accrued interest,
from Macquarie Financial Holdings Limited, related to the aforementioned agreement.
In December 2009, the Manager received a $1,050,000, 2.5%
interest bearing intercompany loan from its parent, which is included in Due to affiliates—loan. The loan is renewable every six months and will be used to provide additional contributions to the Fund, if the Fund raises over $7,500,000 in its
offering.
As discussed in Note 1, the Manager will earn fees from providing or arranging all services necessary for the operations of the
Fund, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting and regulatory services.
Macquarie Capital (USA) Inc. (the "dealer manager") will act as dealer manager for the Fund and will manage a group of selling dealers,
including other unaffiliated broker dealers.
The Manager and the dealer manager will receive fees from the Fund for offering services during
the offering period including:
•
Selling commission of up to 7% of the offering proceeds from each share sold by the dealer manager or selling dealers, payable to the dealer manager
(and re-allowed to unaffiliated selling dealers);
•
Due diligence expense reimbursement for detailed and itemized bona fide accountable due diligence expenses, payable to the dealer manager (and
re-allowed to unaffiliated selling dealers);
F-11
Table of Contents
MACQUARIE ASSET MANAGEMENT INC.
(Development Stage Enterprise)
NOTES TO CONSOLIDATED BALANCE SHEETS—(continued)
•
Dealer manager fees of 3% of the offering proceeds from each share sold, payable to the dealer manager; and
•
Organization and offering expense allowance, which varies based upon the actual organization and offering expenses incurred by the Manager and its
affiliates and the number of shares sold, payable to the Manager.
The Manager and its affiliates will receive fees from the
Fund for operating services during the offering period and on an on-going basis once the Fund's operations have commenced, including acquisition fees, asset management fees, re-leasing fees, remarketing fees, outperformance fees and a
reimbursement of operating expenses depending upon the scope of services the Manager provides to the Fund. As of March 31, 2010 the Manager has a receivable from the Fund of $96,000 related to acquisition fees and $117,308 related to operating
expenses charged to the Fund.
4.
SUBSEQUENT EVENTS
The Manager has
evaluated subsequent events through May 18, 2010, which is the date the financial statements were issued.
F-12
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Member of
Macquarie
Equipment Leasing Fund Two, LLC
In our opinion, the accompanying balance sheet presents fairly, in all material respects, the financial
position of Macquarie Equipment Leasing Fund Two, LLC (a development stage enterprise) (the "Company") at February 28, 2011 in conformity with accounting principles generally accepted in the United States of America. This financial
statement is the responsibility of the Company's management; our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit of this statement in accordance with auditing standards of the
Public Company Accounting Oversight Board (United States), which require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet, assessing the accounting principles used and significant estimates made by management, and evaluating the overall balance sheet presentation. We believe that our audit of
the balance sheet provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
New York, New York
March 15, 2011
F-13
Table of Contents
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
(a development stage enterprise)
Balance Sheet
February 28, 2011
ASSETS
Cash and cash equivalents
$
2,000
Total assets
$
2,000
LIABILITIES AND MEMBER'S EQUITY
Commitments and contingencies
—
Shares of membership interests, $10.00 par value as may be reduced (i) under a distribution reinvestment plan, (ii) for
volume discounts, or (iii) for reductions in selling commissions Authorized: 21,555,756 shares; Issued and outstanding: 200 shares as of Feb 28, 2011
$
2,000
Total liabilities and member's equity
$
2,000
See accompanying notes to Balance Sheets
F-14
Table of Contents
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
(a development stage enterprise)
NOTES TO BALANCE SHEET
1.
ORGANIZATION AND BUSINESS OPERATIONS
Macquarie Equipment Leasing Fund Two, LLC ( the "Fund"), a Delaware limited liability company, was formed on January 19, 2011 for the
purpose of being an equipment leasing program that will acquire a diversified portfolio of equipment, equipment leases and other equipment-related investments. The majority of the equipment will be leased to corporate clients. The Fund will generate
income through the collection of lease rentals and other revenues and through the sale of leased equipment and other portfolio investments. The Fund has selected March 31 as its fiscal year end, until such time as the Fund achieves its initial
closing date, whereupon the fiscal year end shall become December 31.
The manager of the Fund is Macquarie Asset Management Inc. (the
"Manager"), a member of the Macquarie Group of companies which is comprised of Macquarie Group Limited and its subsidiaries and affiliates worldwide (the "Macquarie Group"). Macquarie Group Limited is headquartered in Australia
and is listed on the Australian Stock Exchange. The Manager will earn fees by providing or arranging all services necessary and desirable for the operations of the Fund, including those relating to equipment acquisitions and disposals, asset
management and administrative, reporting and regulatory services. Further, the Fund will reimburse the Manager for costs incurred by them in managing the Fund and the Fund's portfolio of equipment, equipment lease and other equipment-related
investments.
The initial capitalization of the Fund was $2,000 from its Manager. The Fund is offering membership interests on a "
best
efforts
" basis with the intention of raising up to $214,000,004 of equity. Until the Fund receives and accepts subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering, no fees will be payable
by the Fund to the Company. If the Fund does not receive subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering, all subscription funds deposited by the subscribers shall be returned to those
subscribers together with any interest earned thereon and without deduction for fees, commissions or expenses. If the Fund receives and accepts subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering,
the Fund expects the share offering period to last for up to 24 months from the date of the offering.
The Fund is considered to be a
development stage enterprise as no operations have commenced. Its sole activity through February 28, 2011 consisted of the organization and start-up of the Fund.
2.
SIGNIFICANT ACCOUNTING POLICIES
Basis
of Accounting and Use of Estimates
The financial statements have been prepared in conformity with accounting principles generally accepted
in the United States of America. This requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
Actual results could differ from those estimates.
Cash and Cash Equivalents
The Fund considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents are maintained with one
financial institution.
Development Stage Enterprise
The Company complies with the reporting requirements of Accounting Standards Codification ("ASC") 915,
Developmen
t
Stag
e
Entities
.
F-15
Table of Contents
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
(a development stage enterprise)
NOTES TO BALANCE SHEET—(continued)
New Accounting Pronouncements
The Fund does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the Balance Sheet.
3.
TRANSACTIONS WITH AFFILIATES
As
discussed in Note 1, the Fund will pay fees to the Manager for providing or arranging all services necessary for its operations, including those relating to equipment acquisitions and disposals, asset management and administrative, reporting
and regulatory services. Until the Fund receives and accepts subscriptions for a minimum offering amount of $1,200,000 within 12 months from the date of the offering, no fees will be payable by the Fund to the Company.
Macquarie Capital (USA) Inc. (the "Dealer Manager") will act as dealer manager for the Fund and will manage a group of selling dealers,
including other unaffiliated broker dealers.
The Fund will pay the Manager and the Dealer Manager fees for services provided to the Fund
during the offering period including:
•
Selling commission of up to 7% of the offering proceeds from each share sold by the Dealer Manager or selling dealers, payable to the Dealer Manager
(and re-allowed to unaffiliated selling dealers);
•
Due diligence expense reimbursement up to 0.5% of the offering proceeds from each share sold, payable to the Dealer Manager (and re-allowed to
unaffiliated selling dealers);
•
Dealer manager fees of 3% of the offering proceeds from each share sold, payable to the Dealer Manager; and
•
Organization and offering expense allowance, which varies based upon the number of shares sold, payable to the Manager. Organization and offering
expense allowance is calculated as follows:
¡
2.4% of the offering proceeds from each share sold for the first 3,500,000 shares;
¡
2.0% of the offering proceeds from each share sold for shares sold that exceed 3,500,000 but amount to 10,000,000 or fewer shares; and
¡
1.72% of the offering proceeds from each share sold for shares sold that exceed 10,000,000 shares.
The Fund will pay the Manager and its affiliates fees for operating services performed during the offering period and on an on-going basis once the Fund
has commenced operations, including:
•
Acquisition fees of 3% of the purchase price that the Fund pays for each item of equipment or direct or indirect interest in equipment acquired,
including under lease agreements, trading transactions, residual value guarantees, pay per use agreements, forward purchase agreements, total return swaps, participation agreements, options, other equipment-related transactions, joint ventures,
special purpose vehicles and other company arrangements;
•
Asset management fees equal to the lesser of: (a) (i) 5% of gross rental payments from non-full payout leases (except that 1% of gross rental
payments shall be payable with respect to non-full payout leases for which management services are performed by non-affiliates under the Company's supervision); (ii) 2% of gross rental payments from full payout leases which contain net
lease provisions; and (iii) 7% of gross rental payments from equipment for which the Fund provides services in addition to equipment management relating to the continued and active operation of the Fund's equipment such as,
F-16
Table of Contents
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
(a development stage enterprise)
NOTES TO BALANCE SHEET—(continued)
but not limited to, ongoing marketing and re-leasing of equipment and hiring or arranging for the hiring of crews or operating personnel for the Fund's equipment and similar services; or
(b) the amount of fees which are competitive for similar services;
•
Re-leasing fees depending upon the rental payments generated from equipment that is re-leased after lease expiration. Re-leasing fees are calculated as
an amount equal to the lesser of: (i) 2% of gross rental payments derived from the re-lease of equipment after the time that the re-lease of such equipment has been consummated to a different lessee as a result of the efforts of the Company or
its affiliates; or (ii) re-leasing fees that are competitive for comparable services for similar equipment transactions; provided, however, that no re-leasing fees shall be paid if the Company receives asset management fees equal to 7% of the
gross rental payments;
•
Remarketing fees in the amount equal to the lesser of (i) 3% of the purchase price paid to the Fund by the purchaser of the investment, or
(ii) one-half of reasonable, customary and competitive brokerage fees paid for services rendered in connection with the sale of equipment of similar size, type and location. Payment of remarketing fees shall be subordinated until such time when
investor return has been achieved. "Investor return" means such time when the aggregate amount of distributions to the members equals, as of any determination date, an amount equal to an eight percent (8.0%) per annum internal rate of
return compounded annually on all capital contributions of members;
•
Out-performance fees depending upon the extent to which investor return has been achieved Prior to the time that investor return is achieved, cash
distributions will be made 99.0% to the Fund's members and 1.0% to the Company. After the time that investor return is achieved, cash distributions will be made 80.0% to the Fund's members and 20.0% to the Company; and
•
Reimbursement of operating expenses depending upon the scope of services the Manager provides to the Fund.
4.
EQUITY CONTRIBUTION
The Manager has made
an initial equity contribution of $2,000 to the Fund for 200 shares of membership interests ($10 per share).
F-17
Table of Contents
APPENDIX A
MACQUARIE EQUIPMENT LEASING
FUND TWO, LLC
A Delaware Limited Liability Company
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
Dated as of January 19, 2011
Table of Contents
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.
A-1
ARTICLE 2. ORGANIZATION.
A-13
2.1
Formation
A-13
2.2
Name
A-13
2.3
Registered Office; Registered Agent; Principal Office; Other Offices; Address of
Members
A-13
2.4
Purposes
A-13
2.5
Types of Equipment
A-14
2.6
Powers
A-14
2.7
Foreign Qualification
A-14
2.8
Term
A-14
2.9
No State-Law Partnership
A-14
ARTICLE 3. MEMBERS AND CAPITAL.
A-15
3.1
The Initial Member
A-15
3.2
Members
A-15
3.3
Fund Capital
A-16
3.4
Capital Accounts
A-16
3.5
Loans by Members
A-17
3.6
No Right to Return of Capital
A-17
ARTICLE 4. MANAGER.
A-17
4.1
Powers and Duties
A-17
4.2
Limitations on the Exercise of Powers of Manager
A-20
4.3
Reliance on Reports and Information by Manager
A-22
4.4
Limitation of Liability
A-23
4.5
Right to Indemnification
A-23
4.6
Compensation of the Manager and its Affiliates
A-24
4.7
Other Interests of the Manager and its Affiliates
A-26
ARTICLE 5. POWERS AND LIABILITIES OF MEMBERS.
A-26
5.1
No Control Over Fund Business
A-26
5.2
Limited Liability
A-26
ARTICLE 6. DISTRIBUTIONS AND ALLOCATIONS.
A-27
6.1
Distributions of Cash
A-27
6.2
Allocations of Profits and Losses
A-27
6.3
Tax Allocations; Code Section 704(c); Revaluations
A-30
6.4
Distributions and Allocations Among the Members
A-31
6.5
Compliance with NASAA Guidelines Regarding Front-End Fees
A-32
6.6
Return of Uninvested Capital Contribution
A-32
6.7
Members' Return of Investment in the Fund
A-32
6.8
No Distributions in Kind
A-32
6.9
Fund Entitled to Withhold
A-32
ARTICLE 7. WITHDRAWAL OF THE MANAGER.
A-33
7.1
Voluntary Withdrawal
A-33
7.2
Involuntary Withdrawal
A-33
7.3
Consequences of Withdrawal
A-33
7.4
Continuation of Fund Business
A-34
ARTICLE 8. TRANSFER OF UNITS.
A-34
8.1
Member Withdrawal
A-34
8.2
Assignment
A-34
i
Table of Contents
8.3
Substitution
A-36
8.4
Status of an Assigning Member
A-36
8.5
Repurchase of Shares Held by Foreign Partners
A-36
8.6
Redemption of Shares
A-37
8.7
Cancellation of Shares
A-37
8.8
Shares by Assignment
A-37
ARTICLE 9. DISSOLUTION AND WINDING-UP.
A-38
9.1
Events Causing Dissolution
A-38
9.2
Winding-Up of the Fund; Capital Contribution by the Manager Upon Dissolution
A-38
9.3
Application of Liquidation Proceeds Upon Dissolution
A-39
ARTICLE 10. FISCAL MATTERS AND REPORTS.
A-39
10.1
Title to Property and Bank Accounts
A-39
10.2
Maintenance of and Access to Basic Fund Documents
A-39
10.3
Accounting Decisions
A-40
10.4
Reports
A-41
10.5
Tax Returns and Tax Information
A-43
10.6
Federal Tax Elections
A-43
10.7
Tax Matters Partner
A-43
10.8
Reports to Federal and State Authorities
A-43
10.9
Special Direction and Consent Regarding Possible Issuance of Final Regulations Affecting Issuance of
 Partnership Interests for Services
A-44
ARTICLE 11. MEETINGS AND VOTING RIGHTS OF THE MEMBERS
A-44
11.1
Meetings of the Members
A-44
11.2
Voting Rights of the Members
A-45
ARTICLE 12. AMENDMENTS.
A-45
12.1
Amendments by the Manager
A-45
12.2
Amendments with the Consent of the Majority Interest
A-46
ARTICLE 13. SPECIAL POWER OF ATTORNEY
A-46
13.1
Execution of Power of Attorney
A-46
13.2
Amendments to Agreement and Certificate of Formation
A-46
13.3
Special Power of Attorney
A-46
ARTICLE 14. GENERAL PROVISIONS
A-47
14.1
Notices
A-47
14.2
Reliance by Third Parties
A-47
14.3
Entire Agreement
A-47
14.4
Effect of Waiver or Consent
A-47
14.5
Binding Effect
A-47
14.6
Governing Law
A-47
14.7
Further Assurances
A-48
14.8
Waiver of Certain Rights
A-48
14.9
Notice to and Consent of Members
A-48
14.10
Counterparts
A-48
14.11
Headings
A-48
14.12
Remedies
A-48
14.13
Severability
A-48
14.14
Certain Conventions
A-48
ii
Table of Contents
This LIMITED LIABILITY COMPANY OPERATING AGREEMENT (this
"Agreement") of MACQUARIE EQUIPMENT LEASING FUND TWO, LLC, a Delaware limited liability company (the "Fund"), is executed as of the
[x] day of January, 2011 by and among the Fund and Macquarie Asset Management, Inc., as its Manager and the Initial
Member.
WITNESSETH:
WHEREAS, the Fund was formed by the filing of a Certificate of Formation with the Secretary of the State of Delaware on January [x], 2011; and
WHEREAS, the parties hereto wish to enter into this Agreement in order to set forth their binding agreement as to the affairs of the
Fund, the conduct of its business and certain rights with respect to the relationship among the parties hereto.
NOW
THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS.
As used in this Agreement, the following terms shall (unless otherwise expressly provided herein) have the following meanings:
"Acquisition Expenses" shall mean expenses related to the selection acquisition and documentation of Investments
and potential Investments, including but not limited to (i) legal fees and expenses, (ii) travel and communications expenses, (iii) costs of credit reports, appraisals, valuations, inspections, searches and reference materials used to
evaluate transactions, (iv) non-refundable option payments on equipment and other personal property, (v) administrative and clerical expenses, (vi) accounting, tax and auditing fees and expenses, and (vii) miscellaneous other
expenses.
"Acquisition Fees" shall mean the total of all fees and commissions paid by any party in connection with
the initial purchase of Investments. Any commission, selection fee, financing fee, nonrecurring management fee, or other similar fee, however designated, shall be included in the computation of Acquisition Fees. Acquisition Fees shall not include
Acquisition Expenses.
"Act" shall mean the Delaware Limited Liability Company Act (6 Del.C. § 18-101, et
seq.), as amended from time to time, or any successor statute thereto.
"Adjusted Capital Account Deficit" shall
mean, with respect to any Member, the deficit balance if any, in such Member's Capital Account as of the end of the Fund taxable year, after giving effect to the following adjustments: (a) crediting to such Capital Account any amounts
which such Member is obligated to restore or is deemed to be obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and (b) debiting from such Capital Account the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4),(5) and (6). This definition is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted consistently therewith.
"Adjusted Capital Contribution" means, as to any Member, as determined from time to time, the Member's Capital
Contribution reduced, but not below zero, by:
(a) all distributions previously made to the Member by the Fund
which are deemed by the Manager to reduce the Member's Capital Contribution; and
A-1
Table of Contents
(b) all payments previously made to the Member in Redemption of a portion or
all of the Member's Shares under Section 8.5 or 8.6.
"Administrator" shall mean the official or agency
administering the securities laws of a state.
"Affiliate" shall mean with respect to any Person:
(a) any other Person directly or indirectly controlling, controlled by or under common control with such Person;
(b) any other Person owning or controlling 10% or more of the outstanding voting securities of such Person;
(c) any officer, director or partner of such Person; and
(d) if such other Person is an officer, director or partner, any company which such Person acts in such capacity.
"Affiliated Investment" shall mean any Investment in which the Manager, any of its Affiliates or any Program either
has or in the past has had an interest, but excluding any Joint Venture.
"Affiliated Member" shall mean any
officer, employee or securities representative of the Manager or any Affiliate of the Manager or of any Selling Dealer who is admitted as a Member at a Closing.
"Agreement" shall mean this Limited Liability Company Operating Agreement, as the same may hereafter be amended, supplemented or restated from time to time.
"Applicable Redemption Price" shall mean, with respect to any Share, the following amount (determined as of the date of
redemption of such Share):
(a) during the Offering Period, the lesser of (i) $9.30 per Share and
(ii) $9.00 per share for shares purchased under the DRP, in all cases, unless such redemption is requested due to the verifiable death or permanent disability of the Member, in which case the amount shall be (i) the lesser of $10.00 per
Share and (ii) $9.00 per share for shares purchased under the DRP, in all cases minus cash distributions received and distributions used to purchase shares under the DRP;
(b) during the Operating Period, the lesser of (i) $9.50 per Share and (ii) $9.00 per share for shares purchased
under the DRP, in all cases plus a 5% annual return for each full twelve (12) month period of membership, minus cash distributions received and distributions used to purchase shares under the DRP; and
(c) during the Liquidation Period, a price per Share equal to the net asset value per Share as of the date of redemption,
as determined by the Manager.
For purposes of this Agreement, (i) the death of a Member shall be verified by the
delivery to the Fund by the Member's representative of a valid death certificate, certified by the appropriate medical or government authority, and (ii) permanent disability of a Member shall be verified by delivery to the Fund by the
Member or the Member's representative of the opinion of an impartial, reputable physician declaring that the Member is unable to continue, or obtain, employment indefinitely due to a physical or mental disability or illness that has existed for
a continuous period of at least six months.
"Asset Management Fee" shall mean the fee payable to the Manager and
its Affiliates for actively managing the leasing of the Fund's Equipment equal to the lesser of: (a) (i) 5% of Gross Rental Payments from Non-Full Payout Leases (except that 1% of Gross Rental Payments shall be payable with respect to
Non-Full Payout Leases for which management services are performed by non-Affiliates under the Manager's supervision);
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(ii) 2% of Gross Rental Payments from Full Payout Leases which contain Net Lease provisions; and (iii) 7% of Gross Rental Payments from Equipment for which the Fund provides services in
addition to Equipment management relating to the continued and active operation of the Fund's Equipment such as, but not limited to, ongoing marketing and re-leasing of Equipment and hiring or arranging for the hiring of crews or operating
personnel for the Fund's Equipment and similar services; or (b) the amount of fees which are competitive for similar services.
"Assignee" shall mean any Person to whom any Shares have been Assigned, in whole or in part, in a manner permitted by Section 8.2 of this Agreement.
"Assignment" shall mean, with respect to any Shares, the offer, sale, assignment, transfer, gift or other disposition of, such
Share, whether voluntarily or by operation of law, except that in the case of a bona fide pledge or other hypothecation, no Assignment shall be deemed to have occurred unless and until the secured party has exercised his right of foreclosure with
respect thereto; and the terms "Assign" and "Assigning" have a correlative meaning.
"Capital
Account" shall mean the capital account maintained for each Member pursuant to Section 3.4 of this Agreement.
"Capital Contributions" shall mean (a) as to the Manager, its $2,000 cash contribution, plus any additional amounts as may
be contributed by the Manager and (b) as to any other Member, the gross amount of the investment in the Fund actually paid by such Member for Shares, without deduction for Front-End Fees.
"Cash Distributions" shall mean, with respect to the Members, distributions of Cash Flow made to such Members by the Fund
during the Offering Period and Operating Period on a monthly basis equal to the aggregate amount of such Members' Capital Contributions (as such Capital Contributions are reduced by any amounts of uninvested Capital Contributions distributed to
such Members pursuant to Section 6.6, by any amounts paid to such Members for the redemption of such Members' Shares pursuant to Sections 8.5 and 8.6 and by distributions in any prior month in excess of one-twelfth of the Cash Distribution
Rate on such Members' Capital Contributions) times one-twelfth of the Cash Distribution Rate.
"Cash Distribution
Rate" shall mean the rate of distributions to be paid on a Member's Capital Contributions as determined by the Manager, in the Manager's sole discretion.
"Cash Flow" shall mean cash on hand derived from operating the Fund and the Sale of Fund Investments and shall include Reserves.
"Certificate" has the meaning specified in Section 2.1 of this Agreement.
"Closing" shall mean the admission of Members to the Fund in accordance with Section 3.2 of this Agreement.
"Closing Date" shall mean any date on which any Member shall be admitted to the Fund, which may occur on the Initial Closing
Date or any subsequent Closing Date up to and including the Final Closing Date.
"Code" shall mean the Internal
Revenue Code of 1986, as amended, and in effect from time to time, or corresponding provisions of subsequent federal revenue laws.
"Consent" shall mean either (a) consent given by vote at a meeting called and held in accordance with the provisions of Section 11.1 of this Agreement or (b) the written consent
without a meeting, as the case may be, of any Person to do the act or thing for which the consent is solicited, or the act of granting such consent, as the context may require.
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"Controlling Person" shall mean, with respect to the Manager or any of its
Affiliates, any of its chairmen, directors, presidents, or other executive or senior officers, any holder of a 5% or larger equity interest in the Manager or any such Affiliate, or any Person having the power to direct or cause the direction of the
Manager or any such Affiliate, whether through the ownership of voting securities, by contract or otherwise.
"Dealer
Manager" shall mean Macquarie Capital (USA) Inc., an Affiliate of the Manager, and any successor thereto.
"Dealer
Manager Fees" shall mean the fee payable by the Fund to the Dealer Manager in an amount equal to $0.30 per Share sold.
"Discount Rate" is the discount rate that, when applied to (i) the minimum rental payments under a Lease, plus (ii) the
estimated fair value of the Equipment to the lessor at the end of the Lease term, causes the aggregate present value at the beginning of the Lease term to equal the purchase price of the Equipment.
"Dissolution Event" has the meaning specified in Section 9.1 of this Agreement.
"Distribution Reinvestment Plan" or "DRP" shall mean a plan adopted by the Fund to allow Members to purchase
additional Shares with distributions received from the Fund.
"Due Diligence Expenses" shall mean the fees and
expenses actually incurred for bona fide, detailed and itemized, accountable due diligence efforts expended in connection with the Offering.
"Effective Date" shall mean the date the Registration Statement is declared effective by the SEC.
"Equipment" shall mean the equipment acquired and owned by the Fund to be leased or sold by the Fund to others, as well as rights relating to equipment (including residual rights) and related
property, real or personal, acquired by the Fund, or in which the Fund has acquired a direct or indirect interest (including pursuant to any lease agreements, trading transactions, residual value guarantees, forward purchase agreements, total lease
return swaps, participation agreements, equipment purchase options, pay per use agreements or other equipment related transactions) of the types described in Section 2.5 of this Agreement, and shall also be deemed to include other tangible and
intangible real or personal property which at any time is owned in fee simple or subject to a Lease.
"ERISA" shall
mean the Employee Retirement Income Security Act of 1974, as amended.
"Escrow Account" shall mean an
interest-bearing account established and maintained by the Manager with the Escrow Agent, in accordance with the terms of the Escrow Agreement, for the purpose of holding, pending the distribution thereof in accordance with the terms of this
Agreement, any Subscription Funds received from subscribers, including Persons who are to be admitted as Members as a result of the Closing occurring on the Initial Closing Date.
"Escrow Agent" shall mean Wells Fargo Bank or another United States banking institution with at least $50,000,000 in assets,
which shall be selected by the Manager to serve in such capacity pursuant to the Escrow Agreement.
"Escrow
Agreement" shall mean that certain Escrow Agreement between the Fund, the Manager, the Dealer Manager and the Escrow Agent, substantially in the form filed as an exhibit to the Registration Statement.
"Final Closing Date" shall mean the last Closing Date on which any Member (other than a Substitute Member) shall be admitted to
the Fund, which shall be as soon as practicable following the Termination Date.
"FINRA" shall mean the Financial
Industry Regulatory Authority.
"Fiscal Period" shall mean any interim accounting period established by the Manager
within a Fiscal Year.
"Fiscal Quarter" shall mean, for each Fiscal Year, the three-calendar-month period which
commences on the first day of such Fiscal Year or any of each subsequent three-calendar-month period.
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"Fiscal Year" shall mean the fiscal year of the Fund, which shall:
(i)
until such time as the Initial Closing Date is achieved, commence on each April 1 and end on each March 31; and
(ii)
upon the Initial Closing Date, the fiscal year end shall commence on each January 1 and end on each December 31,
provided, however, that (a) in the case of the Fund's first fiscal year, "Fiscal Year" shall mean the period from and including the
date on which the Fund is formed under the Act to and including the immediately following December 31 and (b) the final "Fiscal Year" of the Fund shall end on the date on which the winding up of the Fund is completed.
"Front-End Fees" shall mean fees and expenses paid by any Person for any services rendered during the Fund's organization
and offering or acquisition phases including Selling Commissions, Due Diligence Reimbursements, Dealer Manager Fee, O&O Expense Allowance, Acquisition Fees, Acquisition Expenses and all other similar fees however designated. Notwithstanding the
foregoing, Front-End Fees shall not include any Acquisition Fees or Acquisition Expenses paid by a manufacturer of Equipment to any of its employees unless such Persons are Affiliates of the Manager.
"Full-Payout Lease" shall mean any lease pursuant to which the aggregate non-cancelable rental payments (which shall not
include payment for services to be provided under the lease, such as asset management, maintenance and other services) due during the initial term of such lease, on a net present value basis using the Discount Rate, are sufficient to permit the Fund
to recover the Purchase Price of the Equipment subject to such lease. A Full-Payout Lease includes any agreement, arrangement or other understanding (such as agreements for hire, use or bailment agreements) entered into or acquired by the Fund,
whether directly by the Fund or indirectly through one or more Persons and regardless of whether such lease is documented as a lease agreement or similar document or of an interest in the residual value of the Equipment that is the subject of such
agreement, arrangement or other understanding, including, without limitation, lease agreements, pay per use agreements, residual value guarantees, forward purchase agreements, total return swaps, participation agreements, options, and other
Equipment related transactions.
"Fund" shall mean Macquarie Equipment Leasing Fund Two, LLC.
"Fund Loan" has the meaning specified in Section 4.1(e)(ix) of this Agreement.
"Fund Minimum Gain" has the same meaning as the term "partnership minimum gain" in Treas. Reg. Sections 1.704-2(b)(2)
and (d).
"Fund Nonrecourse Deductions" shall have the same meaning as the term "nonrecourse deductions"
in Treas. Reg. Sections 1.704-2(b)(1) and 1.704-2(c).
"Gross Asset Value" shall mean, with respect to any asset of
the Fund, the asset's adjusted tax basis, except that:
(a) the initial Gross Asset Value of any asset
contributed by a Member to the Fund shall be the fair market value of such asset on the date of contribution;
(b) the Gross Asset Values of all Fund assets shall be adjusted to equal their respective gross fair market values at such
times as the Members' Capital Accounts are adjusted pursuant to Section 3.4(g) hereof;
(c) the Gross
Asset Value of any Fund asset distributed to any Member shall be the gross fair market value of such asset on the date of distribution;
(d) to the extent not otherwise reflected in the Members' Capital Accounts, the Gross Asset Values of Fund assets shall be increased (or decreased) to appropriately reflect any adjustments to the
adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Treas. Reg.
Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this paragraph (d) to the extent that an adjustment pursuant to paragraph (b) above is required in connection with a
transaction that would otherwise result in an adjustment pursuant to this paragraph (d); and
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(e) if on the date of contribution of an asset or a revaluation of an asset
in accordance with (b)-(d) above, the adjusted tax basis of such asset differs from its fair market value, the Gross Asset Value of such asset shall thereafter be adjusted by reference to the depreciation method described in Treas. Reg.
Section 1.704-1(b)(2)(iv)(g)(3).
"Gross Income" shall mean the gross income of the Fund within the meaning of
Section 61(a) of the Code.
"Gross Offering Proceeds" shall mean the aggregate gross amount of Capital
Contributions made by the Members other than the Initial Member in the Offering.
"Gross Rental Payments" shall mean
revenue or income from any and all sources with respect to a Lease or similar document including, but not limited to, (a) rental, royalty, lease, hire, license, usage, service, charter and other payments made by Lessees under or otherwise with
respect to Leases or similar documents whether or not pledged to a Lender and including such payments assigned for direct payment to such Lenders and (b) interest earned on funds on deposit for the Fund (other than Subscription Funds). Gross
Rental Payments includes receipts from any and all sources (whether received by the Fund or by a Lender) with respect to any Full- Payout Lease or Non-Full Payout Lease, as applicable, (including late payment charges and payments made by guarantors)
regardless of whether (a) such receipts are pledged or assigned for payment to a Lender by the Fund, the Lessee or a third party or (b) title to the Equipment is held by the Lessee, the Fund, a Lender or another Person.
"Gross Share Price" shall mean the gross purchase price paid by a Member for his Shares, which shall be $10.00 for each whole
Share purchased by a Member; provided, however, that for Members who purchase Shares from a broker who does not charge a Selling Commission or who charges a reduced Selling Commission, or for whom, based on established volume discounts, the amount
of Selling Commissions is reduced, the Gross Share Price is an amount per share equal to (i) $10.00 less (ii) the amount by which the Selling Commission is reduced (or $9.30 if no Selling Commission is charged) and provided further, that
for Members who purchase Shares pursuant to the DRP, the Gross Share Price is $9.00 per Share.
"Impermissible
Purpose" has the meaning specified in Section 10.2(c) of this Agreement.
"Indebtedness" shall mean, with
respect to any Person as of any date, all obligations of such Person (other than capital, surplus, deferred income taxes and, to the extent not constituting obligations, other deferred credits and reserves) that could be classified as liabilities
(exclusive of accrued expenses and trade accounts payable incurred in respect of property purchased in the ordinary course of business which are not overdue or which are being contested in good faith by appropriate proceedings and are not so
required to be classified on such balance sheet as debt) on a balance sheet prepared in accordance with generally accepted accounting principles as of such date.
"Independent Director" means a director who at the time of appointment to the Manager's board of directors is not, and within the last two years has not been, directly or indirectly
associated with the Manager or its Affiliates by virtue of (i) ownership of an interest in the Manager or its Affiliates; (ii) employment by the Manager or its Affiliates; (iii) service as an officer or director of the Manager's
Affiliates; (iv) performance of services, other than as a director, for the Fund; or (v) maintenance of a material business or professional relationship with the Manager or any of its Affiliates. A business or professional relationship is
considered material if the gross revenue derived by the director from the Manager and its Affiliates exceeds 5% of either the director's annual gross revenue during either of the last two years or the director's net worth on a fair market
value basis. An indirect relationship shall include circumstances in which a director's spouse, parents, children, siblings, mothers or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with the
Manager, any of its Affiliates or the Fund.
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"Initial Closing Date" shall mean the first Closing Date for the Fund on which
Members holding in the aggregate Shares equal to, or greater than, the Minimum Offering are admitted to the Fund, and which shall be not later than fifteen (15) days after Subscription Funds are released from the Escrow Account to the Fund.
"Initial Member" shall mean the Manager.
"Investments" shall mean the Fund's portfolio of Equipment and Leases and any interest of the Fund in Equipment and Leases of any nature whatsoever, whether such interest is owned directly
or indirectly, through the ownership of equity or other instruments, whether held through a nominee, Joint Venture, partnership or otherwise, including, without limitation, lease agreements, pay per use agreements, trading transactions, residual
value guarantees, forward purchase agreements, total lease return swaps, participation agreements, equipment purchase options, other Equipment related transactions, or any other agreement evidencing an interest in Equipment and Leases and in any
related matters.
"Investment in Equipment" shall mean the aggregate amount of Capital Contributions and
Indebtedness actually paid or allocated to the purchase, manufacture or renovation of Equipment acquired by the Fund, together with other cash payments such as interest, taxes and Reserves allocable thereto, but excluding Front-End Fees.
"Investor Return" shall mean the time when the aggregate amount of distributions to the Members equals, as of any determination
date, an amount equal to a pre-tax eight percent (8.0%) per annum internal rate of return compounded daily on all Capital Contributions of Members, calculated on the date of distribution and taking into account all Capital Contributions and all
distributions, such amount including the aggregate amount of such Members' Capital Contributions. Income earned on escrowed funds and distributed to Members and amounts paid or withheld for taxes on a Member's behalf may be taken into
account in determining whether Investor Return has been achieved.
"Involuntary Withdrawal" shall mean, with respect
to the Manager, the removal or involuntary withdrawal of the Manager from the Fund pursuant to Section 7.2 of this Agreement.
"IRA" shall mean an Individual Retirement Account and its related funding vehicle.
"IRS" shall mean the Internal Revenue Service or any successor agency thereto.
"Joint Venture" shall mean any syndicate, group, pool, partnership, limited liability company, business trust or other unincorporated organization
or other transaction structure through
or by means of which the Fund acts jointly with any Program or with any Affiliate or non-Affiliated Person to make Investments.
"Lease" shall mean any Full-Payout Lease and any Non-Full Payout Lease and any residual value interest therein, including
pursuant to any lease agreements, pay per use agreements, residual value guarantees, forward purchase agreements, total return swaps, participation agreements, options, or other Equipment related transactions.
"Lender" shall mean any Person that lends cash or cash equivalents to the Fund, including any Person that acquires by purchase,
assignment or otherwise an interest in the future rents payable under any Lease and in the related Equipment, and any property securing, any such transaction. A Lender includes any Person that lends cash or cash equivalents to the Fund or any other
Person in connection with a transaction whereby the Person so lending acquires by purchase, assignment or otherwise an interest in the future rents payable under any Lease and in the related Equipment, and any property securing, any such
transaction.
"Lessee" shall mean a lessee, hirer, user, licensee, bailee, charterer or similar person under a
Lease.
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"Liquidation Period" shall mean the period commencing on the first day following
the end of the Operating Period and continuing for the amount of time deemed necessary by the Manager for orderly termination of its operations and affairs and liquidation or disposition of the Fund's Investments and other assets and the
realization of the maximum proceeds therefor, which period is expected to continue for twelve (12) months beyond the end of the Operating Period but which shall last no longer than thirty-six (36) months beyond the end of the Operating
Period.
"Liquidator" has the meaning specified in Section 9.2(a)(i).
"Majority" or "Majority Interest" shall mean Members owning more than 50% of the aggregate outstanding Shares.
"Manager" shall mean Macquarie Asset Management Inc, a Delaware corporation or any other Person which succeeds it
in such capacity as provided for in this Agreement.
"Maximum Offering" shall mean receipt and acceptance by the
Fund of subscriptions by Persons eligible to purchase the total number of Shares registered pursuant to the Registration Statement on or before the Final Closing Date.
"Member" shall mean any Person who is the owner of Shares and who has been admitted to the Fund as a Member and any Person who becomes a Substitute Member in accordance with this Agreement.
There shall be one class of members, whose interests in the Fund shall consist of up to the number of Shares outstanding on the Final Closing Date.
"Member Nonrecourse Debt" has the same meaning as the term "partner nonrecourse debt" in Treas. Reg. Section 1.704-2(b)(4).
"Member Nonrecourse Debt Minimum Gain" shall mean an amount, with respect to each Member Nonrecourse Debt, equal to the Fund
Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treas. Reg. Section 1.704-2(i)(3).
"Member Nonrecourse Deductions" shall have the same meaning as the term "partner nonrecourse deductions" in Treas. Reg. Sections 1.704-2(i)(1) and 1.704-2(i)(2).
"Membership List" shall mean a list, in alphabetical order by name, setting forth the name, address and business or home
telephone number of, and number of Shares held by, each Member. The list shall be printed on white paper in a readily readable type size (in no event smaller than 10-point type) and shall be updated at least quarterly to reflect any changes in its
information.
"Minimum Offering" shall mean receipt and acceptance by the Fund of subscriptions resulting in at
least $1,200,000 in Subscription Funds.
"NASAA Guidelines" shall mean the Statement of Policy regarding Equipment
Programs adopted by the North American Securities Administrators Association, Inc., as in effect on the date of the Prospectus.
"Net Lease" shall mean a Lease under which the Lessee assumes responsibility for, and bears the cost of, insurance, taxes,
maintenance, repair and operation of the leased asset and where the non-cancellable rental payments pursuant to such Lease are absolutely net to the Fund.
"Net Offering Proceeds" shall mean the Gross Offering Proceeds minus Front-End Fees.
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"Net Worth" shall mean, with respect to a Person, the excess of total assets over
total liabilities as determined by generally accepted accounting principles, except that if any such assets have been depreciated, then the amount of depreciation relative to any particular asset may be added to the depreciated cost of such asset to
compute total assets. The amount of depreciation may be added only to the extent that the amount resulting after adding such depreciation does not exceed the fair market value of such asset.
"Non-Full Payout Lease" shall mean any lease, entered into or acquired from time to time by the Fund, pursuant to which the
aggregate non-cancellable rental payments (which shall not include payment for services to be provided under the lease, such as asset management, maintenance and other services) during the initial term of such lease, on a net present value basis
using the Discount Rate, are not sufficient to permit the Fund to recover the Purchase Price of the Equipment subject to such lease. A Non-Full Payout Lease includes any agreement, arrangement or other understanding (such as agreements for hire, use
or bailment agreements) entered into or acquired by the Fund, whether directly by the Fund or indirectly through one or more Persons and regardless of whether such lease is documented as a lease agreement or similar document or of an interest in the
residual value of the Equipment that is the subject of such agreement, arrangement or other understanding, including, without limitation, lease agreements, pay per use agreements, residual value guarantees, forward purchase agreements, total return
swaps, participation agreements, options, other Equipment related transactions.
"Nonrecourse Liability" has the
meaning set forth in Treas. Reg. Section 1.704-2(b)(3).
"Notice" shall mean a writing containing the
information required by this Agreement to be communicated to any Person.
"O&O Expense Allowance" shall mean up
to $0.240 per Share for the first 3,500,000 Shares sold; $0.200 per Share for Shares sold that exceed 3,500,000 Shares but do not exceed 10,000,000 Shares; $0.172 per Share for Shares sold in excess of 10,000,000 Shares; and in each case including
shares sold pursuant to the DRP and to the Manager or its Affiliates.
"Offering" shall mean the offering of Shares
pursuant to the Prospectus.
"Offering Period" shall mean the period from the Effective Date to the Termination
Date.
"Operating Expenses" shall mean and include (a) all costs of personnel (including officers or employees
of the Manager or its Affiliates other than Controlling Persons) involved in the business of the Fund, allocated pro rata to their services performed on behalf of the Fund, but excluding overhead expenses attributable to such personnel; (b) all
costs of borrowed money, taxes and assessments on Investments and other taxes applicable to the Fund; (c) legal, audit, accounting, brokerage, appraisal, valuation, search and other fees; (d) printing, engraving and other expenses and
taxes incurred in connection with the issuance, distribution, transfer, registration and recording of documents evidencing ownership of an interest in the Fund or in connection with the business of the Fund; (e) fees and expenses paid to
independent contractors, bankers, brokers and services, leasing agents and sales personnel consultants and other equipment management personnel, insurance brokers and other agents; (f) expenses (including the cost of personnel as described in
(a) above) in connection with the disposition, replacement, alteration, repair, refurbishment, leasing, managing, invoicing, recording, tracking, registration, licensing, re-leasing, re-licensing, financing, refinancing and operation of
Equipment (including the costs and expenses of insurance premiums, brokerage and leasing and licensing commissions, if any, with respect to its Investments and the cost of maintenance of its Equipment); (g) expenses of organizing, revising,
amending, converting, modifying or terminating the Fund; (h) expenses in connection with distributions made by the Fund to, and communications and bookkeeping and clerical work necessary in maintaining relations with, its Members, including the
costs of printing and mailing to such Person evidences of ownership of Shares and reports of meetings of the Members and of preparation of proxy statements and solicitations of proxies in connection therewith and the costs associated with websites
and maintaining email accounts for Members; (i) expenses in connection with preparing and mailing reports required to be furnished to the Members for
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investor, tax reporting or other purposes, and reports which the Manager deems it to be in the best interests of the Fund to furnish to the Members and to their sales representatives, including
the fees and expenses of a transfer agent and escrow agent; (j) any accounting, computer, statistical or bookkeeping costs necessary for the maintenance of the books and records of the Fund; (k) the cost of preparation and dissemination of
the informational material and documentation relating to potential sale, refinancing or other disposition of Equipment; (l) the costs and expenses incurred in qualifying the Fund to do business in any jurisdiction, including fees and expenses
of any resident agent appointed by the Fund; (m) the costs incurred in connection with any litigation, mediation, arbitration or regulatory proceedings in which the Fund is or may become involved; and (n) all other costs and expenses
necessary to operate the Fund.
"Operating Period" shall mean the period commencing with the Initial Closing Date
and ending five (5) years after the Final Closing Date; provided, however, that such period may be extended, by Notice to the Members, at the discretion of the Manager for a further period of not more than an additional twelve (12) months.
"Operations" shall mean all operations and activities of the Fund except Sales.
"Organization and Offering Expenses" shall mean expenses incurred in preparing the Fund for registration and subsequently
offering the Shares to the public, including all forms of compensation paid to underwriters or broker-dealers or their Affiliates in connection with the Offering and all advertising expenses, except advertising expenses related to the leasing of
Equipment.
"Person" shall mean any natural person, corporation, general partnership, limited partnership, limited
liability company, joint venture, trust, business trust, association, unincorporated organization, country, state, city or other political subdivision, governmental agency or instrumentality, or other entity.
"Profits" or "Losses" shall mean, for any Fiscal Year, the Fund's taxable income or loss for such Fiscal Year,
determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(a) any income of the Fund that is exempt from federal income tax and not otherwise
taken into account in computing Profits or Losses shall be applied to increase such taxable income or reduce such loss;
(b) any expenditure of the Fund described in Code Section 705(a)(2)(B), or treated as such pursuant to Treas. Reg. Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing
Profits and Losses shall be applied to reduce such taxable income or increase such loss;
(c) gain or loss
resulting from a taxable disposition of any asset of the Fund shall be computed by reference to the Gross Asset Value of such asset and the special depreciation calculations described in Treas. Reg. Section 1.704-1(b)(2)(iv)(g), notwithstanding
that the adjusted tax basis of such asset may differ from its Gross Asset Value;
(d) in lieu of the
depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss for such Fiscal Year, there shall be taken into account depreciation, amortization or other cost recovery determined pursuant
to the method described in Treas. Reg. Section 1.704-1(b)(2)(iv)(g)(3); and
(e) any items which are
specially allocated pursuant to Section 6.2(f) shall not be taken into account in computing Profits or Losses.
"Program" shall mean, in addition to the Fund, a limited or general partnership, joint venture, limited liability company,
unincorporated association or similar organization, formed or operated by the Manager or any of its Affiliates for the primary purpose of investment in and the operation of or gain from an interest in Equipment or Leases.
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"Prospectus" shall mean the prospectus included as part of the Registration
Statement on Form S-1 in the final form in which such prospectus is filed with the SEC pursuant to Rule 424 under the Securities Act and as thereafter supplemented or amended pursuant thereto.
"Purchase Price" shall mean, with respect to any Investment, the gross price paid by, or on behalf of, the Fund, including the
cash paid, Indebtedness incurred, assumed or to which the Fund's share of proceeds from the Lease, re-lease, Lease renewal or Equipment sale are subject, and the amount of the related Acquisition Fees on such Investment, plus that portion of
the reasonable, necessary and actual expenses incurred by the Manager or any of its Affiliates in acquiring Investments on an arm's length basis with a view to transferring such Investments to the Fund, which is allocated to the Investments in
question in accordance with allocation procedures employed by the Manager or such Affiliate from time to time. With respect to any Investment sold by the Fund, "Purchase Price" shall mean the price paid to the Fund, including the cash
paid, Indebtedness incurred, assumed or to which the buyer's share of proceeds from the Lease, re-lease, Lease renewal or Equipment sale are subject. Purchase Price shall also include, with respect to options or forward purchase agreements to
acquire Equipment or any interest therein, the sum of the exercise price (including Indebtedness that would be assumed if the option were concurrently exercised) and the price to acquire the option or forward purchase agreement. Notwithstanding the
foregoing, Purchase Price shall not include points or prepaid interest. Purchase Price, with respect to any Investment, including, but not limited to, a residual interest, a Joint Venture interest or an option to acquire a residual interest, may
include the Indebtedness incurred, assumed or to which the Fund's share of proceeds from the Lease, re-lease, Lease renewal or Equipment sale are subject, as well as the aggregate payments associated with such residual interest, joint venture
interest or an option to acquire a residual interest.
"Qualified Plan" shall mean a pension, profit-sharing or
stock bonus plan, including employee trusts, employer IRAs, Keogh Plans and corporate retirement plans meeting the requirements of Sections 401 et seq. of the Code, as amended.
"Qualified Subscription Account" shall mean the interest-bearing account established and maintained by the Fund for the purpose
of holding, pending the distribution thereof in accordance with the terms of this Agreement, of Subscription Funds received from Persons who are to be admitted as Members as a result of Closings to be held subsequent to the Initial Closing Date.
"Registration Statement" shall mean the registration statement for the Shares on Form S-1 filed with the SEC under
the Securities Act which registration statement was declared effective by the SEC.
"Re-Leasing Fees" shall mean a
fee in an amount not to exceed the lesser of: (i) 2% of Gross Rental Payments derived from the re-lease of Equipment after the time that the re-lease of such Equipment has been consummated to a different Lessee as a result of the efforts of the
Manager or its Affiliates; or (ii) the competitive rate charged by others for comparable services for similar equipment transactions; provided, however, that no Re-Leasing Fees shall be paid if the Manager receives Asset Management Fees equal
to 7% of the Gross Rental Payments pursuant to Section 4.6(h) of this Agreement and provided further that Re-Leasing Fees shall only be paid as each rental payment is made over the term of the lease.
"Re-Marketing Fees" shall mean the fee payable to the Manager in the amount equal to the lesser of (i) 3% of the Purchase
Price paid to the Fund by the purchaser of the Investment, or (ii) one-half of reasonable, customary and competitive brokerage fees paid for services rendered in connection with the sale of equipment of similar size, type and location.
"Reserves" shall mean reserves established by the Fund for working capital and contingent liabilities, including
repairs, replacements, contingencies, accruals required by lenders for insurance, compensating balances required by lenders and other appropriate items, in an amount determined by the Manager. Upon the disposition of each Investment, any cash
reserve which was specifically allocated to that Investment need not be maintained thereafter, but may be applied as reserves for other Investments.
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"Sale" shall mean the sale, exchange, involuntary conversion, foreclosure,
condemnation, taking, casualty (other than a casualty followed by refurbishing or replacement), or other disposition of any of the Fund's Investments.
"SEC" shall mean the United States Securities and Exchange Commission.
"Selling Commissions" has the meaning specified in Section 4.6(c) of this Agreement.
"Schedule A" shall mean Schedule A attached to, and made a part of, this Agreement, which sets forth the names, addresses,
Capital Contributions and number of Shares owned by the Members, as amended or supplemented from time to time to add or delete, as the case may be, such information with respect to any Member.
"Secondary Market" has the meaning specified in Section 8.2(c) of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Dealer" shall mean each member firm of FINRA which has been selected by the Dealer Manager to offer and sell Shares
and which has entered into a Selling Dealer Agreement with the Dealer Manager.
"Selling Dealer Agreement" shall
mean each of the agreements entered into between the Dealer Manager and any Seller Dealer, each substantially in the form filed as an exhibit to the Registration Statement.
"Share" shall mean a membership interest in the Fund.
"Subscription Agreement" shall mean the Subscription Agreement substantially in the form attached as an exhibit to the
Prospectus.
"Subscription Funds" shall mean the funds received from a subscriber in respect of a purchase of
Shares.
"Substitute Member" shall mean any Assignee of Shares who is admitted to the Fund as a Member pursuant to
Section 8.3 of this Agreement.
"Substitute Manager" shall mean any successor to the Manager admitted to the
Fund in accordance with Article 7 of the Agreement.
"Syndication Expenses" shall mean all expenditures classified
as syndication expenses pursuant to Treasury Regulations Section 1.709-2(b), including, but not limited to, O&O Expense Allowance. Syndication Expenses shall be taken into account under this Agreement at the time they would be taken into
account under the Fund's method of accounting if they were deductible expenses.
"Tax" or "Taxes"
shall mean all federal, state, local or foreign net or gross income, gross receipts, net proceeds, real property transfer, sales, use, ad valorem, value added, franchise, unincorporated business, bank shares, withholding, payroll, employment,
excise, property, alternative or add-on minimum, environmental or other taxes, assessments, duties, fees, levies or other governmental charges of any nature whatever, whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
"Tax Matters Partner" shall mean the Person designated pursuant to
Section 6231(a)(7) of the Code to manage administrative and judicial tax proceedings conducted at the Fund level by the IRS with respect to Fund matters.
"Term" has the meaning specified in Section 2.8 of this Agreement.
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"Termination Date" shall mean the earliest of (a) the date on which the
Maximum Offering has been sold, (b) twelve (12) months following the Effective Date provided that such twelve-month period may be extended at the discretion of the Manager for a further period of not more than an additional twelve
(12) months and (c) the termination of the Offering by the Manager at any time.
"Treasury Regulation" or
"Treas. Reg." shall mean final or temporary regulations issued by the United States Treasury Department pursuant to the Code.
"Voluntary Withdrawal" shall mean, with respect to the Manager, the voluntary withdrawal from the Fund of the Manager as the Manager of the Fund, or the voluntary sale, assignment, encumbrance
or other disposition of all of the Manager's Shares pursuant to Section 7.1 of this Agreement.
"Withdrawal" shall mean, with respect to the Manager, the voluntary or involuntary withdrawal of such Manager.
ARTICLE 2. ORGANIZATION.
2.1
Formation.
The Fund has been formed as a Delaware limited liability company by the execution and filing of a Certificate of Formation (as the same may be amended
from time to time, the "Certificate") by an authorized person as required by the Act. The rights, powers, duties, obligations and liabilities of the Members (in their respective capacities as such) shall be determined pursuant to the Act
and this Agreement. To the extent that the rights, powers, duties, obligations and liabilities of any Member (in its capacity as such) are different by reason of any provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control.
2.2
Name.
The name of
the Fund shall be Macquarie Equipment Leasing Fund Two, LLC, and all business of the Fund shall be conducted in that name or in such other names that comply with applicable law as the Manager may select from time to time.
2.3
Registered Office; Registered Agent; Principal Office; Other Offices; Address of Members.
The
registered office of the Fund required by the Act to be maintained in the State of Delaware shall be the office of the initial registered agent named in the Certificate or such other office (which need not be a place of business of the Fund) as the
Manager may designate from time to time in the manner provided by law. The registered agent of the Fund in the State of Delaware shall be the initial registered agent named in the Certificate or such other Person or Persons as the Manager may
designate from time to time in the manner provided by law. The principal office of the Fund shall be at such place as the Manager may designate from time to time, which need not be in the State of Delaware, and the Fund shall maintain its books and
records at such principal office. The Fund may have such other offices as the Manager may designate from time to time.
The
places of residence of the Members shall be those addresses set forth opposite their respective names in Schedule A, as such may be supplemented or amended from time to time. Any Member may change his, her or its respective place of residence by
giving Notice of such change to the Fund, which Notice shall be effective five (5) 
days after receipt.
2.4
Purposes.
The Fund has been organized for the purposes of:
(a) acquiring, investing in, purchasing, owning, acquiring or granting options or obligations or rights to purchase, holding, leasing, hiring, renting, licensing, bailing, chartering, sub-leasing, re-leasing, financing, taking beneficial,
economic or equitable interests in, refinancing, borrowing, managing, maintaining, operating, trading, improving, upgrading, modifying, exchanging, assigning, encumbering, creating security interests in, pledging, selling, transferring or otherwise
disposing of, and in all respects otherwise dealing in, or with, and taking any action incidental or related to, Equipment and any other type
of direct or indirect interest (including residual interests, which encompass, among
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other things, the right to Equipment rental and sales proceeds after the payout of debt associated with the Equipment) in Equipment and Leases of all kinds and purchasing equity interests in
Equipment-owning entities or entities owning direct or indirect interests in Equipment; and (b) establishing, acquiring, conducting and carrying on any business suitable, necessary, useful or convenient in connection therewith. Subject to the
provisions of this Agreement, the Fund shall have the power and authority to take any and all actions necessary, appropriate, advisable, desirable or incidental to or for the furtherance and accomplishment of the foregoing purposes. Notwithstanding
anything herein to the contrary, nothing set forth herein shall be construed as authorizing the Fund to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of
Delaware.
2.5
Types of Equipment.
The Equipment acquired by the Fund shall be selected
from among new or used: (a) transportation equipment such as aeronautical, maritime, rail and road transportation; (b) construction, mining and manufacturing equipment; (c) utilities equipment; (d) technological equipment such as
semiconductor, information technology, telecommunications, scientific and medical and other technological equipment; and (e) any other types of equipment which the Manager believes may meet the Fund's investment objectives.
2.6
Powers.
In furtherance of the above purposes, the Fund shall have the power, directly or
indirectly:
(a) to acquire, invest in, purchase or make future commitments to purchase, own, acquire or grant
options or obligations or rights to purchase, hold, lease, hire, rent, license, bail, charter, sub-lease, re-lease, finance, refinance, borrow, manage, maintain, operate, trade, invest in, improve, upgrade, modify, exchange, assign, encumber, create
security interests in, take economic, beneficial or equitable interests in, pledge, sell, transfer or otherwise dispose of, and in all respects otherwise deal in or with and take any action incidental or related to, Equipment and Leases;
(b) to enter into Joint Ventures, partnerships and other business, financing and legal and beneficial ownership
arrangements with respect to Equipment and Leases;
(c) to purchase and hold trust certificates, debt
securities and equity securities issued by any Person;
(d) to lend and borrow money, to issue and accept
evidences of indebtedness in respect thereof, and to secure the same by mortgages or pledges or grants of liens on, or other security interests in, Investments of the Fund and accept such kinds and amounts of security for loans, leases and other
arrangements it makes to others as the Manager shall deem appropriate; and
(e) to do all things, carry on any
activities and enter into, perform, modify, supplement or terminate any contracts necessary to, connected with, or incidental to, or in furtherance of, the purposes of the Fund consistent with the terms of this Agreement.
2.7
Foreign Qualification.
Prior to the Fund's conducting business in any jurisdiction other
than Delaware where qualification is necessary, the Manager shall use its reasonable efforts to cause the Fund to comply (to the extent that procedures for doing so are available and such compliance is reasonably within the control of the Manager in
the relevant jurisdiction) with all requirements necessary to qualify the Fund as a foreign limited liability company in such jurisdiction. At the request of the Manager, each Member shall execute, acknowledge, swear to and deliver all certificates
and other instruments in conformity with this Agreement that are necessary or appropriate to qualify, continue or terminate the Fund as a foreign limited liability company in each such jurisdiction in which the Fund may conduct business from time to
time.
2.8
Term.
The term of the Fund commenced on January 19, 2011 and shall terminate
at midnight on December 31, 2030, unless sooner dissolved as provided in Article 9.
2.9
No State-Law Partnership.
The Members intend that the Fund shall not be a partnership (including, without limitation, a limited partnership) or joint venture, and that no Member or Manager shall be a partner or joint venturer of any other
Member or Manager, for any purposes other than federal, and if applicable, state tax purposes, and this Agreement shall not be construed to the contrary. Notwithstanding the immediately preceding sentence, the Members intend that the Fund shall be
treated as a partnership for federal tax and, if applicable,
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state income tax and local income tax purposes, and each Member and the Fund shall file all Tax returns, and otherwise take all Tax and financial reporting positions, in a manner consistent with
such treatment. Neither the Members nor the Fund shall make any election under Treas. Reg. §301.7701-3, or any comparable provisions of state or local law, to treat the Fund as an entity other than a partnership for federal tax or state or
local income tax purposes.
ARTICLE 3. MEMBERS AND CAPITAL.
3.1
The Initial Member.
The Manager has contributed $2,000 in cash to the Fund.
3.2
Members.
(a) Any Person desiring to become a Member shall execute and deliver to the Manager a Subscription Agreement pursuant to
which, among other things, such Person shall agree to be bound by all terms and provisions of this Agreement, and such other documents as the Manager shall request, which shall be in form and substance satisfactory to the Manager.
(b) Unless more stringent standards are required by an Administrator (which standards shall be disclosed in the
Prospectus) each Member shall either (i) a minimum annual gross income of $70,000 and a minimum Net Worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or (ii) minimum Net Worth of $250,000 (calculated
exclusive of home, home furnishings and automobiles). In the case of fiduciary accounts, these minimum standards must be met by the beneficiary, the fiduciary account, or by the donor or grantor who directly or indirectly supplies the funds to
purchase the Shares if the donor or grantor is the fiduciary.
(c) Each Person desiring to become a Member
shall make a Capital Contribution, in cash, in an amount equal to the Gross Share Price to the capital of the Fund for each Share or fraction thereof purchased. From the date hereof to, but not including, the Initial Closing Date, all Subscription
Funds shall be deposited into the Escrow Account. All eligible subscribers must purchase a minimum of five hundred (500) Shares.
(d) The Manager retains the unconditional right to refuse to admit any subscriber as a Member for any reason whatsoever.
(e) No subscribers shall be admitted to the Fund unless and until the Minimum Offering is achieved. Upon the determination
by the Manager that the Minimum Offering has been achieved, the Manager shall set the Initial Closing Date. Following the Initial Closing Date, weekly or more frequent Closings may be held. As promptly as is practicable following the admission of
each subscriber as Member, the Manager shall send or cause to be sent a confirmation of purchase to each Member. Subscribers who tender Subscription Funds and who are accepted as Members shall be admitted not later than the last day of the calendar
month following the date their subscription was accepted.
(f) The Manager and any Affiliate of the Manager
shall have the right to subscribe for Shares for its own account and for investment purposes only.
(g) From
and after the Initial Closing Date, all Subscription Funds shall be held by the Fund in a Qualified Subscription Account until the release thereof on the applicable Closing Date. Subscriptions for Shares received after the Initial Closing Date shall
promptly be accepted or rejected by the Manager after their receipt by the Fund (but in any event not later than 30 days thereafter) and the Manager shall send or cause to be sent a confirmation of receipt thereof to the subscriber.
(h) On the Initial Closing Date or any subsequent Closing Date, whichever may be applicable, all Subscription Funds then
held in the Escrow Account or any Qualified Subscription Account, as the case may be, together with any interest earned thereon, shall be released to the Fund. If the number of Shares subscribed for as of the Termination Date are insufficient to
constitute the Minimum Offering, all Subscription Funds deposited by any subscriber shall be returned, together with any interest earned thereon and without deduction for any Front-End Fees, to such subscriber. Any Subscription Funds deposited by
any
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subscriber who is not accepted by the Manager to become a Member shall be promptly returned, together with any interest earned thereon and without deduction for any Front-End Fees, to such
subscriber. In no event shall any Subscription Funds be held in the Escrow Account or a Qualified Subscription Account for more than one year beyond the Effective Date before either being released to the Fund upon a Closing or returned to the
subscriber. Notwithstanding the foregoing, no interest will be paid on any Subscription Funds returned unless said Subscription Funds have been held in the Escrow Account or any Qualified Subscription Account for at least 21 days.
(i) Each Person whose subscription is accepted by the Manager shall be admitted to the Fund as a Member within fifteen
(15) days after Subscription Funds have been released from the Escrow Account and shall for all purposes of this Agreement be treated as a Member on the Initial Closing Date. If the Person's subscription is accepted after the Initial
Closing Date, the Person shall be admitted as a Member on or before the last day of the calendar month following the date the subscription was accepted by the Fund.
(j) The amount of the Capital Contribution made by each Member is set forth on Schedule A hereto, as such may be
supplemented or amended from time to time, which shall be no less frequently than quarterly; provided, however, that any failure to amend Schedule A following any Closing Date shall not in any way affect the admission of any Member to the Fund if
such Member was duly and properly admitted to the Fund as a result of such Closing.
(k) No subscriber shall be
admitted to the Fund until such time that at least five (5) business days have lapsed since the subscriber received the Prospectus. In making such a determination, Manager shall be entitled to rely on representations made by subscribers and
Selling Dealers regarding the timing and receipt of the Prospectus.
3.3
Fund Capital.
(a) No Member shall be paid interest on any Capital Contribution (except any interest earned on Subscription
Funds as provided in Section 3.2(h)).
(b) No Member shall have the right to withdraw or receive any
return of such Member's Capital Contribution, except as specifically provided in this Agreement, and no Capital Contribution may be returned to any Member in the form of property other than cash. Except as provided in Article 8 hereof, the Fund
shall not repurchase any Shares.
(c) Except as otherwise specifically provided herein, no Member shall have
priority over any other Member as to: (i) the return of such Member's Capital Contribution or Capital Account; (ii) such Member's share of Profits and Losses; or (iii) such Member's share of distributions of Cash Flow.
(d) Neither the Manager nor any of its Affiliates shall have any personal liability for the repayment of the
Capital Contribution of any Member except to the extent as may be set forth in this Agreement.
3.4
Capital Accounts.
(a) A separate Capital Account shall be established and maintained for each Member. A Member who owns Shares in the Fund
shall have a single Capital Account that reflects all such Shares, regardless of the time or manner in which such Shares were acquired. The initial Capital Account balance of each Member shall be the amount of such Member's Capital
Contribution. No Member shall be required to make any Capital Contribution in addition to the Gross Share Price paid for such Member's Shares pursuant to the Offering.
(b) The initial Capital Account balance of the Manager shall be $2,000.
(c) The Manager shall not be required to make any Capital Contributions except pursuant to and in accordance with
Section 7.3(a)(iii)(B) of this Agreement.
(d) The Capital Account of each Member shall be increased by:
(i) the amount of any additional money contributed by such Member to the Fund (including under the DRP); and (ii) allocations to such Member of Profits (or items thereof), and items of income or gain specially allocated pursuant to
Section 6.2(f) hereof.
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The Capital Account of each Member shall be decreased by: (i) the amount of money distributed to or on behalf of such Member by the Fund; (ii) if a liquidating trust is utilized
pursuant to Section 6.8, the fair market value of any property distributed to such trust for the benefit of such Member by the Fund (net of liabilities secured by such distributed property that such Member is considered to assume or take
subject to under Code Section 752); (iii) allocations to such Member of expenditures described in Code Section 705(a)(2)(B); and (iv) allocations to such Member of Losses (or items thereof), and items of expense, loss or
deduction specially allocated pursuant to Section 6.2(f) hereof.
(e) If a Share is sold or otherwise
transferred, the Capital Account of the transferor with respect to such Share shall carry over to the transferee in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv)(l).
(f) For any taxable year in which the Fund has a Code Section 754 election in effect, the Capital Accounts shall be
maintained in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv)(m).
(g) Upon the occurrence of the
events specified in Treas. Reg. Section 1.704-1(b)(2)(iv)(f), the Members' Capital Accounts shall be adjusted and thereafter maintained to reflect the revaluation of Fund assets on the books of the Fund in accordance with such Treasury
Regulation and Treas. Reg. Sections 1.704-1(b)(2)(iv)(g) and (h); provided, however, that, other than upon liquidation of the Fund within the meaning of Treas. Reg. Section 1.704-1(b)(2)(ii)(g), such an adjustment shall be made only if the
Manager determines in its sole discretion that such an adjustment is necessary to reflect the relative economic interests of the Members in the Fund.
(h) Notwithstanding anything herein to the contrary, the Members' Capital Accounts shall at all times be maintained in the manner required by Treas. Reg. Section 1.704-1(b)(2)(iv), and any
questions or ambiguities arising hereunder shall be resolved by reference to such Treasury Regulations. Further, such Treasury Regulations shall govern the maintenance of the Capital Accounts to the extent this Agreement is silent as to the
treatment of a particular item. In the event Treas. Reg. Section 1.704-1(b)(2)(iv) shall fail to provide guidance as to how adjustments to the Capital Accounts should be made to reflect particular adjustments to the capital on the books of the
Fund, such Capital Account adjustments shall be made in a manner that is consistent with the underlying economic arrangement of the Members and is based, wherever practicable, on federal tax accounting principles.
(i) Distributions shall be applied first to satisfy the Investor Return which has been accrued but not paid and then as a
return of the Member's Capital Contributions. For these purposes, contributions and distributions made on or before the 15th day of the month shall be treated as having been made on the 1st day of such month, and contributions and distributions
made after the 15th day of the month shall be treated as having been made on the 1st day of the following month.
3.5
Loans by Members.
No loan by any Member or any Affiliate of any Member to the Fund (including, without
limitation, any Fund Loan) shall constitute a Capital Contribution to the Fund or increase the Capital Account balance of any Member, but shall be treated, for all purposes, as Indebtedness of the Fund payable or collectible only out of the assets
of the Fund in accordance with the terms and conditions upon which such loan was made.
3.6
No Right to Return of Capital.
No Member shall be entitled to demand any distribution of or with respect to such
Member's Capital Contribution or Capital Account.
ARTICLE 4. MANAGER.
4.1
Powers and Duties.
(a) Subject to the terms and conditions of this Agreement, the Manager, on behalf of the Members, shall have the sole and
exclusive right and authority to manage and control the business and affairs of the Fund, and shall possess all rights and powers of a "manager" of a limited liability company as provided in
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the Act and otherwise by law. Except as otherwise expressly provided for herein, the Members hereby agree to the exercise by the Manager of all such powers and rights conferred on them by the Act
with respect to the management and control of the Fund.
(b) The Manager shall have responsibility as a
fiduciary for the safekeeping and use of all funds and assets of the Fund, whether or not in its immediate possession or control, and shall not employ, or permit any other Person to employ, such funds or assets in any manner other than as permitted
by this Agreement. Except as specifically herein stated or implied, the Manager may not contract away the fiduciary duty owed to such Members by the Manager. The Manager shall devote that amount of its time deemed necessary in its absolute
discretion to carry out its duties to the Fund.
(c) The Manager may employ the services of its Affiliates to
assist the Manager in its managerial duties. Where the services provided by the Manager's Affiliates are services not otherwise contemplated by Section 4.6, the Manager may compensate all such Persons (or be reimbursed if such agreements
are made directly with the Manager) from the assets of the Fund at rates which are fair and reasonable; provided, however, that: (i) the compensation, price or fee payable to any of its Affiliates shall not exceed an amount which is comparable
and competitive with the compensation, price or fee which would be charged by non-Affiliates of the Manager to render comparable services which could reasonably be made available to the Fund upon comparable terms; (ii) all services for which
the Manager's Affiliates are to receive compensation from the Fund shall be embodied in a written contract which (A) accurately describes the services to be rendered and all compensation to be paid therefor and (B) is terminable by
either party without penalty upon 60 days written notice; and (iii) the Manager's Affiliates must be independently engaged in providing such services to Persons other than Affiliates and at least 75% of such Affiliates' gross revenue
from providing such services must be derived from Persons other than the Manager or its Affiliates.
(d) The
Manager shall provide such personnel and services as the Manager may deem necessary or appropriate to conduct the business activities of the Fund and the day-to-day management of its assets.
(e) The conduct of the Fund's business shall be solely controlled by the Manager. The Manager shall have full power
and authority, subject to the provisions of this Agreement or as provided in the Act, to carry out and accomplish the purposes and functions of the Fund, including, by way of illustration but not by way of limitation, the power to:
(i)
do all things necessary or advisable, as determined by the Manager, to effect the admission of Members, including, but not limited to, registering the Shares under the
Securities Act and effecting the qualification of, or obtaining exemptions from the qualification of, the Shares for sale with state securities regulatory authorities, and engaging the Dealer Manager to select Selling Dealers to offer and sell
Shares;
(ii)
acquire, purchase, make future commitments to purchase, invest in, own, acquire or grant options or obligations or rights to purchase, hold, lease, hire, rent, bail,
sub-lease, re-lease, trade, finance, refinance, borrow, manage, maintain, operate, improve, upgrade, modify, exchange, improve, combine, divide, assign, encumber, create security interests in, take economic, beneficial or equitable interest in,
pledge, sell, transfer or otherwise dispose of, and in all respects otherwise deal in or with and transact business with respect to interests in real and personal property of any and all kinds whatsoever, both tangible and intangible, including,
without limitation, Equipment, Leases, contract rights, lease rights, debt instruments and equity interests in corporations, partnerships (both limited and general), limited liability companies, joint ventures and other entities (including, but not
limited to, common and preferred stock, debentures, bonds and other securities of every kind and nature), and, in connection therewith, to execute, deliver, amend, modify and cancel documents and instruments relating to real and personal property of
whatever kind and description, including, but not limited to, mortgages, leases and other documents of title or conveyance, assumption agreements pertaining to such agreements, powers of attorney and other contracts, instruments and agreements of
all kinds, and contract with others, including Affiliates, to do the same on behalf of the Fund;
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(iii)
maintain proper books of account for the Fund and prepare reports, statements and other relevant information for distribution to Members or governmental agencies in
accordance with applicable laws and regulations;
(iv)
expend Fund capital, invest all funds held by the Fund, assure the proper application of revenues of the Fund and determine the appropriate accounting method or methods
to be used by the Fund;
(v)
open accounts, and deposit, withdraw and maintain funds in the name of the Fund in banks or savings and loan associations and designate the terms and conditions of such
deposits and draws thereon;
(vi)
borrow money or otherwise to procure extensions of credit for the Fund, including the sale or assignment of receivables of the Fund, and, if security is required
therefore, execute, seal, acknowledge and deliver agreements, promissory notes, guarantees and other written documents or instruments constituting obligations or evidences of Indebtedness and to pledge, hypothecate, mortgage, assign, transfer or
convey mortgages or security interests in the Equipment and Leases and other assets of the Fund, and prepay, refinance, increase, modify, consolidate or extend such security device, all of the foregoing at such terms and in such amounts as the
manager, in its sole and absolute discretion, deems to be in the best interests of the Fund;
(vii)
purchase or otherwise make Investments in its own name, an Affiliate's name, the name of a nominee or nominees, or a trust or trustees or otherwise temporarily
hold title thereto for the purpose of facilitating an Investment by the Fund; provided, however, that with respect to Affiliated Investments:
(A)
the Manager determines that the Affiliated Investment is in the best interest of the Fund;
(B)
the Affiliated Investment is acquired at a purchase price determined according to a pre-agreed mechanism as may be reasonably agreed to by the Manager;
(viii)
establish Reserves, which shall be in an amount not less than 1% of the Gross Offering Proceeds;
(ix)
loan or advance or cause its Affiliate to loan or advance funds to the Fund (each such loan or advance, a "Fund Loan"), provided that (i) any interest,
financing charges or fees payable by the Fund in connection with the Fund Loan shall not exceed amounts charged by unrelated lending institutions for the same purpose in the same geographic area; and (ii) the term of the Fund Loan does not
extend more than 12 months beyond the end of the Operating Period.
If the Manager or any of its Affiliates
purchase Investments in its own name and with its own funds in order to facilitate ultimate purchase by the Fund, the Manager or an Affiliate, as the case may be, shall be deemed to have made a Fund Loan in an amount equal to the Purchase Price paid
for such Equipment and shall be entitled to receive interest on such amount in accordance with clause (A) above. Any advances made by the Manager or any of its Affiliates for the purpose of paying Organization and Offering Expenses shall not
constitute a Fund Loan, but shall be reimbursed to the Manager or such Affiliate (to the extent possible) from the O&O Expense Allowance, without interest, in accordance with, and to the extent provided in, Section 4.6(e) of this Agreement;
(x)
cause the Fund to invest in (i) purchases of Equipment without having in place a concurrent lease agreement or sale agreement related to such Equipment; and
(ii) options or other obligations to purchase Equipment;
(xi)
adopt, amend and terminate a Distribution Reinvestment Plan on behalf of the Fund;
(xii)
purchase and maintain such insurance policies as the Manager, except as limited elsewhere in this Agreement, deems necessary or appropriate to protect
the interests of the Fund and the
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Manager, for the conservation of Fund assets, or for any purpose convenient or beneficial to the Fund, and the Manager and any Affiliate of the Manager and their respective employees and agents
may be named as additional insured parties thereunder, provided that the Manager pays any incremental costs associated with being added as an additional insured;
(xiii)
employ or contract with Persons in the operation and management of the Fund including, but not limited to, equipment management agents, insurance brokers, repairmen,
packers, transporters, cleaners, appraisers, valuers, architects and equipment lease brokers, engineers, contractors, attorneys, accountants, brokers, appraisers, escrow agents, printers, designers, transfer agents, tax accountants, accounting
advisors and auditors, and such other consultants, advisors, artisans and workmen as may be necessary or advisable, in the sole and absolute discretion of the Manager, for all such purposes described above, provided that no Person is employed to
provide duplicative services; and
(xiv)
assure the doing of all other things necessary, convenient or advisable in connection with the supervision of the affairs, business and assets of the Fund, including
causing the Fund to pay Operating Expenses and Acquisition Expenses; and take all such actions and execute all such documents, agreements and other instruments as the Manager may deem necessary, convenient or advisable to accomplish or further the
purposes of the Fund or to protect and preserve Fund assets.
(f) The Board of Directors of the
Manager must consist of at least one Independent Director, except for a period of 90 days after the death, removal or resignation of an Independent Director.
4.2
Limitations on the Exercise of Powers of Manager.
The Manager shall have no power to take any action prohibited by this Agreement or by the Act. Furthermore, the
Manager shall be subject to the following in the administration of the Fund's business and affairs:
(a)
the Manager shall not operate the Fund in a manner which causes the Fund to be deemed an "investment company" as such term is defined in the Investment Company Act of 1940, as amended;
(b) the Manager shall not enter into contracts that would bind the Fund after the expulsion, adjudication of bankruptcy or
insolvency of a Manager, or continue the business of the Fund with Fund assets after the occurrence of such an event;
(c) the Manager shall not alter the primary purpose of the Fund set forth in Article 2 without the Consent of a Majority Interest;
(d) neither the Manager nor any of its Affiliates shall engage in any transaction with the Fund which would circumvent the
provisions of this Agreement, or circumvent the restrictions herein against dealing with the Manager and its Affiliates, or that would make it impossible to carry on the ordinary business of the Fund;
(e) the Manager shall not confess a judgment against the Fund in connection with any threatened or pending legal action;
(f) the Manager shall not possess any Equipment or assign the rights of the Fund in specific equipment for
other than a Fund purpose;
(g) the Manager shall not commingle the Fund's funds with those of any other
Person; provided, however, the Manager may establish a master fiduciary account pursuant to which separate subtrust accounts are established for the benefit of Programs that are Affiliates of the Fund if the Fund's funds are protected from
claims of such other Programs and/or their creditors. The prohibition of this Section shall not apply to investments meeting the requirements of Section 4.2(l);
(h) the Manager and its Affiliates shall not receive any rebates or give-ups and shall not participate in any reciprocal
business arrangement which would circumvent the provisions of this Agreement, or circumvent the restrictions herein against dealing with the Manager and its Affiliates;
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(i) the Manager shall not directly or indirectly pay or award any
commissions or other compensation to any Person engaged by a potential investor for investment advice as an inducement to such advisor to advise the purchase of the Shares; provided; however, that this provision shall not prohibit the normal sales
commissions payable to, or reimburse the reasonable expenses of, a registered broker-dealer, or other properly licensed Person for selling the Shares;
(j) the Manager shall not cause the Fund to incur any Indebtedness wherein the lender would have or acquire any direct or indirect interest in the profit, capital or property of the Fund other than as a
secured creditor, or incur any Indebtedness specifically for the purpose of funding distributions; provided, however, that the Fund may enter into refinancing transactions with respect to its equipment and distribute net proceeds from any such
refinancing to the extent such refinancing is consistent with the Fund's investment objectives;
(k) the
Fund shall not exchange Shares for property other than cash;
(l) the Fund may not make investments in limited
partnership interests of other Programs; however, the Fund may make investments in other Programs or Joint Ventures with non-Affiliates which own and operate specific equipment and may make investments in Joint Ventures to the extent and in the
manner provided in Sections 4.2(m) and 4.2(v);
(m) the Fund may make investments in Joint Ventures with other
Programs sponsored by the Manager if the following conditions are met:
(i)
the Manager shall have determined that:
(A)
the Investment is in the best interests of the Fund; and
(B)
the Investment shall not result in duplicate fees to the Manager or any of its Affiliates, and such investment shall not result in the impairment, abrogation or
circumvention of any of the terms of this Agreement;
(ii)
all other Programs participating in the Joint Venture have substantially identical investment objectives;
(iii)
the compensation payable to the Manager arising from the investment in the Joint Venture is substantially identical for each Program;
(iv)
the Fund has the right of first refusal to buy the underlying Equipment held by the other Programs sponsored by the Manager the Joint Venture if the other Programs
desire to sell such Equipment;
(v)
the Fund's investment is on substantially the same terms and conditions as the investments made in the Joint Venture by the other Programs;
(vi)
the Joint Venture agreement does not authorize the Fund to take any action with respect to the Investment that the Fund or the Manager could not do under the provisions
of this Agreement;
(vii)
the Joint Venture is entered into either for the purpose of effecting appropriate diversification of the Fund's portfolio or to purchase Equipment or Investments
made in accordance with Section 4.2(r).
(viii)
the Investment objectives of the Joint Venture are consistent with the Investment objectives of the Fund;
(n) the Manager shall not allow the Fund to make loans to the Manager or its Affiliates;
(o) the Manager shall not provide financing to the Fund, other than as described in Section 4.1(e)(ix);
(p) the Fund shall not acquire Equipment or other Investments from a Program in which the Manager has an interest, other
than as described in Section 4.2(r);
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(q) the Fund shall not acquire from the Manager or an Affiliate Equipment or
other Investments, other than as described in Section 4.2(r).
This provision shall not affect the right of the Fund to
invest in Joint Ventures under Section 4.2(m) or (v);
(r) the Fund shall not acquire from the Manager, an
Affiliate or a Program in which the Manager has an interest Equipment or other Investments which have been warehoused and acquired for the purpose of facilitating the acquisition of such Equipment or other Investments for the Fund, unless the
following conditions have been met:
(i)
the Equipment or other Investments were not purchased by the Manager or Affiliate from another Affiliate;
(ii)
the Equipment or other Investments are held by the Manager or Affiliate on a temporary or interim basis only;
(iii)
the Manager has determined that the purchase of the Equipment or the other Investment is in the best interest of the Fund;
(iv)
the Equipment or Investment is purchased by the Fund for a price not greater than the cost of the Equipment or Investment to the Manager or Affiliate;
(v)
there is no difference in interest terms with loans secured by the Equipment or Investment at the time acquired by the Manager or Affiliate than at the time acquired by
the Fund; and
(vi)
no other benefit arises out of the transaction to the Manager apart from compensation otherwise permitted under this Agreement; and
(vii)
in the case of an acquisition from a Program in which the Manager has an interest, the acquisition is for the purpose of a Joint Venture with that Program which meets
the requirements set forth under Section 4.2(m).
This provision shall not affect the right of the Fund to
invest in Joint Ventures under Section 4.2(m);
(s) the Fund may not purchase or lease Equipment from or
sell or lease Equipment to the Manager, except as described in Section 4.2(r) and except that the Fund may lease Equipment to the Manager under a lease arrangement made at the outset and on terms no more favorable to the Manager than those
offered to other Persons;
(t) the Fund may not grant an exclusive right to the Manager or an Affiliate to sell
Equipment on its behalf;
(u) the Fund shall not pay, directly or indirectly, a commission or fee (except as
permitted under this Agreement) to the Manager in connection with the reinvestment or distribution of Cash Flow; and
(v) the Fund may make investments in Joint Ventures with Affiliates if the following conditions are met:
(i)
the Manager has determined that the investment is in the Fund's best interests and will not result in duplicate fees to the Manager or its Affiliates or impair,
abrogate or circumvent any provisions of the this Agreement;
(ii)
the Joint Venture agreement does not authorize the Fund to do anything with respect to the Equipment that the Fund or the Manager could not do under the provisions of
this Agreement;
(iii)
a majority of the Manager's directors, including a majority of the Manager's Independent Directors, have approved the Joint Venture; and
(vi)
the investment objectives of the Joint Venture are consistent with the Fund's investment objectives.
4.3
Reliance on Reports and Information by Manager.
In performing its duties, the Manager and its
Affiliates shall be fully protected in relying in good faith upon the provisions of this Agreement and on information, opinions, reports or statements of any Member, an officer, employee or agent of the Fund, or by any other Persons as to matters
the Manager reasonably believes are within such other Persons' professional or expert
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competence, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits or losses of the Fund or the value and amount of the assets or
reserves or contracts, agreements or other undertakings that would be sufficient to pay claims and obligations of the Fund or to make reasonable provision to pay such claims and obligations, or other facts pertinent to the existence and amount of
assets from which distributions to Members or creditors might properly be paid.
4.4
Limitation of Liability.
(a) Neither the Manager nor any of its Affiliates shall be personally liable
under any judgment of a court, or in any other manner, for any debt, obligation or liability of the Fund, whether that liability or obligation arises in contract, tort or otherwise, solely by reason of being the Manager.
(b) Neither the Manager nor any Affiliate of the Manager performing services on behalf of the Fund and acting with the
scope of the Manager's authority shall have any liability to the Fund or to any Member for any loss suffered by the Fund or the Member that arises out of any action or inaction of the Manager or its Affiliates if:
(i)
the Manager and its Affiliates determined in good faith that the course of conduct or choice to take no action was in the best interest of the Fund;
(ii)
the Manager and its Affiliates were acting within the scope of authority on behalf of, or performing services for, the Fund; and
(iii)
the course of conduct or inaction did not constitute negligence or misconduct of the Manager or its Affiliates.
4.5
Right to Indemnification.
(a) The Fund shall indemnify the Manager and its Affiliates performing services on behalf of the Fund and acting within
the scope of the Manager's authority against all loses, judgments, expenses, and amounts paid in settlement of any claims sustained by them in connection with the Fund, provided that:
(i)
the Manager and its Affiliates determined in good faith that the course of conduct or choice to take no action was in the best interest of the Fund;
(ii)
the Manager and its Affiliates were acting within the scope of authority on behalf of, or performing services for, the Fund; and
(iii)
the course of conduct or inaction did not constitute negligence or misconduct of the Manager or its Affiliates.
(b) Notwithstanding the foregoing, the Manager and its Affiliates shall not be indemnified by the Fund for any losses,
liabilities or expenses arising from or out of an alleged violation of federal or state securities laws unless:
(i)
there has been a successful adjudication on the merits of each count involving securities law violations as to the particular indemnitee and a court of competent
jurisdiction has approved the indemnification of litigation costs;
(ii)
the claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee and a court of competent jurisdiction
has approved indemnification of the litigation costs; or
(iii)
(i) a court approves the settlement and finds that indemnification of the settlement and related costs should be made or (ii) a court approves indemnification of
litigation costs if a successful defense is made; and
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(c) The Manager or its Affiliate seeking indemnification may not be entitled
to indemnification for alleged violations of federal or state securities laws unless such indemnitee has advised the court regarding the current position of the Securities and Exchange Commission and any applicable state securities'
administrator on the issue of indemnification for securities laws violations.
(d) Any amounts payable pursuant
to this Section 4.5 shall be recoverable solely out of the assets of the Fund and not from the Members. The Fund may not incur the cost of that portion of liability insurance which insures the Manager or its Affiliates for any liability as to
which the Manager or its Affiliates is prohibited from being indemnified under this Section 4.5. Nothing in this Section 4.5(d) shall prohibit the Manager from adding itself or its Affiliates as additional insureds to any policies covering
losses due to property or personal injury to non-Affiliates incurred during the normal operations of the Fund; provided, however, that Manager shall pay any incremental costs associated with being added as an additional insured.
4.6
Compensation of the Manager and its Affiliates.
The Manager and its Affiliates shall not, in their respective capacities as such, receive any salary, fees, profits, distributions,
commissions or other compensation (including in connection with the reinvestment or distribution of Cash Flow or from the proceeds from the sale, exchange or refinance of Investments), except in accordance with Section 6.1(b), Section
4.1(e)(xiv) or this Section 4.6; or pay or award any commissions or other compensation to any Person engaged by a potential Member as an investment advisor as an inducement to the Person to advise the potential Member about the Fund; provided,
however, that the payment of Dealer Manager Fees and Selling Commissions otherwise in accordance with this Section 4.6 and the payment for attendance of conferences or trade shows are not prohibited hereby. Furthermore, the sum of all
Organization and Offering Expenses paid by the Fund shall not exceed fifteen percent (15%) of the Gross Offering Proceeds.
(a) The Manager shall be entitled to receive the allocations and distributions provided for under Article 6 and Section 7.3, in addition to any allocations and distributions with respect to the
Shares it holds.
(b) The Fund shall pay the Dealer Manager Fees to the Dealer Manager; provided, however, that
such Dealer Manager Fees shall not be payable with respect to any Shares sold pursuant to the DRP.
(c)
Commissions in the amount of $0.70 per Share sold ("Selling Commissions") shall be paid by the Fund to the Dealer Manager and each Selling Dealer with respect to the Shares sold by each of them; provided, however, that no Selling
Commissions shall be payable by the Fund with respect to Shares sold (i) to investors whose broker-dealer waives the Selling Commission; (ii) to broker-dealers participating in the Offering or any of their associated persons purchasing
shares for their own account or for their respective IRAs or Qualified Plans; or (iii) pursuant to the DRP. Further, Selling Commissions payable by the Fund shall be reduced by an amount as set out in the Prospectus with respect to Shares sold
according to established volume discounts. Selling Commissions must be paid in cash, if at all. Notwithstanding the foregoing, the Manager may agree with the Dealer Manager or any Selling Dealer to reduce the amount of Selling Commissions in certain
instances as the Manager may determine, so long as the Selling Commissions paid in such instances do not exceed the amount set forth herein.
(d) Due Diligence Expenses may, in the Manager's sole discretion, be reimbursed by the Fund to the Dealer Manager and each Selling Dealer, up to a maximum of 0.5% of Gross Offering Proceeds.
(e) The Fund shall pay to the Manager or its Affiliates immediately following each Closing Date the O&O
Expense Allowance. The O&O Expense Allowance will not exceed the actual Organization and Offering Expenses incurred by our Manager or any of its Affiliates. The Manager shall bear any Organization and Offering Expenses incurred by the Manager or
any of its Affiliates (including, without limitation, the Dealer Manager) in excess of the O&O Expense Allowance.
(f) At such time as the Fund has entered into a binding contract to make an Investment and substantially all of the material conditions to the closing of such Investment have been satisfied, the Fund
shall pay the Manager or its Affiliates, for services rendered in connection with acquiring the Investment, an Acquisition Fee equal to the difference (to the extent greater than zero) between (i) 3.0% of the Purchase
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Price paid by the Fund for any Investment, and (ii) the aggregate amount of Acquisition Fees paid by or on behalf of the Fund to any other Person in connection with such Investment; if the
Fund purchases an Investment from the Manager or one of its Affiliates pursuant to Section 4.1(e)(vii) for a Purchase Price which includes an Acquisition Fee amount, such Acquisition Fee amount shall be deemed paid pursuant to this
Section 4.6(f), and there shall be no duplicative payment thereof.
(g) The Fund shall not pay any
Front–End Fees, or any part thereof, that would cause the Fund's Investment in Equipment (including Equipment that at any time is subject to, or is the collateral for, Leases or Indebtedness) to be less than the greater of:
(i)
80% of the Gross Offering Proceeds, reduced by .0625% for each 1% of Indebtedness encumbering the Fund's Investments; or
(ii)
75% of the Gross Offering Proceeds.
To calculate the percentage of Indebtedness encumbering the Fund's Investments, the aggregate amount of the Indebtedness shall be divided by the aggregate Purchase Price (without deduction for
Front–End Fees) paid for all Investments. The quotient so calculated shall be multiplied by .0625% to determine the percentage to be deducted from 80%.
(h) Each month, the Fund shall pay to the Manager or its Affiliates Asset Management Fees attributable to the Gross Rental Payments of the Fund during such month. The Asset Management Fee shall continue
to be payable to the Manager or its Affiliates during the extension of the term of a Lease or when a new Lease is entered into with the same lessee or its Affiliates or a different lessee.
(i) Until the end of the Operating Period, the Fund shall pay the Manager or its Affiliates Re-Leasing Fees for providing
substantial re-leasing services (including, but not limited to, ongoing marketing or hiring or arranging for the hiring of crews or operating personnel) in connection with the re-lease of the Fund's Equipment. In addition, the Re-Leasing Fee
shall only be payable to the Manager or its Affiliates if the Equipment is not re-leased to the same lessee or its affiliates and the Manager performs Equipment management services which would entitle it to the Asset Management Fee. In connection
therewith, the Manager or its Affiliates shall maintain adequate staff for rendering re-leasing services to the Fund. Re-leasing fees will be paid to the Manager as each rental payment is received over the term of the lease.
(j) For providing services in connection with the sale of any Investment, the Fund shall pay to the Manager or its
Affiliates the applicable Re-Marketing Fee; provided that:
(i)
in no event shall any Re-Marketing Fees payable to the Manager be paid prior to Investor Return. For the avoidance of doubt, where the Manager participates with an
independent broker on the sale of any Investment, the aforementioned subordination will only apply to that part of the Re-Marketing Fee payable to the Manager;
(ii)
the Manager or its Affiliates shall not be entitled to receive any Re-Marketing Fees to the extent that such amount would cause the total compensation paid to the
manager in connection with the sale of such Investments to exceed one-half the fee for services which is reasonable, customary and competitive in light of the size, type and location of such Investment;
(iii)
in no event shall aggregate Re-Marketing Fees paid to all Persons in connection with the sale of such Investments exceed the fee for services which is reasonable,
customary and competitive in light of the size, type and location of such Investment; and
(iv)
Re-Marketing Fees that cannot be paid to the Manager or its Affiliates when earned because Investor Return has not been achieved shall accrue, without interest, and be
paid to the Manager after Investor Return.
(k) General Fund Expenses.
(i)
Except as otherwise provided in this Section 4.6(k), expenses of the Fund other than those incurred and otherwise reimbursed in accordance with Sections 4.6(b)
through (j), shall, to the extent practicable, be billed directly to and paid by the Fund.
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(ii)
The Fund shall reimburse the Manager and any of its Affiliates for the actual cost of goods and materials used for or by the Fund and obtained from non-Affiliates of
the Manager. The Manager may be reimbursed for the administrative services necessary to the prudent operation of the Fund; provided, that the reimbursement shall be at the lower of the Manager's actual cost or the amount that the Fund would be
required to pay to independent third parties for comparable administrative services in the same geographic location. No reimbursement is permitted for services for which the Manager or any Affiliate is entitled to compensation by way of a separate
fee pursuant to other provisions of this Section 4.6. The Manager and its Affiliates shall not be reimbursed by the Fund for amounts expended by it with respect to the following:
(A)
Rent or depreciation, utilities, capital equipment, and other administrative items; and
(B)
Salaries, fringe benefits, travel expenses and other administrative items incurred by or allocated to any Controlling Person of the Manager or of any of its Affiliates
(iii)
The Fund shall reimburse the Manager for other services provided to the Fund by an Affiliate in accordance with the provisions of Section 4.1(c).
4.7
Other Interests of the Manager and its Affiliates.
Except as set forth in the Prospectus, and subject to their fiduciary duties to the Fund, the Manager and its Affiliates shall not be
obligated to present any particular investment opportunity to the Fund, regardless of whether such opportunity is of such character that the Fund could take advantage thereof, and the manager and its Affiliates shall have the right to take for their
own accounts or to recommend such investment opportunity to others. The Manager and its Affiliates, the Members, any shareholders, officer, director, member or employee thereof, or any Person owning a legal or beneficial interest therein, may engage
in or possess an interest in any other business or venture of every nature and description, independently or with others including, but not limited to, the ownership, financing, leasing, trading, hiring, licensing, bailing, renting, operation,
management and brokerage of equipment.
ARTICLE 5. POWERS AND LIABILITIES OF MEMBERS.
5.1
No Control Over Fund Business.
No Member shall participate in or have any control over the Fund's business or have any right or authority to act for, or to bind or
otherwise obligate, the Fund, except for a Member who is also the Manager, and then only in its capacity as the Manager. No Member shall have the right to have the Fund dissolved and liquidated or to have all or any part of such Member's
Capital Contribution or Capital Account returned except as provided in this Agreement. The Members hereby consent to the exercise by the Manager of the powers granted to the Manager pursuant to this Agreement.
5.2
Limited Liability.
Except as otherwise provided in the Act or pursuant to this Agreement, after the payment of all Subscription Funds for the Shares purchased by a Member, such Member shall have no further obligations to
the Fund, shall not be subject to any additional assessment and shall not be required to contribute any additional capital to, or to loan any funds to, the Fund. The liability of each Member in its capacity as such shall be limited to the amount of
such Member's Capital Contribution and its pro rata share of any undistributed Profits. Except as otherwise required by the Act or as expressly set forth in this Agreement, no Member shall have any personal liability whatsoever in such
Member's capacity as a Member, whether to the Fund, to any of the other Members, to the creditors of the Fund or to any other third party, for the debts, liabilities, commitments or other obligations of the Fund or for any losses of the Fund.
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ARTICLE 6. DISTRIBUTIONS AND ALLOCATIONS.
6.1
Distributions of Cash.
(a) The Manager shall have the sole discretion to determine what portion, if any, of cash on hand shall be invested and
reinvested in additional Investments and what portion shall be distributed to the Members; provided, however, with respect to the reinvestment of Cash Flow derived from the Sale of the Fund's Investments, the Manager shall retain sufficient
cash to be distributed to Members to pay state and federal income tax obligations, if any, and not otherwise withheld and paid by the Manager pursuant to Section 6.9 of this Agreement, created by the Sale of the Fund's Investments. Until
the end of the Operating Period, the Manager intends to cause the Fund to make, to the extent available, monthly Cash Distributions; provided, however, that the amount of each Cash Distribution shall be computed on a non-cumulative basis (that is,
without increase for any portion of the monthly cash distribution amount computed above which the Fund is unable to make, and without reduction for any cash distributions actually made, in any prior period).
(b) Prior to Investor Return, the Fund shall pay the Manager an amount equal to 1.0% of distributions made to the Members
pursuant to this Section 6.1. After Investor Return, the Fund shall pay the Manager an amount equal to 19.0% of distributions pursuant to this Section 6.1. Notwithstanding the foregoing, (i) no Member shall be entitled to receive any
distributions in an amount that exceeds the positive adjusted Capital Account balance of that Member immediately preceding the distribution (taking into account the effect of any revaluation of the assets of the Fund pursuant to Section 3.4)
and (ii) any amount not distributed to a Member pursuant to clause (i) shall be distributed to the other Members that have positive adjusted Capital Account balances, after taking into account their share of the distribution, in accordance
with their respective positive adjusted Capital Account balances.
(c) Notwithstanding the provisions of
Section 6.1(b), distributions of cash following a Dissolution Event shall be made in accordance with the provisions of Section 9.3.
6.2
Allocations of Profits and Losses.
(a) The Profits and Losses of the Fund shall be determined for each Fiscal Year or Fiscal Period.
(b) Except as otherwise provided in this Agreement, whenever a proportionate part of the Fund's Profits or Losses is allocated to a Member, every item of income, gain, loss or deduction entering into
the computation of such Profits or Losses, or arising from the transactions with respect to which such Profits or Losses were realized, shall be allocated to such Member in the same proportion.
(c) Profits for any Fiscal Period during the Operating Period shall be allocated as follows:
(i)
First, to the extent that an amount of Loss has been allocated under Section 6.2(e) for a prior Fiscal Period and that allocation has not been offset by a
subsequent allocation of Profits pursuant to this Section 6.2(c)(i) or Section 6.2(d)(i), to the Members in proportion to, and in an amount equal to, the unrecovered amount of Loss (and, if there is an unrecovered Loss for more than one
Fiscal Period or that has been allocated pursuant to Section 6.2(e)(i) or Section 6.2(e)(ii), then this Section 6.2(c)(i) shall be applied first to the Loss arising in the most recent Fiscal Period until that Loss is recovered fully,
and thereafter successively to each preceding Fiscal Period for which there is an unrecovered Loss, ending with the first such Fiscal Period, in each case offsetting Loss allocated pursuant to Section 6.2(e)(ii) before those allocated pursuant
to Section 6.2(e)(i);
(ii)
second, 1% to the Manager and 99% to the Members in proportion to their Shares, until the Members are allocated the Investor Return to the extent not previously
allocated pursuant to this Section 6.2(c)(ii) or Section 6.2(d)(ii); and
(iii)
thereafter, 19% to the Manager and 81% to the Members.
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(d) Profits for any Fiscal Period during the Liquidation Period shall be
allocated as follows:
(i)
First, to the extent that an amount of Loss has been allocated under Section 6.2(e) for a prior Fiscal Period and that allocation has not been offset by a
subsequent allocation of Profits pursuant to Section 6.2(c)(i) or this Section 6.2(d)(i), to the Members in proportion to, and in an amount equal to, the unrecovered amount of Loss (and, if there is an unrecovered Loss for more than one
Fiscal Period or that has been allocated pursuant to Section 6.2(e)(i) or Section 6.2(e)(ii), then this Section 6.2(d)(i) shall be applied first to the Loss arising in the most recent Fiscal Period until that Loss is recovered fully,
and thereafter successively to each preceding Fiscal Period for which there is an unrecovered Loss, ending with the first such Fiscal Period, in each case offsetting Loss allocated pursuant to Section 6.2(e)(ii) before those allocated pursuant
to Section 6.2(e)(i);
(ii)
Second, the greater of (A) 1% or (B) the excess of the distributions made to the Manager (other than with respect to any Shares it owns) pursuant to the first
sentence of Section 6.1(b) (but only to the extent that such distributions have not been treated under the Treasury Regulations as attributable to the distribution of the proceeds of Nonrecourse Liabilities) over the cumulative amount of income
previously allocated to the Manager pursuant to Section 6.2(c)(i), Section 6.2(f)(v) and this Section 6.2(d)(i) (and not offset by Losses allocated pursuant to Section 6.2(e)(ii)) to the Manager and the balance to the Members
(including the Manager with respect to any Shares it owns) until such Members have been allocated in the aggregate an amount equal to the Investor Return to the extent not previously allocated pursuant to this Section 6.2(d)(ii) or
Section 6.2(c)(ii); and
(iii)
thereafter, 19% to the Manager and 81% to the Members (including the Manager with respect to any Shares it owns).
(e) Losses for any Fiscal Period shall be allocated as follows:
(i)
first, 19% to the Manager and 81% to the Members until the cumulative amount of Losses allocated pursuant to this Section 6.2(e)(i) to those who are then Members
equals the cumulative Profits previously allocated to such Members (or their predecessors-in-interest) pursuant to Sections 6.2(c)(iii) and 6.2(d)(iii); and
(ii)
thereafter, 1% to the Manager and 99% to the Members; provided, however, that if and to the extent that an allocation of Losses to any Member pursuant to this
Section 6.2(e) or Section 6.2(f) would result in any such Member having an Adjusted Capital Account Deficit, such Losses shall be allocated to all other Members in accordance with this Section 6.2(e) and, when no Member can be
allocated any such Losses without violating the limitation contained in this proviso, such remaining Losses shall be allocated to the Manager.
(f) The following special allocations shall, except as otherwise provided, be made prior to allocations in Section 6.2(c)-(e) in the following order:
(i)
Fund Minimum Gain Chargeback. Any Fund Nonrecourse Deduction for a Fiscal Period shall be allocated to the Members in accordance with their respective Capital Accounts
at the beginning of such period. If there is a net decrease in the Fund Minimum Gain during a Fiscal Period, then items of income and gain for such Fiscal Period (and, if necessary, for subsequent periods) shall be allocated to the Members in the
manner and to the extent required by Treasury Regulations Section 1.704-2(f). This clause is intended to constitute a "minimum gain chargeback" as provided by Treasury Regulations Section 1.704-2(f), and this clause shall be
construed accordingly.
(ii)
Member Minimum Gain Chargeback. Any Member Nonrecourse Deduction shall be allocated in the manner specified in Treasury Regulations
Section 1.704-2(i)(1), and, subject to the exceptions set forth in Treasury Regulations Section 1.704-2(i)(4), if there is a net decrease in Member Nonrecourse Debt Minimum Gain during a Fiscal Period attributable to a Member
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Nonrecourse Debt, then each Member with a share of Member Nonrecourse Debt Minimum Gain attributable to such Member's Nonrecourse Debt, determined in accordance with Treasury Regulations
Section 1.704(2)(i)(5), shall be specially allocated items of income and gain for such Fiscal Period (and, if necessary, for subsequent periods) in an amount equal to such Member's share of the net decrease in Member Nonrecourse Debt
Minimum Gain for such period attributable to such Member Nonrecourse Debt (which share of such net decrease shall be determined under Treasury Regulations Section 1.704-2(i)(4) and 1.704-2(g)(2)). This clause is intended to constitute a
"chargeback of partner nonrecourse debt minimum gain" as provided by Treasury Regulations Section 1.704-2(i)(4), and this clause shall be construed accordingly.
(iii)
Qualified Income Offset. In the event that a Member unexpectedly receives any adjustment, allocation or distribution described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Fund income and gain (consisting of a pro rata portion of each item of Fund income, including gross income, and gain) shall be specially allocated to such Member in the manner required
by Treasury Regulations Section 1.704-1(b)(2)(ii)(d) to eliminate, to the extent required by such regulation, the Adjusted Capital Account Deficit of such Member as quickly as possible. This clause is intended to constitute a "qualified
income offset" as provided by Treasury Regulations Section 1.704-1(b)(2)(ii)(d), and this clause shall be construed accordingly.
(iv)
Special Liquidation Period Allocation. During the Liquidation Period, there shall be a special allocation of gross income to the Members (including the Manager
regardless of its Shares) in proportion to, and to the extent of, the deficit balances, if any, in their respective Capital Accounts in excess of the amounts that such Members are obligated to restore and are deemed obligated to restore pursuant to
the penultimate sentences of Treas. Reg. Sections 1.704-2(g)(i) and 1.704-2(i)(5), provided that an allocation pursuant to this Section 6.2(f)(iv) shall be made only if and to the extent that such Member would have a deficit Capital Account in
excess of such sum after all other allocations pursuant to this Article 6 have been made as if this Section 6.2(f)(iv) and Section 6.2(f)(iii) were not part of this Agreement.
(v)
Compliance Allocations. The special allocations provided for in the proviso of Section 6.2(e)(ii) and in Sections 6.2(f)(i)-(iv) are intended to comply with
certain requirements of Treas. Reg. Sections 1.704-1 and 1.704-2. To the extent that any of such special allocations shall have been made, subsequent allocations of income, gains, losses and deductions and items thereof (curative allocations) shall
be made as soon as possible and in a manner so as to cause, to the extent possible without violating the requirements of Treas. Reg. Sections 1.704-1 and 1.704-2, the Members' Capital Account balances to be as nearly as possible in the same
proportions in which they would have been had such special allocations not occurred. In making such curative allocations, due regard shall be given to the character of the Profits and Losses and items thereof that were originally allocated pursuant
to the provision of Sections 6.2(e) and Sections 6.2(f)(i)-(iv) in order to put the Members as nearly as possible in the positions in which they would have been had such special allocations not occurred.
If the Manager determines, after consultation with counsel, that the allocation of any item of Fund income, gain, loss or deduction is not specified in this Article 6
(an "unallocated item"), or that the allocation of any item of Fund income, gain, loss or deduction hereunder is clearly inconsistent with the Members' economic interests in the Fund determined by reference to this Agreement, the
general principles of Treas. Reg. Section 1.704-1(b) and the factors set forth in Treas. Reg. Section 1.704-1(b)(3)(ii)(a) "misallocated item"), then the Manager may allocate such unallocated items and reallocate such
misallocated items, to reflect such economic interests.
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(vi)
Special Allocation of State, Local and Foreign Taxes. Any state, local or foreign taxes imposed on the Fund by reason of a Member being a citizen, resident or national
of such state, locality or foreign jurisdiction, including any item(s) of taxable income or tax loss resulting therefrom, shall be specially allocated to such Member.
(vii)
Transactions with the Fund. If, and to the extent that, any Member is deemed to recognize any item of income, gain, loss, deduction or credit as a result of any
transaction between such Member and the Fund pursuant to Code Sections 482, 483, 1272-1274, 7872 or any similar provision now or hereafter in effect, any corresponding Profits or Losses or items thereof shall be allocated to the Member who was
charged with such item.
(viii)
Fees and Commissions Paid to the Manager. It is the intent of the Fund that, any amount paid or deemed paid to the Manager as a fee or payment described in
Section 4.6 shall be treated as a "guaranteed payment" or a payment to a Member not acting in his capacity as a Member pursuant to Code Section 707(c) or (a), respectively, to the extent possible. If any such fee or payment is
deemed to be a distribution to the Manager and not a guaranteed payment or a payment to a Member not acting in his capacity as a Member, the Manager shall be allocated an amount of Fund ordinary gross income equal to such payment.
(ix)
Syndication Expenses. Syndication Expenses attributable to the Selling Commissions and Dealer Manager Fees paid on the Fund's sale of any Share shall be specially
allocated to the Member who purchased such Share; and all other Syndication Expenses shall be allocated to the Members who are admitted to the Fund from time to time so that, to the extent possible, the cumulative Syndication Expenses (other than
Selling Commissions and Dealer Manager Fees) allocated with respect to each Share are the same. If the Manager determines that such result is not likely to be achieved through future allocation of Syndication Expenses, the Manager may allocate a
portion of Profits or Losses or other items of income, gain, loss, deduction or expense to achieve the same effect on the Capital Accounts of the Members.
6.3
Tax Allocations; Code Section 704(c); Revaluations.
(a) Except as otherwise provided in this Section 6.3, the taxable income or loss of the Fund (and items thereof) for any Fiscal Period shall be allocated among the Members in proportion to and in the
same manner as Profit, Loss and separate items of income, gain, loss and deduction (excluding items for which there are no related tax items) are allocated among the Members for Capital Account purposes pursuant to the provisions of
Section 6.2. Except as otherwise provided in this Section 6.3, the allocable share of a Member for tax purposes in each specified item of income, gain, deduction and loss of the Fund comprising Profit, Loss, or an item allocated pursuant
to Section 6.2 shall be the same as such Member's allocable share of Profit, Loss, or the corresponding item for such Fiscal Period.
(b) In accordance with Code Section 704(c) and the Treasury Regulations thereunder, income, gain, loss and deduction, and items thereof, with respect to any property contributed to the capital of the
Fund shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Fund for federal income tax purposes and its initial Gross Asset Value.
(c) In the event the Gross Asset Value of any Fund asset is adjusted pursuant to clause (b) of the definition of
Gross Asset Value herein and Section 3.4(g) hereof, subsequent allocations of income, gain, loss and deduction, and items thereof, with respect to such asset shall take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in a manner consistent with the requirements of Treas. Reg. Section 1.704-3(a)(6).
(d) Any elections or other decisions relating to the allocations required by clauses (b) and (c) of this Section 6.3 shall be made in a manner that reasonably reflects the purpose and
intention of this Agreement. Allocations pursuant to this clause (d) of this Section 6.3 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Profits, Losses, other items or distributions pursuant to any provision of this Agreement.
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6.4
Distributions and Allocations Among the Members.
(a) Except to the extent otherwise provided herein, all distributions of cash and all allocations of Profits
and Losses and items thereof for any Fiscal Year or Fiscal Period to the Members (including the Manager with respect to any Shares it owns) shall be distributed or allocated, as the case may be, among the Members in proportion to their respective
numbers of Shares. Each distribution of cash shall be made to the Members or their respective assignees of record as of the day on which such distribution is made. If the Manager determines at any time that the amount of distributions made to any
such Member during or with respect to a Fiscal Year does not (or will not) properly reflect such Member's share of the total distributions made or to be made by the Fund for such Fiscal Year, the Manager shall, as soon as practicable, make a
supplemental distribution to such Member, or withhold from a subsequent distribution that otherwise would be payable to such Member, such amount as shall cause the total distributions to such Member for such Fiscal Year to be the proper amount.
(b) Notwithstanding the general rule set forth in Section 6.4(a) regarding the allocation of Profits and
Losses among Members, beginning with the first Fiscal Year that starts on or after the first day of the Liquidation Period, Profits and Losses allocated to the Members (as distinct from Profits and Losses allocated to the Manager as manager)
pursuant to Sections 6.2(c), 6.2(d), or 6.2(e) shall first be allocated among the Members so as to equalize, as soon as practicable, the ratio for each Member of such Member's Capital Account (as adjusted to take into account amounts the Member
is obligated, or deemed obligated, to restore pursuant to Treas. Reg. Section 1.704-2(g)(i) and 1.704-2(i)(5)) to the number of Shares held by such Member, and thereafter in proportion to their respective number of Shares. If there are not
sufficient Profits or Losses so allocated to the Members for such Fiscal Year to bring such ratios into equality, such Profits and Losses shall be allocated among the Members in the same proportions as would have been the case had the minimum amount
of Profits or Losses, as the case may be, necessary to produce such equality been available for allocation. For purposes of applying this provision to the Manager with respect to any Shares it owns, similar principles to those set forth above shall
be applied.
(c) In connection with any Fiscal Year in which any Members (other than the Manager) are admitted
to the Fund or, with respect to clause (ii), have Shares redeemed by the Fund, Profits and Losses or items thereof shall be allocated, and distributions made, among such Members as follows:
(i)
Operations and Sales shall be deemed to have occurred ratably over such Fiscal Year, irrespective of the actual results of Operations or Sales;
(ii)
for purposes of determining the Profits, Losses or any other items allocable to any period (including for periods of less than a Fiscal Year to the extent necessary in
order to comply with Code Section 706(d)), Profits, Losses and any such other items shall be determined on a daily, monthly or other basis, as determined by the Manager using any permissible method under Code Section 706 and the Treasury
Regulations thereunder. If the amount of Profit or Loss allocable to a Member is limited as a result of the use of such method compared to the amount of such Profit or Loss that otherwise would have been allocated to such Member pursuant to Sections
6.2(c), 6.2(d) or 6.2(e) (as amplified by Sections 6.4(a) or 6.4(b), as the case may be), such excess amount shall be reallocated to the other Members in proportion to the amounts allocated to them pursuant to said Sections; and
(iii)
all distributions made to such Members pursuant to Section 6.1(b) shall be distributed among the Members in the ratio that the number of Shares held by each Member
multiplied by the number of days that such Shares were held by such Member preceding the date on which the distribution is made bears to the sum of that calculation for all Members.
(d) In the event of a transfer of a Share during a Fiscal Year in accordance with Article 8, the transferor and transferee
shall be allocated a ratable share of Profits and Losses for such Fiscal Year based on the number of days in such Fiscal Year that each held such transferred Shares. Monthly distributions made by the Fund in accordance with Section 6.1(b) shall
be allocated between the transferor and transferee (and subsequently adjusted, if necessary) in the manner set forth in Section 6.4(a).
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6.5
Compliance with NASAA Guidelines Regarding Front-End
Fees.
Notwithstanding anything in this Agreement to the contrary, in the event the Fund fails, at any time after the
expiration of 30 months from the date of the Prospectus, to comply with the restrictions set forth in Section 4.6(b) through (j) above, the Manager shall appropriately adjust the allocations and distributions set forth in this Article 6 so
as to comply with the requirements contained in the NASAA Guidelines. No adjustment proposed to be made pursuant to this Section 6.5 shall require the Manager to obtain the Consent of the Members unless such proposed adjustment adversely
affects the allocations or distributions made, or to be made, to any Member.
6.6
Return of
Uninvested Capital Contribution.
If any amount of the Net Offering Proceeds has not been committed to Investments or
committed to Reserves by twenty-four (24) months after the Effective Date of the Offering, the amount of such uninvested Net Offering Proceeds shall be promptly distributed by the Fund to the Members, pro rata based upon their respective number
of Shares, as a return of capital, without interest and without reduction for Front-End Fees in respect of such uninvested Capital Contributions (which distributions shall not in any event exceed the related Capital Contribution of any Member).
Funds shall be deemed to have been committed to Investments and need not be returned to a Member to the extent written agreements in principle, commitment letters, letters of intent or understanding, option agreements or any similar contracts or
understandings are executed and not terminated during the applicable periods described above, and if such Investments are ultimately consummated within a further period of twelve (12) months. Funds deemed committed which are not actually so
invested within such twelve (12) month period will be promptly distributed, without interest and without reduction for Front-End Fees in respect of such uninvested Net Offering Proceeds, to the Members on a pro rata basis, as a return of
capital.
6.7
Members' Return of Investment in the Fund.
Each Member shall look solely to the assets of the Fund for the return of his or her Capital Contribution and for any other distributions
with respect to his or her Shares. If the assets of the Fund remaining after payment or discharge, or provision for payment or discharge, of its debts and liabilities are insufficient to return such Capital Contribution or to make any other
distribution to such Member, he or she shall not have any recourse against the personal assets of the Manager, any of its Affiliates or any other Member, except to the limited extent set forth in this Agreement.
6.8
No Distributions in Kind.
Distributions in kind shall not be permitted except upon dissolution and liquidation of the Fund's assets and may only then be made
to a liquidating trust which has been established for the purpose of liquidation of the Fund's assets and distribution of the net cash proceeds of such liquidation in cash to the Members in accordance with the provisions of this Agreement.
6.9
Fund Entitled to Withhold.
The Fund shall, at all times, be entitled to withhold or make payments to any governmental authority with respect to any federal, state,
local or foreign tax liability of any Member arising as a result of such Member's participation in the Fund. Each such amount so withheld or paid shall be deemed to be a distribution for purposes of Articles 6 and 9, as the case may be, to the
extent such Member is then entitled to a distribution. To the extent that the amount of such withholdings or payments made with respect to any Member exceeds the amount to which such Member is then entitled as a distribution, the excess shall be
treated as a demand loan, bearing interest at a rate equal to twelve percent (12%) per annum simple interest from the date of such payment or withholding until such excess is repaid to the Fund (i) by deduction from any distributions
subsequently payable to such Member pursuant to this Agreement or (ii) earlier payment of such excess and interest by such Member to the Fund. Such excess and interest shall, in any case, be payable not less than 30 days after demand therefor
by
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the Manager, which demand shall be made only if the Manager determines that such Member is not likely to be entitled to distributions within twelve (12) months from the date of such
withholding or payment by the Fund in an amount sufficient to pay such excess and interest. The withholdings and payments referred to in this Section 6.9 shall be made at the maximum applicable statutory rate under the applicable tax law unless
the Manager shall have received an opinion of counsel or other evidence, satisfactory to the Manager, to the effect that a lower rate is applicable, or that no withholding or payment is required.
ARTICLE 7. WITHDRAWAL OF THE MANAGER.
7.1
Voluntary Withdrawal.
The Manager may voluntarily withdraw as a Manager from the Fund and terminate its service to the Fund provided that the following conditions are met:
(a) each Member shall have received written Notice of the Manager's intention to withdraw sixty (60) days in
advance;
(b) the Fund shall have received an opinion of counsel (which need not be special counsel) to the
effect that such withdrawal will not constitute a termination of the Fund, or otherwise materially adversely affect the status of the Fund for federal income tax purposes; and
(c) a Substitute Manager shall have been selected, and such Substitute Manager shall have: (i) expressed a
willingness to be admitted to the Fund, (ii) received the specific written Consent of the Majority Interest to such admission and (iii) a Net Worth sufficient to satisfy the net worth requirements for a "sponsor" under the NASAA
Guidelines.
Notwithstanding the foregoing, the Manager may voluntarily withdraw as a Manager from the Fund
(a) immediately upon the conclusion of the Liquidation Period; or (b) with ten (10) days advanced written Notice to the Members in the event of the amendment of this Agreement by the Members.
7.2
Involuntary Withdrawal.
The Manager shall be deemed to have involuntarily withdrawn as a
Manager from the Fund upon the removal of the Manager pursuant to the Consent of the Majority Interest or upon the occurrence of any other event that constitutes an event of withdrawal under the Act as then in effect. For purposes of this
Section 7.2 and Article 11, neither the Manager nor any of its Affiliates will participate in any vote by the Members to (a) involuntarily remove the Manager or (b) cancel any management or service contract or agreement with the
Manager or any such Affiliate.
7.3
Consequences of Withdrawal.
(a) Upon the withdrawal of the Manager in accordance with either Section 7.1 or Section 7.2, the Manager, or its
estate, successors or legal representatives, shall be entitled to receive from the Fund:
(i)
the positive fair market value of the interest in the income, losses, distributions and capital of the Fund then held by the Manager, as calculated in accordance with
the provisions of clause (c) of this Section 7.3;
(ii)
Asset Management Fees payable to the Manager with respect to Investments acquired by the Fund prior to the effective date of the Withdrawal of the Manager and which
have accrued as at the effective date of the Withdrawal of the Manager, as and when the Fund receives the Cash Flow from such Investments; and
(iii)
an amount equal to the difference between (A) any amounts due and owing to the Manager by the Fund (including any deferred fees) and (B) any amounts due and
owing by the Manager to the Fund, and, upon such payment, the Manager's interest in the income, losses, distributions and capital of the Fund shall be terminated.
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(b) Upon the Voluntary Withdrawal or Involuntary Withdrawal of the Manager
in accordance with Section 7.1 or Section 7.2, the Manager shall be paid the amounts due under Section 7.3(a) pursuant to a non-interest-bearing, unsecured promissory note of the Fund, with principal payable, if at all, from
distributions that the withdrawn Manager otherwise would have received under this Agreement had the Manager not withdrawn.
(c) For purposes of this Section 7.3, the fair market value of the withdrawn Manager's interest in the income, losses, distributions and capital of the Fund shall be determined, in good faith,
by such Manager and the Fund, or, if they cannot agree, by arbitration in accordance with the then current rules of the American Arbitration Association by two independent appraisers, one selected by the withdrawn Manager and one by the Members. In
the event that such two appraisers are unable to agree on the value of the withdrawn Manager's Shares within 90 days, they shall, within 20 days thereafter, jointly appoint a third independent appraiser whose determination shall be final and
binding; provided, however, that if the two appraisers are unable to agree within such 20 days on a third appraiser, the third appraiser shall be selected by the American Arbitration Association. The expense of arbitration shall be borne equally by
the withdrawn Manager and the Fund.
(d) In the event that the Manager pledges the Asset Management Fees
payable to it by the Fund to a Lender, the assignment to the Lender shall be binding in the event of the Voluntary Withdrawal or Involuntary Withdrawal of the Manager.
7.4
Continuation of Fund Business.
In the
event that the Manager withdraws from the Fund, the Manager, or its estate, successors or legal representatives, shall deliver to the Members Notice stating that it has withdrawn. If, within 90 days following such Withdrawal, any Person shall be
admitted to the Fund as a Substitute Manager, such Substitute Manager shall execute a counterpart of this Agreement and the business of the Fund shall continue. If no Substitute Manager shall have been so admitted to the Fund within 90 days
following the date of the Manager's Withdrawal, then the Fund shall be dissolved.
ARTICLE 8. TRANSFER OF UNITS.
8.1
Member Withdrawal.
A Member may withdraw from the Fund only in accordance with this Article 8. The withdrawal of a Member shall not dissolve or terminate the Fund. In the event of the withdrawal of any Member because of
death, legal incompetence, dissolution or other termination, the estate, legal representative or successor of such Member shall be deemed to be the Assignee of the Shares of such Member and may become a Substitute Member upon compliance with the
provisions of Section 8.3.
8.2
Assignment.
(a) Subject to the provisions of Sections 8.2(b) and (c) and 8.3 of this Agreement, any Member may Assign all or any
portion of the Shares owned by such Member to any Person (the "Assignee"); provided, that
(i)
such Member and such Assignee shall each execute a written Assignment instrument, which shall:
(A)
set forth the terms of such Assignment;
(B)
evidence the acceptance by the Assignee of all of the terms and provisions of this Agreement;
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(C)
include a representation by both such Member and such Assignee that such Assignment was made in accordance with all applicable laws and regulations (including, without
limitation, such minimum investment and investor suitability requirements as may then be applicable under state securities laws and the NASAA Guidelines); and
(D)
otherwise be satisfactory in form and substance to the Manager.
(b) Notwithstanding the foregoing, unless the Manager shall specifically consent, no Shares may be Assigned:
(i)
to a minor or incompetent (unless a guardian, custodian or conservator has been appointed to handle the affairs of such Person);
(ii)
to any Person if, in the opinion of counsel, such Assignment would result in the termination of the Fund, or its status as a partnership, for federal income tax
purposes; provided, however, that the Fund may permit such Assignment to become effective if and when, in the opinion of counsel, such Assignment would no longer result in the termination of the Fund, or its status as a partnership, for federal
income tax purposes;
(iii)
to any Person if such Assignment would affect the Fund's existence or qualification as a limited liability company under the Act or the applicable laws of any
other jurisdiction in which the Fund is then conducting business;
(iv)
to any Person not permitted to be an Assignee under applicable law, including, without limitation, applicable federal and state securities laws;
(v)
if such Assignment would result in the transfer of less than 500 Shares (unless, after giving effect to such Assignment, the Member would continue to own at least 500
Shares);
(vi)
if such Assignment would result in the retention by such Member of less than 500 Shares, or if the Assignee would not own at least 500 Shares;
(vii)
if, in the reasonable belief of the Manager, such Assignment might violate applicable law; or
(viii)
if, in the determination of the Manager, such Assignment would not be in the best interest of the Fund and its Members.
Any attempt to make any Assignment of Shares in violation of this Section 8.2(b) shall be null and void ab initio.
(c) No transfer, Assignment or redemption of Shares shall be made, and the Manager shall not recognize any such transfer,
Assignment or redemption for any purpose whatsoever, if it would result in the Fund being treated as an association taxable as a corporation or as a "publicly traded partnership" for federal income tax purposes. In addition, the Manager
shall not recognize for any purpose whatsoever (including recognizing any rights of the transferee, such as the right of the transferee to receive directly or indirectly Fund distributions or to acquire an interest in the capital or profits of the
Fund), an Assignment of Shares (or interest therein) if such Assignment occurred on an established securities market or a secondary market (or the substantial equivalent thereof) as defined under the Code and any Treasury Regulations or published
notices promulgated thereunder (a "Secondary Market") or fails to meet one or more of the Secondary Market "safe harbor" provisions of Treas. Reg. Section 1.7704-1 or any substitute safe harbor provisions that subsequently
may be established by Treasury Regulations or published notices. The Manager may, in its sole discretion, decline to recognize, for any purpose whatsoever, a transfer or Assignment even if it falls within one or more of the foregoing-referenced
Secondary Market "safe harbor" provisions. The Members agree to provide all information with respect to Assignments which the Manager deems necessary in order to determine whether a proposed transfer occurred or will occur on a Secondary
Market, and each Member hereby consents and agrees to any decision made by the Manager, in good faith, to deny a proposed Assignment of Shares hereunder. In no event shall the Fund recognize, for any purpose whatsoever, transfers in any taxable year
(other than those that the Manager concludes in good faith are described in
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Treas. Reg. Sections 1.7704-1(e)(1)(i)-(vii), 1.7704-1(e)(1)(ix), or 1.7704-1(g)), to the extent such transfers in the aggregate exceed 2% of the total interests in the Fund's capital or
profits as determined in accordance with Treas. Reg. Sections 1.7704-1(j) and 1.7704-1(k).
(d) Assignments
made in accordance with this Section 8.2 shall be considered consummated on the last day of the month upon which all of the conditions of this Section 8.2 shall have been satisfied and effective for record purposes and for purposes of
Article 8 as of the first day of the month following the date upon which all of the conditions of this Section 8.2 shall have been satisfied. Distributions to the Assignee shall commence the month following effectiveness of the Assignment.
8.3
Substitution.
(a) An Assignee shall be admitted to the Fund as a Substitute Member only if:
(i)
the Manager has reasonably determined that all conditions specified in Section 8.2 have been satisfied and that such admission shall not have any adverse effect
upon the Fund; and
(ii)
such Assignee shall have executed a transfer agreement and such other forms, including a power of attorney to the effect required by Article 13, as the Manager
reasonably may require to determine compliance with this Article 8.
(b) An Assignee who does not
become a Substitute Member in accordance with this Section 8.3 and who desires to make a further Assignment of his or her Shares shall be subject to all the provisions of Sections 8.2, 8.3 and 8.4 to the same extent and in the same manner as a
Member desiring to make an Assignment of Shares. Failure or refusal of the Manager to admit an Assignee as a Substitute Member shall in no way affect the right of such Assignee to receive distributions of cash and the share of the Profits or Losses
for tax purposes to which his or her predecessor in interest would have been entitled in accordance with Article 6.
(c) The Fund will amend this Agreement at least once each calendar quarter to reflect the admittance of an Assignee as a Substitute Member.
8.4
Status of an Assigning Member.
Any Member that shall Assign all of his or her Shares to an Assignee who becomes a Substitute Member shall cease to be a Member and shall
no longer have any of the rights or privileges of a Member.
8.5
Repurchase of Shares Held
by Foreign Partners.
The Fund shall have the right, but not the obligation, to repurchase, for cash, all or a portion of
the Shares of any Member, at the Applicable Repurchase Price, if such Member becomes a "foreign partner" as that term is used in Code Section 1446 at any time during the Term; provided, however, that:
(a) it must be the opinion of the Fund that such repurchase would not constitute a transaction on an established
securities market or a Secondary Market (or the substantial equivalent thereof);
(b) it must be the opinion of
the Fund that such repurchase would not jeopardize the Fund's treatment as a partnership for federal income tax purposes;
(c) it must be the opinion of the Fund that sufficient cash flow is available to provide the funds for such repurchase; and
(d) the Fund shall not, in any calendar year, repurchase Shares pursuant to this Section 8.5 that, in the aggregate,
along with all Shares otherwise transferred in such calendar year (other than those that the Manager in good faith concludes are described in Treas. Reg. Sections 1.7704-1(e)(i)-(vii), 1.7704-1(e)(ix) or 1.7704-1(g)), including Shares repurchased
pursuant to Section 8.6, exceed 2% of the total interests in the Fund's capital or profits as determined in accordance with Treas. Reg. Sections 1.7704-1(j) and 1.7704-1(k).
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8.6
Redemption of Shares.
(a) A Member (other than the Manager or an Affiliated Member) may request that the Fund redeem such Member's Shares.
The Fund shall not, in any calendar year, redeem Shares pursuant to this Section 8.6 that, in the aggregate, along with all Shares otherwise transferred in such calendar year (other than those that the Manager in good faith concludes are
described in Treas. Reg. Sections 1.7704-1(e)(i)-(vii), 1.7704-1(e)(ix), or 1.7704-1(g)) including Shares redeemed pursuant to Section 8.5, exceed 2% of the total interests in the Fund's capital or profits as determined in accordance with
Treas. Reg. Sections 1.7704-1(j) and 1.7704-1(k). With the prior Consent of the Manager, the Fund shall redeem, for cash, up to 100% of the Shares of such Member, at the Applicable Redemption Price. The Fund shall be under no obligation to redeem
Shares of a Member and shall do so only in the discretion of the Manager. In this regard, the Manager may take into consideration the time of year during which a redemption request is made, and the effect such a redemption would have on the 2% limit
described above. A Member desiring to have a portion or all of his Shares redeemed shall submit a request in form and substance satisfactory to the Fund. A request for redemption may be withdrawn by the Member at any time by providing Notice in
writing five (5) business days prior to the end of the fiscal quarter. The Manager shall accept or deny redemption requests quarterly.
(b) No reserves shall be established by the Fund for the redemption of Shares. Funds for the redemption of any Share may be derived from Cash Flow, general Reserves or additional Capital Contributions of
Members. Shares may be redeemed only if such redemption would not impair the capital or the Operations of the Fund and would not result in the termination under the Code of the Fund's taxable year or of its federal income tax status as a
partnership.
(c) In the event that the Manager receives requests for the Fund to redeem more Shares than there
are funds sufficient to redeem, the Manager may, in its discretion, give priority (i) first, to hardship redemptions (e.g., requests arising from death, major medical expense, family emergency, disability, a material loss of family income,
etc.), (ii) second, to provide liquidity for IRAs or qualified plans to meet required distributions, and (iii) to all other redemption requests.
(d) In the event that all Shares of any Member are redeemed, such Member shall be deemed to have withdrawn from the Fund and shall, from and after the date of the redemption of all Shares of such Member,
cease to have the rights of a Member.
8.7
Cancellation of Shares.
Any Shares acquired
(whether by redemption or otherwise) by the Fund pursuant to this Article 8 or any other provision of this Agreement shall (i) not be cancelled and shall remain available for sale pursuant to the Offering if acquired prior to the Termination
Date and (ii) be cancelled if acquired on or after the Termination Date.
8.8
Shares by
Assignment.
Persons holding Shares by assignment from entities holding Shares for the purpose of assigning all or a portion of such interests to subscribers (the "Assignor") shall have the same rights as if they were Members except as
prohibited by applicable law. The Assignor's management shall have fiduciary responsibility for the safekeeping and use of all funds and assets of the assignees, whether or not in the Assignor management's possession or control, and the
management of the Assignor shall not employ, or permit another to employ such funds or assets in any manner except for the exclusive benefit of the assignees. Such assignees shall not be permitted to contract away the fiduciary duty owed to the
assignees by the Assignor's management under the common law of agency.
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ARTICLE 9. DISSOLUTION AND WINDING-UP.
9.1
Events Causing Dissolution.
The Fund shall be dissolved upon the happening of any of the following events (each a "Dissolution Event"):
(a) the withdrawal of the Manager, unless a Substitute Manager shall have been admitted to the Fund in accordance with
Article 7 of this Agreement;
(b) the voluntary dissolution of the Fund (i) by the Manager with the
Consent of the Majority Interest or (ii) subject to Article 11 of this Agreement, by the Consent of the Majority Interest without action by the Manager;
(c) the Sale of all or substantially all of the Investments of the Fund;
(d) the expiration of the Fund term specified in Section 2.8 of this Agreement;
(e) the Operations of the Fund shall cease to constitute legal activities under the Act or any other applicable law; or
(f) any other event which causes the dissolution or winding-up of the Fund under the Act to the extent not otherwise
provided herein.
9.2
Winding-Up of the Fund; Capital Contribution by the Manager Upon
Dissolution.
(a) Upon the occurrence of a Dissolution Event, the winding-up of the Fund and the
termination of its existence shall be accomplished as follows:
(i)
if there is no Manager upon the occurrence of a Dissolution Event, a Person shall be selected by the Consent of the Majority Interest, to wind up the affairs of the
Fund, or if no such other Person is so selected, such other Person as is required by law to wind up the affairs of the Fund (the "Liquidator"), which Liquidator may exercise all of the powers granted to the Manager herein and is hereby
authorized to do any and all acts and things authorized by law and by this Agreement for such purposes and any and all such other acts or things consistent therewith as may be expressly authorized by the Majority Interest;
(ii)
the Manager or Liquidator shall proceed with the liquidation of the Fund, including, without limitation, the Sale of any remaining Investments and cancellation of the
Certificate of Formation, and is hereby authorized to adopt such plan, method or procedure as may be deemed reasonable by the Manager or Liquidator to effectuate an orderly winding-up;
(iii)
all Profits or Losses or items thereof and all amounts required to be specially allocated pursuant to Section 6.2(f) for the period prior to final termination
shall be credited or charged, as the case may be, to the Members in accordance with Article 6;
(iv)
in the event that, after all requirements of the foregoing clauses of this Section 9.2(a) shall have been accomplished, the Manager shall have a deficit balance in
its Capital Account, the Manager shall contribute within thirty (30) days to the Fund as a Capital Contribution an amount equal to the amount of such deficit balance;
(v)
the proceeds from Sales and all other assets of the Fund shall be applied and distributed in liquidation as provided in Section 9.3; and
(vi)
the Manager or Liquidator shall file such certificates and other documents as shall be required by the Act, the Code and any other applicable laws to terminate the
Fund.
(b) If the winding-up of the Fund is effected by the Manager, the Manager shall be
compensated for its services in connection therewith as provided in Section 4.6 of this Agreement and, if the winding-up is
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effected by a Liquidator, the Liquidator shall be compensated for its services in connection therewith in an amount not in excess of the amount customarily paid to non-affiliated third parties
rendering similar services in respect of similar entities in the same geographic location.
9.3
Application of Liquidation Proceeds Upon Dissolution.
Following the occurrence of any Dissolution Event, the proceeds
of liquidation and the other assets of the Fund shall be applied as follows and in the following order of priority (subject to any requirements of the Act):
(a) first, to the payment of creditors of the Fund in order of priority as provided by law, except obligations to Members or their Affiliates;
(b) next, to the setting up of any Reserve that the Manager or Liquidator shall determine is reasonably necessary for any
contingent or unforeseen liability or obligation of the Fund or the Members; such Reserve may, in the discretion of the Manager or Liquidator be paid over to an escrow agent selected by it to be held in escrow for the purpose of disbursing such
Reserve in payment of any of the aforementioned contingencies, and at the expiration of such period as the Manager or Liquidator may deem advisable, to distribute the balance thereafter remaining as provided in clauses (c)-(e) of this
Section 9.3.
(c) next, to the payment of all reimbursements to which the Manager or any of its Affiliates
may be entitled pursuant to this Agreement;
(d) next, to the payment of all obligations to the Members in
proportion to, and to the extent of advances made by, each Member pursuant to the provisions of this Agreement; and
(e) thereafter, to the Members, within the time period specified in Treas. Reg. Section 1.704-1(b)(2) (ii)(b)(2), in proportion to, and to the extent of, the positive balances of their Capital
Accounts after giving effect to all contributions, distributions, and allocations for all periods.
ARTICLE 10. FISCAL MATTERS AND REPORTS.
10.1
Title to Property and Bank Accounts.
All Investments and other assets of the Fund shall be held in the name of the Fund, except to the extent permitted in
Section 4.1(e)(vii). The funds of the Fund shall be deposited in the name of the Fund in such bank account or accounts as shall be designated by the Manager, and withdrawals therefrom shall be made upon the signature of the Manager or such
Person or Persons as shall be designated in writing by the Manager. The funds of the Fund shall not be commingled with the funds of any other Person except as permitted in Section 4.2(g).
10.2
Maintenance of and Access to Basic Fund Documents.
(a) The Manager shall maintain the following documents:
(i)
the Membership List, which shall be updated at least quarterly to reflect any known change in the information contained therein;
(ii)
a copy of the Certificate of Formation and all amendments thereto;
(iii)
copies of this Agreement and any amendments hereto, as well as executed copies of any powers of attorney pursuant to which this Agreement or any such amendment has been
executed;
(iv)
copies of the audited financial statements of the Fund for the three most recently completed Fiscal Years, including, in each case, the balance sheet and related
statements of operations, cash flows and changes in Members' equity at or for such Fiscal Year, together with the report of the Fund's independent auditors with respect thereto;
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(v)
copies of the Fund's federal, state and local income tax returns and reports, if any, for the three most recently completed Fiscal Years;
(vi)
records as required by applicable tax authorities, including those specifically required to be maintained by "tax shelters," if so required by the Fund;
(vii)
investor suitability records for Shares sold for a period of six years after such sale;
(viii)
complete and accurate financial books and records with respect to the business and affairs of the Fund, kept on an accrual basis and prepared in accordance with
generally accepted accounting principles; and
(ix)
such other records as are required to be maintained pursuant to the Foreign Corrupt Practices Act of 1977, as amended.
(b) Such books and records shall be kept at the principal place of business of the Fund and each Member and his or her
designated representative shall be given access to all of the foregoing records of the Fund, and may inspect the same and make copies of the same (subject, in the case of copying the Membership List, to compliance with clause (c) of this
Section 10.2) at the Member's expense, upon reasonable Notice and during normal business hours, which Notice shall specify the documents the Member intends to examine and/or copy.
(c) The Manager shall mail a copy of the Membership List to, or as directed by, any Member within ten (10) business
days of receipt by the Fund of a written request therefor together with a check in payment of the cost to the Manager of preparing and transmitting such list to such party or his designated representative; provided that, in connection with any
copying or request for a copy, such Member shall certify to the Fund that the Member is not requesting the Membership List for the purpose of (each, an "Impermissible Purpose"):
(i)
providing the Membership List (or any of the information set forth therein) to any third party (other than to the Member's designated representative(s)), except
when used in connection with exercising any voting rights of the Shares or any rights under federal proxy solicitation laws;
(ii)
selling the Membership List;
(iii)
using the Membership List for a commercial purpose unrelated to the Shares; or
(iv)
using the Membership List for an unlawful purpose.
The Manager shall not be required to mail a copy of the Membership List to, or as directed by, any Member unless such Member shall have certified to the Fund that the Member is not requesting the
Membership List for an Impermissible Purpose.
(d) If the Manager refuses or neglects to comply with
Section 10.2(b) or (c) hereof, the Manager shall be liable to such Member for the costs, including reasonable attorneys' fees, incurred by such Member to compel production of the Membership List, and for the actual damages (if any)
suffered by such Member by reason of such refusal or neglect. It shall be a defense that the requesting Member (i) has failed to pay the required fee, (ii) has not provided the Manager with the certification called for by
Section 10.2(c) hereof, or (iii) the Manager, in good faith, believes that the Member's purpose in requesting the Membership List is an Impermissible Purpose. The remedies provided under this Section 10.2(d) to Members requesting
copies of the Membership List are in addition to, and shall not in any way limit, other remedies available to Members under federal law or any applicable state laws.
10.3
Accounting Decisions
.
All decisions
as to accounting matters, except as specifically provided to the contrary herein, shall be made by the Manager in accordance with the accounting methods adopted by the Fund for federal income tax purposes
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or otherwise in accordance with generally accepted accounting principles. Such decisions must be reasonably acceptable to the accountants, and the Manager may rely upon the advice of the
accountants and counsel as to whether such decisions are in accordance with the methods adopted by the Fund for federal income tax purposes or generally accepted accounting principles.
10.4
Reports.
(a) Within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, the Manager shall
deliver to each Person who was a Member at any time during such Fiscal Quarter, the following written materials:
(i)
a report containing the same financial information as is contained in the Fund's quarterly report on Form 10-Q filed with the SEC under the Securities Exchange Act
of 1934, as amended;
(ii)
a detailed statement prepared by the Manager setting forth the fees and other compensation and costs and expenses which were paid or reimbursed by the Fund to the
Manager and its Affiliates during such Fiscal Quarter, identified and properly allocated as to type and amount. Such report shall (A) include a detailed statement identifying any services rendered or to be rendered to the Fund and the
compensation received therefor (if any) and (B) summarize the terms and conditions of any contract (if any), which was not filed as an exhibit to the Registration Statement, as amended and in effect as on the Effective Date. The requirement for
such summary shall not be circumvented by lump-sum payments to non-Affiliates who then disburse the funds to, or for the benefit of, the Manager and its Affiliates; and
(iii)
until all Capital Contributions have been invested or committed to investment in Investments and Reserves, used to pay permitted Front-End Fees or returned to the
Members (as provided in Section 6.6), a report of all Investments made during such Fiscal Quarter which shall include (A) a description of the types of Investments acquired, (B) the Purchase Price paid for such categories of
Investments, (C) the amounts of Capital Contributions and Indebtedness used to acquire such Investments, (D) the Acquisition Fees and Acquisition Expenses paid (identified by party) in connection therewith and (E) the amount of
Capital Contributions, if any, which remain unexpended and uncommitted to pending Investments as of the end of such Fiscal Quarter.
(b) Within 90 days after the end of each Fiscal Year, the Manager shall deliver to each Person who was a Member at any time during such Fiscal Year the following written materials:
(i)
financial statements for the Fund for such Fiscal Year, including a balance sheet as of the end of such Fiscal Year and related statements of operations, cash flows and
changes in Members' equity, which shall be prepared in accordance with generally accepted accounting principles and the rules and regulations of the SEC;
(ii)
an analysis, prepared by the Manager (which need not be audited by the Fund's auditors), of distributions made to the Members during such Fiscal Year separately
identifying the portion (if any) of such distributions from:
(A)
Cash Flow from operations during such period;
(B)
Cash Flow from operations during a prior period which had been held as Reserves;
(C)
Proceeds from the Sale of Investments;
(D)
Reserves comprised of Capital Contributions from Members;
(iii)
a status report with respect to each piece of Equipment which individually represents at least 10% of the aggregate Purchase Price of the Fund's Investments held
at the end of such Fiscal Year, which report shall state:
(A)
the condition of each such item of Equipment, to the knowledge of the Manager;
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(B)
how such Equipment was being utilized as of the end of such Fiscal Year (i.e., leased, operated directly by the Fund or held for lease, repair or sale), to the
knowledge of the Manager;
(C)
the remaining term of any Lease to which such Equipment is subject;
(D)
the projected or intended use of such Equipment during the next following Fiscal Year (i.e., lease; lease renewal; retire or sell);
(E)
the method used to determine values set forth therein;
(F)
such other information as may be relevant to the value or use of such Equipment as the Manager deems appropriate;
(iv)
an annual report which shall state:
(A)
the fees and other compensation and costs and expenses which were paid or reimbursed by the Fund to the Manager and its Affiliates during such Fiscal Year. Such report
shall (A) include a detailed statement identifying any services rendered or to be rendered to the Fund and the compensation received therefor (if any) and (B) summarize the terms and conditions of any contract (if any), which was not filed
as an exhibit to the Registration Statement, as amended and in effect as on the Effective Date. The requirement for such summary shall not be circumvented by lump-sum payments to non-Affiliates who then disburse the funds to, or for the benefit of,
the Manager and its Affiliates;
(B)
in the case of reimbursed costs and expenses, the Manager shall also prepare an allocation of the total amount of all such items and shall include support for such
allocation to demonstrate how the Fund's portion of such total amounts were allocated between the Fund and any other Programs in accordance with this Agreement and the respective governing agreements of such other Programs. Such cost and
expense allocation shall be reviewed by the accountants in connection with their audit of the financial statements of the Fund for such Fiscal Year in accordance with the American Institute of Certified Public Accountants United States Auditing
standards relating to special reports and such independent publicly registered accountants shall state that, in connection with the performance of such audit, such independent publicly registered accountants reviewed, at a minimum, the time records
of, and the nature of the work performed by, individual employees of the Manager and its Affiliates, the cost of whose services were reimbursed; and
(C)
the additional costs of the special review required by this subsection (ii) will be itemized by the independent publicly registered accountants and may be
reimbursed to the Manager and its Affiliates by the Fund in accordance with this subparagraph only to the extent such reimbursement, when added to the cost for all administrative services rendered, does not exceed the competitive rate for such
services as determined in such report;
(iii)
until all Capital Contributions have been invested or committed to investment in Investments and Reserves, used to pay permitted Front-End Fees or returned to the
Members (as provided in Section 6.6), a special report concerning all Investments made during such Fiscal Year which shall include (A) a description of the types of Equipment or Leases acquired, (B) the total Purchase Price paid for
such Investments, (C) the amounts of Capital Contributions and Indebtedness used to acquire such Investments, (D) the Acquisition Fees and Acquisition Expenses paid (identified by party) in connection therewith and (E) the amount of
Capital Contributions, if any, which remain unexpended and uncommitted to pending Investments as of the end of such Fiscal Year.
(c) The Manager may deliver the quarterly and annual reports electronically by posting the report on the Manager's website. If the Manager elects to deliver the quarterly and annual reports
electronically, the Manager shall provide a paper copy to any Member that requests one.
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10.5
Tax Returns and Tax Information.
The Manager shall:
(a) prepare or cause its accountants to prepare, in accordance with applicable laws and regulations, the tax returns (federal, state, local and foreign, if any) of the Fund for each Fiscal Year not later
than 75 days after the end of such Fiscal Year; and
(b) deliver to each Member by within 75 days after the end
of each Fiscal Year, all information necessary for the preparation of Members' federal income tax returns; provided, that the Manager shall deliver a Form K-1 or other statement setting forth such Member's share of the Fund's income,
gains, losses, deductions, and items thereof, and credits if any, for such Fiscal Year.
10.6
Federal Tax Elections.
The Fund, in the discretion of the Manager, may make elections for federal tax purposes as
follows:
(a) in case of a transfer of all or some of the Shares of a Member, the Fund, in the discretion of
the Manager, may timely elect pursuant to Section 754 of the Code (or corresponding provisions of future law), and pursuant to similar provisions of applicable state or local income tax laws, to adjust the basis of the assets of the Fund. In
such event, any basis adjustment attributable to such election shall be allocated solely to the transferee; and
(b) all other elections, including, but not limited to, the adoption of accelerated depreciation and cost recovery
methods, required or permitted to be made by the Fund under the Code shall be made by the Manager in such manner as will, in the opinion of the Manager (as advised by counsel or the accountants as the Manager deems necessary) be most advantageous to
the Members as a group. The Fund shall, to the extent permitted by applicable law and regulations, elect to treat as an expense for federal income tax purposes all amounts incurred by it for state and local taxes, interest and other charges which
may, in accordance with applicable law and regulations, be considered as expenses.
10.7
Tax
Matters Partner.
The Manager is hereby designated as the "Tax Matters Partner" under Section 6231(a)(7)
of the Code and may hereafter designate its successor as Tax Matters Partner. The Tax Matters Partner is authorized to represent the Fund before the Internal Revenue Service and any other governmental agency with jurisdiction; provided, however,
that (a) the Tax Matters Partner shall provide to the Members a timely summary of each oral and written communication from or to the Internal Revenue Service or any other taxing authority relating to any material Fund Tax matter and shall
promptly furnish to the Manager a copy of any significant correspondence relating thereto, (b) the Tax Matters Partner shall promptly provide to the Manager reasonably detailed accounts of all stages of each administrative or judicial
proceeding relating to Fund Tax matters and shall provide the Manager with sufficient notice thereof to enable them to participate fully therein, and (c) the Tax Matters Partner shall not (i) sign any consent, (ii) enter into any
settlement agreement or (iii) compromise any dispute with the IRS or any other taxing authority without the approval of the Manager. Nothing in this Section 10.7 shall limit the ability of any Member to take any action in his individual
capacity relating to Tax audit matters relating to the Fund that is left to the determination of an individual Member under sections 6222 through 6232 of the Code or any similar state or local provision.
10.8
Reports to Federal and State Authorities.
The Manager shall submit to an Administrator any information that such Administrator reasonably requires, including, but not limited to,
reports and statements required to be distributed to Members pursuant to Section 10.4.
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10.9
Special Direction and Consent Regarding Possible
Issuance of Final Regulations Affecting Issuance of Partnership Interests for Services.
In the event that proposed
regulations under,
inter alia
, Code Sections 83, 704 and 721 and issued by the IRS on May 24, 2005 under the docket number REG-105346-03, relating to issuance of partnership equity for services become finalized and, as finalized, would
apply to the Manager's interest in the Fund upon issuance of Shares in the Fund, the Fund is hereby authorized and directed to make the analogue found in such final regulations to the "safe harbor" election presently described in
Prop. Treas. Reg. Section 1.83-3(l)(1), whereby such Manager's interest would be valued for federal income tax purposes at its so-called "liquidation value," as such election is further amplified by a Revenue Procedure presently
published in draft form as Notice 2005-43. The Fund and each of its Members, including the Manager, agree to comply with all of the requirements of the safe harbor in connection with interests in the Fund transferred in connection with the
performance of services while the election remains effective, to execute such documentation as the Manager reasonably determines is necessary to comply with such election, and not to take any position for federal income tax purposes inconsistent
with such election.
ARTICLE 11. MEETINGS AND VOTING RIGHTS OF THE MEMBERS.
11.1
Meetings of the Members.
(a) In its sole discretion, the Manager may at any time call a meeting of the Members, and the Manager may submit for
action by Consent of the Members, in lieu of a meeting, any matter on which the Members may vote as set forth in this Article 11. The Manager shall call a meeting of the Members upon receipt of written request(s) for a meeting from Members holding
10% or more of the then outstanding Shares, to act upon any matter on which the Members may vote as set forth in this Article 11. Every such request for a meeting shall state with reasonable specificity (i) the purpose(s) for which such meeting
is to be held and (ii) the text of any matter, resolution or action proposed to be voted upon by the Members at such meeting. Within ten (10) days following the receipt of such a request, the Manager shall give Notice to all Members of
such meeting in the manner and for a time and place as specified in paragraph 11.1(b).
(b) A Notice of any
such meeting or action by written Consent in lieu of a meeting shall be given to all Members by certified mail and a meeting called pursuant to such Notice shall be held (or Consent action taken) not less than 15 days nor more than 60 days after the
date such Notice is distributed. Such Notice shall be mailed to each Member at his or her recorded address, or at such other address as he or she may have furnished in writing to the Manager for receipt of Notices, and shall state the place, date
and time of such meeting (as the Manager shall determine to be reasonable and convenient to the Members) and shall state the purpose(s) for which such meeting is to be held. If any meeting of the Members is properly adjourned to another time or
place, and if any announcement of the adjournment of time or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting. The presence in person or by proxy of the Majority Interest shall constitute a quorum at
all meetings of the Members; provided, however, that, if there be no such quorum, holders of a majority of the Shares so present or so represented may adjourn the meeting from time to time without further notice, until a quorum shall have been
obtained. No Notice of any meeting of Members need be given to any Member who attends in person or is represented by proxy (except when a Member attends a meeting for the express purpose of objecting at the beginning of the meeting to the
transaction of any business on the ground that the meeting is not lawfully called or convened) or to any Member otherwise entitled to such Notice who has executed and filed with the records of the meeting, either before or after the time thereof, a
written waiver of such Notice.
(c) For the purpose of determining the Members entitled to vote on any matter
submitted to the Members at any meeting of such Members (or to take action by Consent in lieu thereof), or any adjournment thereof, the Manager or the Members requesting such meeting may fix, in advance, a date as the record date, which shall be a
date not more than fifty (50) days nor less than ten (10) days prior to any such meeting (or Consent action), for the purpose of any such determination.
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(d) Any Member may authorize any Person or Persons to act for such Member by
proxy in respect of all matters as to which such Member is entitled to participate, whether by waiving Notice of any meeting, taking action by Consent or voting as to any matter or participating at a meeting of the Members. Every proxy must be
signed by a Member or his or her attorney-in-fact. No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at any time by the Member executing it.
(e) At each meeting of the Members, the Members present or represented by proxy may adopt such rules for the
conduct of such meeting as they shall deem appropriate, provided that such rules shall not be inconsistent with the provisions of this Agreement.
11.2
Voting Rights of the Members.
The
Members, acting by Consent of the Majority Interest, may take the following actions without the concurrence of the Manager:
(a) amend this Agreement;
(b) dissolve the Fund;
(c) remove the Manager and elect one or more Substitute Managers; and
(d) approve or disapprove of the Sale or series of Sales of all or substantially all the assets of the Fund.
If the Manager is a Member, it may not vote or consent on matters submitted to a vote of Members regarding the removal of the Manager or
regarding any transaction between the Fund and the Manager.
ARTICLE 12. AMENDMENTS.
12.1
Amendments by the Manager.
Subject to Section 12.2 of this Agreement and all applicable law, this Agreement may be amended, at any time and from time to time,
by the Manager without the Consent of the Majority Interest to effect any change in this Agreement for the benefit or protection of the Members, including, without limitation:
(a) to add to the representations, duties or obligations of the Manager or its Affiliates or to surrender any right or
power granted to the Manager herein;
(b) to cure any ambiguity, to correct or supplement any provision herein
that may be inconsistent with any other provision herein or to add any other provision with respect to matters or questions arising under this Agreement that will not be inconsistent with the terms of this Agreement which would not be inconsistent
with the provisions of this Agreement, and provided that no amendment hereunder will change the voting rights of the Members;
(c) to preserve the status of the Fund as a "partnership" for federal income tax purposes (or under the Act or any comparable law of any other state in which the Fund may be required to be
qualified);
(d) to delete or add any provision of or to this Agreement required to be so deleted or added by
the staff of the SEC, by any other federal or state regulatory body or other agency (including, without limitation, any "blue sky" commission) or by any Administrator or similar such official;
(e) to permit the Shares to fall within any exemption from the definition of "plan assets" contained in ERISA
Section 3(42) or Section 2510.3-101 of Title 29 of the Code of Federal Regulations;
(f) if the Fund
is advised by counsel, by the Fund's accountants or by the IRS that any allocations of income, gain, loss or deduction provided for in this Agreement are unlikely to be respected for federal income tax purposes, to amend the allocation
provisions of this Agreement, in accordance with the advice of
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such counsel, such accountants or the IRS, to the minimum extent necessary to effect as nearly as practicable the plan of allocations and distributions provided in this Agreement. Amendments made
by the Manager in reliance upon the advice of the accountants or counsel described above shall be deemed to be made pursuant to the fiduciary obligation of the Manager to the Fund and the Members, and no such amendment or amendments shall give rise
to any claim or cause of action by any Member; and
(g) to change the name of the Fund or the location of its
principal office.
12.2
Amendments with the Consent of the Majority Interest.
The Manager may propose to the Members, in writing, any amendment to this Agreement, which shall require the Consent of the
Majority Interest (except as provided for in Section 12.1); provided, however, that no such amendment shall increase the liability of any Member or adversely affect in a disproportionate manner any Member's share of distributions of cash
or allocations of Profits or Losses for tax purposes or of any investment tax credit amounts of the Fund without in each case the prior written consent of each Member affected thereby.
ARTICLE 13. SPECIAL POWER OF ATTORNEY
13.1
Execution of Power of Attorney.
By their subscription for Shares and admission as members
hereunder, each Member hereby grants to the Manager a special power of attorney irrevocably making, constituting and appointing the Manager, its duly appointed officers, and any one of them, as the attorney-in-fact for such Member, with power and
authority to act alone in his name and on his behalf to execute, acknowledge and swear to the execution, acknowledgement and filing of the following documents:
(a) this Agreement, the Certificate, any separate certificates, as well as any amendments to the foregoing which, under the laws of the State of Delaware or the laws of any other state or other
jurisdiction, are required to be filed or which the Manager deems advisable to file;
(b) any other instrument
or document which may be required to be filed by the Fund under the laws of any state or other jurisdiction or by any governmental agency, or which the Manager deems advisable to file;
(c) any document, certificate or instrument required to record or reflect any action of the Members duly taken in the
manner provided for in this Agreement; and
(d) any instrument or document which may be required to effect the
continuation of the Fund, the admission of an additional or Substitute Member, or the dissolution and termination of the Fund in accordance with the terms of this Agreement, or to reflect any reductions in amount of contributions of Members.
13.2
Amendments to Agreement and Certificate of Formation.
With respect to any
amendment of this Agreement or any action proposed to be taken or omitted by, or with respect to, the Fund, which amendment or action requires, under the terms of this Agreement, the Consent of the Members, then, on the satisfaction of that
requirement, each Member hereby agrees that the Consent of the Members shall constitute the approval of all of the Members and shall satisfy any unanimity requirements under the Delaware Act.
13.3
Special Power of Attorney.
The special power of attorney being granted hereby:
(a) is a special power of attorney coupled with an interest, is irrevocable, shall survive the death or legal incapacity
of the granting Member, and is limited to those matters herein set forth;
(b) may be exercised by the Manager
acting alone for each Member by a facsimile signature of such Manager or by one of its officers, or by listing all of the Members executing any instrument with a single signature of a Manager, or of one of the Manager's officers, acting as
attorney-in-fact; and
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(c) shall survive an assignment by a Member of all or any portion of his
Shares except that, where the Assignee of the Shares owned by a Member has been approved by the Manager for admission to the Fund as a Substitute Member, the special power of attorney shall survive such assignment for the sole purpose of enabling
the Manager to execute, acknowledge and file any instrument or document necessary to effect such substitution.
ARTICLE 14. GENERAL PROVISIONS.
14.1
Notices.
Unless
otherwise expressly specified or permitted by the terms of this Agreement, all notices, requests, demands and instructions hereunder shall be in writing and shall be delivered by hand or courier service, or shall be mailed by registered or certified
mail, postage prepaid, or shall be sent by facsimile to the following addresses: (a) if to the Manager, to Macquarie Asset Management Inc., 225 Franklin Street, 17
th
Floor, Suite 1700, Boston, MA 02110, facsimile: (617) 457-0648; or (b) if to any Member, at such address as
appears for such Member on Schedule A, or, in either case, at such other address as the relevant party hereto may from time to time designate by written notice to the other parties hereto. Whenever any notice is required to be given hereunder, such
notice shall be deemed given only when such notice is delivered or, if mailed or sent by facsimile, when received, unless otherwise expressly specified or permitted by the terms hereof. Whenever any notice is required to be given by law or this
Agreement, a written waiver thereof signed by the Person entitled to such notice, whether before or after the time stated at which such notice is required to be given, shall be deemed equivalent to the giving of such notice. Notwithstanding the
foregoing, the Fund may provide Notice, the reports required under Section 10.4 and the tax information required under Section 10.5 electronically, either through delivery to email addresses provided by a Member or by posting such reports
or information to the Fund's internet website, subject to, and in compliance with, all of the requirements of any applicable federal or state laws, rules or regulations.
14.2
Reliance by Third Parties.
No Person dealing with the Fund or its assets, whether as assignee, lessee, purchaser, mortgagee, grantee or otherwise, shall be
required to investigate the authority of the Manager in selling, assigning, leasing, mortgaging, conveying or otherwise dealing with any Investments or other assets or any part thereof, nor shall any such assignee, lessee, purchaser, mortgagee,
grantee or other Person entering into a contract with the Fund be required to inquire as to whether the approval of the Members for any such assignment, lease, sale, mortgage, transfer or other transaction has been first obtained. Any such Person
shall be conclusively protected in relying upon a certificate of authority signed by the Manager, or in accepting any instrument signed by the Manager, in the name and behalf of the Fund or the Manager.
14.3
Entire Agreement.
This Agreement, together with all Schedules hereto, constitutes the entire
agreement of the Members relating to the Fund with respect to the subject matter hereof, and supersedes any and all prior contracts or agreements with respect to the subject matter hereof, whether oral or written.
14.4
Effect of Waiver or Consent.
A waiver or consent, express or implied, to or of any breach or
default by any Person in the performance by that Person of its obligations hereunder or with respect to the Fund is not a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations
of that Person hereunder or with respect to the Fund. Failure on the part of a Person to complain of any act of any Person or to declare any Person in default hereunder or with respect to the Fund, irrespective of how long that failure continues,
does not constitute a waiver by that Person of its rights with respect to that default until the applicable statute-of-limitations period has run.
14.5
Binding Effect.
Subject to the restrictions on Transfers set forth in this Agreement, this Agreement shall be binding on, and inure to the benefit of, the
Members and their respective heirs, legal representatives, successors and permitted assigns.
14.6
Governing Law.
This Agreement is governed by and shall be construed in accordance with the
laws of the State of Delaware, excluding any conflict of laws rule or principle that might refer the governance or the
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construction of this Agreement to the law of another jurisdiction. In the event of a direct conflict between the provisions of this Agreement and any provision of any mandatory provision of the
Act, the applicable provision of the Act shall control.
14.7
Further Assurances.
In
connection with this Agreement and the transactions contemplated hereby, each Member shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate or perform the
provisions of this Agreement and those transactions.
14.8
Waiver of Certain Rights.
To
the fullest extent permitted by law, each Member irrevocably waives any right to maintain any action for dissolution (except pursuant to Section 18-802 of the Act) of the Fund or for partition of the property of the Fund.
14.9
Notice to and Consent of Members.
By executing this Agreement, each Member acknowledges that
it has actual notice of and consents to (a) all of the provisions hereof (including the restrictions on Transfer set forth in Article 8) and (b) all of the provisions of the Certificate.
14.10
Counterparts.
This Agreement may be executed in multiple counterparts with the same effect as
if all signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument.
14.11
Headings.
The headings used in this Agreement are for the purpose of reference only and shall not otherwise affect the meaning or interpretation of any
provision of this Agreement.
14.12
Remedies.
The Fund, the Manager and the Members
shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement (including costs of enforcement) and to exercise any and all other rights existing in their
favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that the Fund, the Manager or any Member may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation or threatened violation of the provisions of this Agreement.
14.13
Severability.
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained
herein.
14.14
Certain Conventions.
Unless the context otherwise requires, the masculine
when used herein shall include the feminine and neuter and vice versa. The words "herein," "herewith" and "hereof" and words of similar import refer to this Agreement as a whole and not to any particular article,
section or provision. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation."
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Table of Contents
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
MACQUARIE ASSET MANAGEMENT INC.
MANAGER:
By:
/s/    David
Fahy
David Fahy, President
INITIAL MEMBER:
By:
/s/    David
Fahy
David Fahy, President
FUND:
By:
/s/    David
Fahy
David Fahy, President
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Table of Contents
APPENDIX B
PRIOR PERFORMANCE TABLES
Macquarie Asset Management Inc. (the "Manager") is the manager of Macquarie
Equipment Leasing Fund Two, LLC (the "Fund") being offered by this prospectus. The Manager is a member of the Macquarie Group. The Macquarie Group is a diversified international provider of banking, financial, leasing, advisory and
investment services. The Macquarie Group has extensive equipment leasing experience, approximately $8.6 billion of equipment leases under management for its own account with over 700 employees located in North America, Europe, Asia and Australia /
New Zealand as at September 30, 2010. The Manager is also the manager of Macquarie Equipment Leasing Fund, LLC ("Fund One"), the only previous publicly-offered equipment leasing fund sponsored by our Manager.
Fund One commenced a public offering of up to $157,200,000 of its shares on June 19, 2009. As of September 30, 2010, $13,180,685 of
offering proceeds, net of offering costs, had been received from 450 investors. Fund One was in its offering phase until June 18, 2011. Fund One had acquired equipment and made equipment related investments with a total purchase cost of $6,500,000
as of September 30, 2010. There were no sales or dispositions as of September 30, 2010. Fund One has investment objectives and policies that are substantially similar to those of the Fund. The records for Fund One were maintained in accordance with
accounting principles generally accepted in the United States of America ("GAAP") for financial statement purposes.
The following unaudited tables disclose certain information relating to the performance, operations and investment for Fund One.
Purchasers of shares in the Fund will not acquire any ownership interest in Fund One and should not assume that they will experience investment results or returns, if any, comparable to those experienced by investors in Fund One.
The following is a list of the tables set forth in this Exhibit B:
Table I
—
Experience in Raising and Investing Funds
Table II
—
Compensation to the Manager and Affiliates
Table III
—
Operating Results of Prior Programs
Fund
One is the only previous publicly-offered equipment leasing fund sponsored by our Manager. Fund One is currently in its operating phase, and as such the Manager has no prior performance information available for completed programs. Fund One has not
made any sales or disposals of its portfolio investments.
Additional information concerning Fund One is contained in the
Annual Reports on Form 10-K for Fund One, which may be obtained (after their respective filing dates) without charge by contacting Macquarie Asset Management Inc., 225 Franklin St., Suite 1700, Boston, MA 02110 Such Annual Reports on Form 10-K will
also be available upon request at the office of the Securities and Exchange Commission. The results of Fund One should not be considered indicative of the likely results of the Fund. Moreover, the information presented below should not be considered
indicative of the extent to which Fund One will achieve its objectives, because this will in large part depend upon facts which cannot now be determined or predicted.
Investors in the Fund should not expect results comparable to those of Fund One or other equipment leasing activities conducted by the Macquarie Group Limited group of companies. Prior performance is
not indicative of future performance.
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Table of Contents
TABLE I
EXPERIENCE IN RAISING AND INVESTING FUNDS
December 31, 2010
(Unaudited)
The following table sets forth certain information, for the period from the inception of Fund One to December 31, 2010, concerning the experience of the Manager in raising and investing funds in the
only publicly-offered equipment leasing fund it has previously offered, Fund One. Fund One information is provided with respect to the manner in which Fund One's offering proceeds have been applied as at December 31, 2010. Fund One had not
completed its offering at that date.
Fund One
% of Dollar
Amount Raised
Dollar amount offered
$
157,200,000
Dollar amount raised, net of redemption
$
20,743,194
100
%
Less offering expenses:
Sales Commissions
$
(1,341,671
)
6.47
%
Dealer Manager Fees
$
(523,779
)
2.53
%
Organizational and Offering Expenses
$
(510,536
)
2.46
%
Cash Reserves
$
—
0.00
%
Offering proceeds available for investment
$
18,367,208
88.55
%
Total assets acquired to date
$
9,300,833
44.41
%
Acquisition costs:
Purchase price
$
9,212,688
44.41
%
Acquisition fees
276,381
1.33
%
Acquisition expenses
6,764
0.03
%
Total acquisition costs
$
9,495,833
45.78
%
Percent leverage (acquisition debt incurred divided by total assets acquired)
0.00
%
Date offering commenced
June 19, 2009
Original offering period (in months)
24
Offering period remaining as at December 31, 2010 (in months)
5.5
Months to invest 90% of amount available for investment
(measured from the beginning of the offering)
Investors in the Fund should not expect results comparable to those of Fund One.
Prior performance is not indicative of future performance.
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TABLE II
COMPENSATION TO MACQUARIE ASSET MANAGEMENT INC. AND AFFILIATES
December
31, 2010
(Unaudited)
The following table sets forth certain information, for the period from the inception of Fund One to December 31, 2010, concerning the compensation received by the Manager and its affiliates from the
only publicly-offered equipment leasing fund the Manager has previously offered, Fund One. Fund One had not completed its offering at that date.
Fund One
Dollar Amount
% of Equity
Invested
Date offering commenced
June 19, 2009
Dollar amount raised to date, net of redemption
$
20,743,194
Offering proceeds and cash generated from operations
$
20,719,202
Amounts paid/accrued to the Manager and its affiliates from proceeds of the offering:
Dealer Manager Fees and Selling Commissions
$
523,779
5.69
%
Organizational and Offering Expense allowance
$
510,536
5.54
%
Other Offering Expenses
$
—
0.00
%
Dollar amount of cash generated from operations before deducting such payments/accruals to the Manager and its
affiliates
$
208,090
2.26
%
Amounts paid/accrued to the Manager:
Acquisition fees
$
276,381
3.00
%
Asset Management fees
$
32,143
0.35
%
Acquisition expense reimbursements
$
—
0.00
%
Outperformance fees
$
6,385
0.07
%
Operating expense reimbursements
$
850,130
9.23
%
Distributions
$
77,591
0.84
%
Investors in the Fund should not expect results comparable to those of Fund One.
Prior performance is not indicative of future performance.
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TABLE III
OPERATING RESULTS OF PRIOR PUBLIC FUNDS — FUND ONE
December 31, 2010
(Unaudited)
The following table summarizes the operating results of Fund
One for the three years ended December 31, 2010, December 31, 2009 and December 31, 2008.
Years Ended December 31,
2010
2009
2008
Revenues
$
226,924
$
—
$
—
Profit (loss) on sale of assets
—
—
—
Gross revenues
$
226,924
$
—
$
—
Less: Operating expenses
Impairment loss
$
—
$
—
$
—
Interest expense
—
—
—
Depreciation and amortization
(56,877
)
—
—
Management fees
(32,143
)
—
—
Administrative expense reimbursements
(850,130
)
—
—
General and administrative
—
—
—
Acquisition fees
(195,000
)
—
—
Vessel operating expense
—
—
—
Loss on hedging instruments
—
—
—
Bad debt expense
—
—
—
Other financial loss
—
—
—
Other
(22,728
)
(410
)
(116
)
Noncontrolling interest
$
—
$
—
$
—
Net income (loss) — GAAP
$
(929,954
)
$
(410
)
$
(116
)
Net income (loss) allocable to investors — GAAP
$
(929,954
)
$
(410
)
$
(116
)
Taxable income (loss):
— from operations
$
$
$
— from gain (loss) on sales
$
$
$
Cash used by operations
$
(23,466
)
$
(410
)
$
(116
)
Cash used by investing
(8,942,742
)
—
—
Cash generated from financing (before distribution)
18,428,725
—
5,000
Cash generated from operations, sales and refinancing
$
9,462,517
$
(410
)
$
4,884
Less:
Cash distributions to investors from operations, sales and refinancing
$
(430,318
)
$
—
$
—
Cash distributions to Manager from operations, sales and refinancing
(66,598
)
—
—
Cash generated from (used by) operations, sales and refinancing
$
8,965,601
$
(410
)
$
4,884
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TABLE III
OPERATING RESULTS OF PRIOR PUBLIC FUNDS — FUND ONE—(continued)
December 31, 2010
(Unaudited)
Years Ended December 31,
2010
2009
2008
Tax and distributions data per $1,000 investment
Federal income tax results:
Taxable income (loss)
— from operations
$
$
$
— from gain (loss) on sales
Cash distributions to investors
Source (on GAAP basis):
— Investment income
$
$
$
— Return of capital
Total
$
$
$
Source (on Cash basis):
— Operations (current and/or prior periods)
$
$
$
— Sales
— Refinancing
Total
$
$
$
Weighted average number of additional member shares outstanding
994,634
500
500
Amount invested in assets (cost, excluding acquisition fees)
$
9,212,688
$
—
$
—
Amount invested in assets (net book value)
$
8,856,640
$
—
$
—
Amount remaining invested in fund assets at December 31, 2009
Investors in the Fund should not expect results comparable to those of Fund One.
Prior performance is not indicative of future performance.
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Table of Contents
APPENDIX C
HOW TO INVEST
SUBSCRIPTION AGREEMENT
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
A Delaware Limited Liability Company
SUMMARY AND INSTRUCTIONS
1. Subscription Amount
•     Complete the information requested in Section 1 on Page
C-8.
•     The subscription price for each Share is $10.00, subject
to certain exceptions and reductions as described in the prospectus relating to the offering of the Shares (the Prospectus).
•     The minimum initial investment is 500 Shares (equaling a
$5,000 minimum investment at $10.00 per Share).
•     There is no minimum initial investment for our DRP, or for members of Macquarie Equipment Leasing Fund, LLC who elect to invest all the distributions that they receive
with respect to their investment in that fund in our shares issued under our DRP.
•     If you have already subscribed for the minimum initial investment, you may make additional
investments in any amount.
2. Registration Information
•     Complete the information requested in Section 2(a) on
Page C-8.
•     Check the appropriate box in Section 2(b) on Page C-8
indicating whether you are a U.S. Citizen with a resident address in the U.S. or a U.S. Resident Alien with a resident address in the U.S. Non-Residents are prohibited from purchasing Shares.
•     If your investment is in an IRA or Qualified Plan,
trust, custodial account, or profit sharing plan, complete Section 2(c) on Page C-8.
•     Optional: If you would like to list the person to whom your shares should be
transferred to in the case of death, complete Section 2(d) on Page C-8
•     Check the appropriate box in Section 2(e) on Page C-8 if
you:
•     are (i) an employee of the Macquarie Group of Companies (the Macquarie
Group), or (ii) an immediate family member or person or personal company controlled by a Macquarie Group employee, or (iii) a Macquarie Group company or a company controlled by the Macquarie Group. Such persons may be prohibited from purchasing
Shares.
•     are (i) an employee of a selling dealer, or any of its affiliates, who is
participating in this offering, AND (ii) you are purchasing for your own account or your IRA or qualified plan.
3. Form of Ownership
•     Please mark only one box indicating the form of ownership (e.g. individual or corporation)
in Section 3 on Page C-9.
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Table of Contents
4. Distribution and DRP Elections
•      Distributions will be directly deposited into the
bank account that you specify in Section 5 on Page C-9.
•      You may elect to participate in our distribution reinvestment plan (DRP) by checking the box in Section 4 on Page C-9. This allows you to reinvest all or a
portion of your distributions from us by acquiring additional Shares in lieu of cash. The subscription price for Shares under the DRP is $9.00 per Share, and there is no minimum purchase amount.
•      You may elect to split distributions among two payees or to have
distributions paid to another payee in Section 4 on Page C-9.
5. Bank Account
•      Complete the information requested in Section 5 on Page C-9.
6. Electronic Delivery
•      Complete the information requested in Section 6 on Page C-10. By checking
"Yes" and providing your email address, you consent to the electronic delivery to you of prospectus materials and notices associated with this offering instead of receiving those materials in paper form.
7. Signatures and Initials
•      You must sign and initial the appropriate areas in Section 7 on
Page C-10 or your
subscription cannot be accepted.
8. Further Signatures
•      You must sign Section 8 on Page C-10 or your subscription cannot be
accepted.
9. Selling Dealer Information
•      Your Selling Dealer must complete and sign Section 9 on Page C-11 or this
subscription cannot be accepted.
10. Subscription Funds, Mailing Instructions and Confirmations
•      Checks should be made payable to "Macquarie Equipment Leasing Fund Two,
LLC," unless your Selling Dealer informs you that the minimum offering escrow is still in effect, in which case the checks should be payable to "Wells Fargo Bank as Escrow Agent for Macquarie Equipment Leasing Fund Two, LLC." Wiring
instructions are available upon request.
NO SUBSCRIPTION AGREEMENT WILL BE ACCEPTED UNLESS IT IS FULLY COMPLETED AND
ACCOMPANIED BY PAYMENT IN FULL. ANY SUBSCRIPTION PAYMENT THAT IS DISHONORED WILL CAUSE THE SUBSCRIPTION AND ANY CERTIFICATE FOR SHARES TO BE VOID AS OF THE SUBSCRIPTION DATE AND SHALL OBLIGATE THE SUBSCRIBER TO PAY ALL COSTS AND CHARGES ASSOCIATED
THEREWITH. OUR MANAGER MAY REJECT ANY SUBSCRIPTION AGREEMENT FOR ANY REASON IN ITS SOLE DISCRETION.
If you have any questions about
completing this Subscription Agreement, please call Macquarie Asset Management Inc., Investor Relations at 888-299-8699 or consult your selling dealer.
Important Information for All Subscribers
•
Terms used but not defined in this Subscription Agreement have the meanings ascribed to them in the Limited Liability Company Operating Agreement of
Macquarie Equipment Leasing Fund Two, LLC (the "Operating Agreement").
•
No offer to sell Shares may be made except by means of the Prospectus.
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Table of Contents
•
You should not rely upon any oral statements by any person, or upon any written information other than as specifically set forth in the Prospectus and
supplements thereto or in promotional brochures clearly marked as being prepared and authorized by Macquarie Asset Management Inc., our Manager, or by Macquarie Capital (USA), Inc., our Dealer Manager, for use in connection with the offering of
Shares to the general public by means of the Prospectus.
•
An investment in our Shares involves certain risks and tax consequences, including those described in the Prospectus under the headings "Risk
Factors" and "Federal Income Tax Consequences."
•
Our Shares are subject to substantial restrictions on transferability and there will be no public trading market for the Shares. It may not be possible
for you to readily liquidate your Shares, if at all, even in the event of an emergency. Any transfer of our Shares is subject to our approval and must comply with the terms of Article 8 of our Operating Agreement. There will be no public market for
our Shares.
•
The representations that you make under the "Terms of the Subscription Agreement" in no way waive any of your rights under the Delaware
Limited Liability Company Act or applicable federal or state securities laws.
•
Unless otherwise specified below, you must meet our basic suitability requirements in order to purchase our Shares. In general, you must have either:
•
a minimum annual gross income of $70,000 and a minimum net worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or
•
a minimum net worth of $250,000 (calculated exclusive of home, home furnishings and automobiles).
•
Basic suitability requirements may vary from state to state.
•
You must be either a U.S. citizen with a resident address in the U.S. (individuals only) or a resident alien residing in the U.S. in order to purchase
our Shares.
Important Information for Residents of Certain States
•
Alabama Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and similar equipment
leasing programs may not exceed 10% of your liquid net worth.
•
California Investors.
The offering is limited to suitable investors only. You must have either (1) a liquid net worth of not less than
$100,000 and a gross annual income of not less than $75,000, or (2) a liquid net worth of $250,000, in both instances exclusive of your home, home furnishings and automobiles. In addition, your investment in us may not exceed 10% of your net
worth.
•
Iowa Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates may not
exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles.
•
Kansas Investors.
Under suitability guidelines of the Office of the Kansas Securities Commissioner, you are cautioned to carefully evaluate
whether your aggregate investment in us and other similar investments should exceed 10% of your liquid net worth. Liquid net worth is that portion of your total net worth, or total assets minus total liabilities, that is comprised of cash, cash
equivalents and readily marketable securities. Readily marketable securities may include investments in an IRA or other retirement plan that can be liquidated within a short time, less any income tax or other penalties that may apply for early
distribution.
•
Kentucky Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth.
•
Michigan Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliated
programs may not exceed 10% of your liquid net worth.
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Table of Contents
•
Missouri Investors.
You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of
your net worth, calculated exclusive of home, home furnishings and automobiles.
•
Ohio Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and in affiliated programs
may not exceed 10% of your liquid net worth, calculated exclusive of your home, home furnishings and automobiles.
•
Oklahoma Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us may not exceed 10% of
your net worth, calculated exclusive of your home, home furnishings and automobiles.
•
Oregon Investors.
You must meet the general suitability standards set forth above. In addition, in no event may you invest more than 10% of your
net worth, calculated exclusive of home, home furnishings and automobiles.
•
Pennsylvania Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us and our affiliates
may not exceed 10% of your net worth, calculated exclusive of your home, home furnishings and automobiles. Because the minimum offering amount is less than $20,000,000, which represents 10% of the maximum offering amount, you are cautioned to
carefully evaluate the program's ability to fully accomplish its stated objectives and to inquire as to the current dollar volume of program subscriptions. In addition, subscription proceeds of Pennsylvania investors will be held in an escrow
account until we receive and accept subscriptions for at least $10,000,000 in offering proceeds. We must offer you the opportunity to rescind your subscription if we have not received subscriptions for $10,000,000 within 120 days of the date the
escrow agent receives your subscription proceeds. We must repeat this offer to you every 120 days during the offering period until we have received and accepted subscriptions for $10,000,000.
•
Tennessee Investors.
You must meet the general suitability standards set forth above. In addition, your investment in us must not exceed ten
percent (10%) of your liquid net worth.
•
Vermont Investors.
You must meet the general suitability standards set forth above. In addition, your maximum investment in us and our
affiliates may not exceed 10% of your net worth.
Consent to Electronic Delivery of Offering Materials
Macquarie Equipment Leasing Fund Two, LLC (the "Fund") will deliver quarterly reports and annual reports to you electronically
by way of us posting the quarterly reports and annual reports to our website (www.macquarie.com/mami). The Fund can deliver offering materials to you electronically, instead of in paper form. The delivery of offering materials to you electronically
is optional. By checking the "Yes" box and providing your email address in Section 6 on Page C-8, you consent to having the Fund electronically deliver offering materials to you, including:
•     prospectuses;
•     prospectus supplements;
•     prospectus amendments;
•     supplemental sales materials;
•     notices; and
•     distribution statements and other information.
(collectively, the "Offering Materials").
The Fund may accomplish electronic delivery via:
•
posting Offering Materials to our website (www.macquarie.com/mami). You will be notified that such materials are available for viewing on the website
by e-mail, physical mail or telephone; and
•
sending e-mails to investors containing Offering Materials.
C-4
Table of Contents
You may need to download a portable document format (.pdf) .document
viewer, such as Adobe Acrobat
®
, in order to view certain Offering Materials. Investors can download the Adobe
Acrobat
®
software free of charge at http://www.adobe.com/products/acrobat/readermain.html.
If you would like to update your email address, or if you are otherwise in need of assistance in connection with electronic delivery of
Offering Materials, you should contact Macquarie Asset Management Inc., Investor Relations at 888-299-8699.
You may revoke
your consent to electronic delivery of offering materials at any time by providing timely notice of revocation to the Fund. You may elect to receive paper copies of Offering Materials at any time upon request, with or without revoking this consent.
C-5
Table of Contents
SUBSCRIPTION AGREEMENT
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
A Delaware Limited Liability Company
TERMS OF SUBSCRIPTION AGREEMENT
By signing your name to Section 7 and Section 8 on Page C-10, you thereby agree to the following terms and
conditions of this Subscription Agreement:
1.
Subscription
.
1.1. You agree to (i) subscribe for the number and dollar amount of Shares set forth in Section 1 on Page C-8; (ii) agree to become a member of Macquarie Equipment Leasing Fund Two, LLC
(the "Fund") upon the acceptance of your subscription by Macquarie Asset Management Inc. (the "Manager"); and (iii) adopt and to be bound by each and every provision of the Fund's Limited Liability Company Operating
Agreement (the "Operating Agreement") and this Subscription Agreement.
1.2. You have tendered good funds with this
Subscription Agreement in full payment for the Shares as specified in Section 1 on Page C-8.
2.
Grant of Special Power of
Attorney
.
2.1. You grant to the Manager a special power of attorney irrevocably making, constituting and appointing the
Manager, its duly appointed officers, and any one of them, as your attorney-in-fact, with power and authority to act alone in your name and on your behalf to the full extent, and for the purposes and duration, set forth in Article 13 of the
Operating Agreement, all of the terms of which are hereby incorporated herein by this reference.
Such purposes include,
without limitation, the power to make, execute, sign, acknowledge, affirm, deliver, record and file any (a) document or instrument that the Manager deems necessary or desirable to carry out fully the provisions of the Operating Agreement (in
the manner and for the purposes provided in Section 13.1 of the Operating Agreement) and (b) amendment to the Operating Agreement and to the Certificate of Formation of the Fund (in the manner and for the purposes provided in
Section 13.1 of our Operating Agreement, including, without limitation, admission of members to the Fund and any application, certificate, instrument, affidavit or other document required or appropriate in connection with registration or
documentation of the Fund's investments).
2.2. The special power of attorney being granted is a special power of
attorney coupled with an interest, is irrevocable, shall survive your death or legal incapacity, and is limited to those matters set forth in Section 13.1 of the Operating Agreement.
3.
Subscriber Representations
. As a condition to you being admitted as a member of the Fund, you hereby represent that:
3.1. You have either (i) a minimum annual gross income of $70,000 and a minimum net worth of $70,000 (calculated exclusive of your home, home furnishings and automobiles); or (ii) a minimum net
worth of $250,000 (calculated exclusive of your home, home furnishings and automobiles); and if you reside in a state for which more stringent suitability standards are required, which states and standards are set forth in the Prospectus, you meet
such applicable standards. In the case of fiduciary accounts (such as IRAs or trusts), these minimum standards must be met by the beneficiary, the fiduciary account (such as the IRA), or by the donor or grantor who directly or indirectly supplies
the funds to purchase the Shares if the donor or grantor is the fiduciary.
3.2. If the subscriber is an IRA or a Qualified
Plan, it has been accurately identified as such in Section 2(c) on Page C-8 and in Section 3 on Page C-9.
C-6
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3.3. You have accurately identified yourself in Section 2(b) on Page C-8 as a U.S.
Citizen, resident in the U.S. (individuals only) or as a U.S. resident alien; and
3.4. Each subscriber who is purchasing
Shares for individual ownership (as indicated in Section 2(a) on Page C-8) is in fact purchasing for his or her or its own account and not with a view to distribution.
3.5. Any member of the Fund who becomes a "foreign partner" as that term is used in Section 1446 of the Internal Revenue Code agrees to sell for cash, all or a portion of the member's
Shares if the Fund exercises its right to purchase such member's Shares on such terms and conditions as set forth in the Operating Agreement.
3.6. Additional Fiduciary and Entity Representations. If the person signing this Subscription Agreement is doing so on behalf of another person or entity who is the Subscriber, including, without
limitation, a corporation, a limited liability company, a partnership, an IRA, a Qualified Plan, or a trust (other than a Qualified Plan), such signatory, by signing his/her/its name in Section 7 of Page C-10, thereby represents and warrants
that:
(a) He or she is duly authorized to (i) execute and deliver this Subscription Agreement,
(ii) make the representations contained herein on behalf of the Subscriber and (iii) bind the Subscriber thereby; and
(b) This investment is an authorized investment for Subscriber under applicable documents and/or agreements (articles of incorporation or corporate by-laws or action, partnership agreement, trust
indenture, etc.) and applicable law.
3.7. Additional Representations Concerning Employees of Macquarie Group.
(a) Certain employees of the Macquarie Group who are involved in the business of the Fund, its Manager or the Dealer
Manager (Macquarie Capital (USA) Inc.), and the immediate family members and persons or personal companies controlled by any such Macquarie Group employees, and Macquarie Group companies and companies controlled by the Macquarie Group, are
prohibited from purchasing Shares.
(b) The following individuals are prohibited from purchasing our Shares:
(i) Members of the Manager's board of directors or investment committee;
(ii) Macquarie Group employees who are substantially involved in the day-to-day operations of the Fund or its Manager;
(iii) Macquarie Group employees who are assigned to the Dealer Manager and who are involved in the marketing
of our Shares;
(iv) Macquarie Group employees who exercise oversight of any individuals described in
(i) through (iii) above; and
(v) immediate family members and persons or personal companies
controlled by any such Macquarie Group employee contemplated in subsection (b)(i) through (b)(iv).
(c) If the
Subscriber is a Macquarie Group employee or an immediate family member or person or personal company controlled by a Macquarie Group employee, by signing this Subscription Agreement the Subscriber represents and warrants that he or she has
accurately identified himself or herself in Section 2(e) on Page C-8.
4.
Distributions.
In the event that distributions cannot be
directly deposited into the bank account(s) that you specify in Section 5 on Page C-9, distributions may, in the Manager's sole discretion, be paid by check mailed to the address provided in Section 2 on Page C-8.
5.
SUBSTITUTE FORM W-9: Under penalty of perjury, by signing his/her/its name in Section 7 on Page C-10, each Subscriber thereby certifies that:
5.1. The Taxpayer Identification Number or Social Security Number listed in Section 2(a) or 2(c) (if applicable)
on Page C-8 is correct;
C-7
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5.2. He/she/it is not subject to backup withholding either because the Internal Revenue
Service has (i) not notified such Subscriber that he/she/it is subject to backup withholding as a result of a failure to report all interest or distributions or (ii) has notified such Subscriber that he/she/it is no longer subject to
backup withholding. (If a subscriber has been notified that he/she/it is currently subject to backup withholding, strike the language under this Section 5.2 before signing); and
5.3. He/she/it is a U.S. person. (The definition of "U.S. person" includes U.S. citizens and U.S. resident aliens).
UPON THE SUBSCRIBER'S EXECUTION OF THIS SUBSCRIPTION AGREEMENT AND ACCEPTANCE THEREOF BY THE MANAGER, THIS SUBSCRIPTION AGREEMENT
(CONSISTING OF PAGES C-5 THROUGH C-13) WILL BECOME A PART OF THE OPERATING AGREEMENT.
C-8
Table of Contents
SUBSCRIPTION AGREEMENT
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
A Delaware Limited Liability
Company
SUBSCRIBER
INFORMATION
Phone: (888) 299
8699
1.
Subscription Amount
(check the applicable box and complete the adjacent blanks)
¨
Initial Investment
¨
Additional Investment
¨
Investor
In Macquarie Equipment Leasing Fund, LLC investing distributions from that fund into the DRP
For Initial and Additional Investments:
Dollar Amount of Shares:
$
Number of
Shares:
The minimum initial investment is $5,000. No minimum investment applies for the DRP.
2.
Registration
Information
(a)
Subscriber Information
Name(s):
Street Address:
(Street Address)
(City and State)
(Zip Code)
Telephone Numbers:
(Daytime)
(Evening)
Social Security or Tax I.D. No.(s):
Date of Birth:
(b)
Citizenship
Non-Residents are prohibited from purchasing Shares.
¨
U.S. Citizen with a resident address in the U.S.
¨
U.S. Resident Alien with a resident address in the U.S.
(c)
Trustee or Custodial Information (if applicable)
Trustee or Custodian's Name:
FBO
Tax I.D.:
Date Trust or Account Est:
Address:
(Street Address)
(City and State)
(Zip Code)
Name of Contact:
Phone No. of Contact:
(d)
Transfer on Death Beneficiary Information (OPTIONAL – For Individual or Joint Accounts Only)
Name(s):
Social Security or Tax I.D. No.(s):
(e)
Macquarie and Selling Dealer Employees
Check if:
¨
You are (i) employed by the
Macquarie Group, or (ii) an immediate family member or person or personal company controlled by a Macquarie Group employee, or (iii) a Macquarie Group company or a company controlled by the Macquarie Group.
Certain employees of the Macquarie Group, their immediate family members and persons or personal companies controlled by Macquarie
Group employees are prohibited from purchasing Shares. See Section 3.7 on Page C-6 for more information.
¨
You are (i) an employee of a
selling dealer, or any of its affiliates, who is participating in this offering, AND (ii) you are purchasing for your own account or your IRA or qualified plan.
3.
Form of Ownership
(check only one box)
¨
Individual Ownership
¨
Spouses as community property
¨
Joint Tenants with right of survivorship
¨
Tenants in Common
¨
Limited liability company*
¨
C corporation*
¨
S corporation*
¨
Partnership*
¨
IRA or Qualified Plan
¨
Trust*
¨
Custodial Account
¨
Profit Sharing Plan
¨
Other*:
*  Please provide, as is relevant, a copy of the resolution to purchase the shares, the corporation
by-laws, the partnership agreement, instrument creating the trust and/or the articles of organization.
C-9
Table of Contents
4.
Distribution Election &
DRP Election
Unless otherwise checked below, distributions made by the Fund will be directly deposited into the account specified in Section 5 on Page C-9. Check the applicable
box(es) below if you would instead like to:
¨
Receive distributions via check. If you choose this option, distributions will be sent to your address
listed in Section 2(a) (or in the case of Trustee or Custodial accounts, to the address listed in Section 2(c)).
¨
Have all or a portion of distributions made during the Offering Period reinvested pursuant to the
Distribution Reinvestment Plan.
If you choose this option, you must choose one of the following sub-options:
¨
100% of Cash Distributions on all Shares are to be reinvested pursuant to the Distribution Reinvestment
Plan. After the Offering Period, distributions made by the Fund will be
directly deposited into the bank account
specified in Section 5 below.
You must also complete section 5 below
.
¨
100% of Cash Distributions on all Shares are to be reinvested pursuant to the Distribution Reinvestment
Plan. After the Offering Period, distributions made by the Fund will be
made by check
sent to the address listed in Section 2.
¨
.0% of Cash Distributions on all Shares are to be reinvested pursuant to the
Distribution Reinvestment Plan. The remainder distributions, and all distributions made by the Fund after the Offering Period, will be
directly deposited into the bank account
specified in Section 5 below.
You must also complete section 5
below
.
¨
.0% of Cash Distributions on all Shares are to be reinvested pursuant to the
Distribution Reinvestment Plan. The remainder distributions, and all distributions made by the Fund after the Offering Period, will be
made by check
sent to the address listed in Section 2.
¨
Split distributions between two payees or make distributions to an alternative payee. If you choose this
option, you must complete the Special Payment Instruction Form on Page C-13.
¨
For Investors in Macquarie Equipment Leasing Fund, LLC ONLY:
Have all distributions from my
investment in Macquarie Equipment Leasing Fund, LLC reinvested pursuant to the Distribution Reinvestment Plan.
5.
Account
Information. All distributions made by the Fund will be paid by direct deposit into the following account, unless you have elected to receive
distributions by check in Section 4 above. Additionally, (a) any distributions during the Offering Period to be reinvested pursuant to the Distribution Reinvestment Plan as directed in Section 4 above, and (b) any split or alternative payees as
directed in the Special Payment Instruction Form on Page C-12, will not be paid by direct deposit into the following account.
You must complete this section unless you have either (a) elected to receive distributions via check in Section 4 above,
or (b) completed the Special Payment Instruction Form on Page C-13.
Payee Information
Institution Account Information
(Name of Payee)
(Name of Institution)
(Branch No.)
(Address of Payee)
(Street Address)
(City and State)
Zip Code
(Telephone No. of Payee)
(Name of Account)
(Social Security or Tax I.D. No.)
(Account No.)
(Account Type)
(Routing No.)
6.
Electronic Delivery
Do you consent to the electronic delivery to you of materials associated with this offering?
¨
Yes
¨
No
(E-mail Address (please print, and include domain extension (.com, .net, etc.)))
7.
Signatures and Initials
The undersigned confirms that he/she/it/or each of them:
(Initial(s)
) Has had the Prospectus for at least five (5) days.
(Initial(s)
) Acknowledges that an investment in the Shares is not liquid and
may not be liquid for 8 years or longer.
(Initial(s)
) Declares that, to the best of his/her/its knowledge, all
information in Sections 1 through 6 of Pages B-8 to B-9 is accurate and may be relied upon by the Manager.
(Initial(s)
) Is purchasing the Shares for his/her/its own
account.
(Initial(s)
) Has either (i) a minimum annual gross income of $70,000 and a
minimum net worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or (ii) a minimum net worth of $250,000 (calculated exclusive of home, home furnishings and automobiles)
AND
, if you reside in a state for which
more stringent suitability standards are required, as described in the Prospectus, you meet such applicable standards.
(Initial(s)
) Will inform the Fund of any change in residence.
(Initial(s)
) Acknowledges that investments in the Fund are not deposits with or other
liabilities of Macquarie Bank Limited ABN 46 008 583 542, or of any entity in the Macquarie Group and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie Bank Limited nor
any other member company of the Macquarie Group guarantees any particular rate of return or the performance of the Fund nor do they guarantee the repayment of capital from the Fund.
C-10
Table of Contents
The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup
withholding.
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
8.
Further Signatures – Power of Attorney
The undersigned confirms that he/she/it or each of them grant to the Manager a special power of attorney irrevocably making, constituting and appointing the
Manager, its duly appointed officers, and any one of them, as his/her/its attorney-in-fact, with power and authority to act alone in his/her/its name and on his/her/its behalf to the full extent, and for the purposes and duration, set forth in
Article 13 of the Limited Liability Company Operating Agreement (the "Operating Agreement"), all of the terms of which are hereby incorporated herein by this reference. Such purposes include, without limitation, the power to make, execute,
sign, acknowledge, affirm, deliver, record and file any (a) document or instrument that the Manager deems necessary or desirable to carry out fully the provisions of the Operating Agreement (in the manner and for the purposes provided in Section
13.1 of the Operating Agreement) and (b) amendment to the Operating Agreement and to the Certificate of Formation of Macquarie Equipment Leasing Fund Two, LLC (in the manner and for the purposes provided in Section 13.1 of the Operating Agreement,
including, without limitation, admission of members to Macquarie Equipment Leasing Fund Two, LLC and any application, certificate, instrument, affidavit or other document required or appropriate in connection with registration or documentation of
Macquarie Equipment Leasing Fund Two, LLC's investments).
The special power of attorney being granted is a special power of attorney coupled with an interest, is irrevocable, shall survive his/her/its death or legal
incapacity, and is limited to those matters set forth in Section 13.1 of the Operating Agreement.
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
9.
Selling Dealer Information
This subscription has been solicited by a:
¨
FINRA Licensed Registered Representative
¨
Registered Investment Advisor
The registered representative/registered investment advisor who solicited your subscription must sign below and by doing so represents that both he or she and/or the
Selling Dealer/Registered Investment Advisory Firm:
•     is, in the case of a registered representative, duly licensed by and in good
standing with FINRA or, in the case of a registered investment advisor, is a duly registered investment advisor under the Investment Advisers Act of 1940, and may lawfully offer the Shares in this offering in the State(s) listed in Section
2(a).
•     has reasonable grounds to believe, based on information obtained from you
concerning your investment objectives, other investments, financial situation and needs, and any other matters, that you (i) meet the minimum income and net worth standards established for the Fund; (ii) can reasonably benefit from the Fund based on
your overall investment objectives and portfolio structure; (iii) are able to bear the economic risk of the investment based on your overall financial situation; and (iv) have apparent understanding of: (1) the fundamental risk of the investment;
(2) the risk that the subscriber may lose the entire investment; (3) the lack of liquidity of the shares; (4) the restrictions on transferability of the shares; (5) the background and qualifications of our manager; and (6) the tax consequences of
the investment.
•     informed you of the risk of ownership and limited liquidity of the Shares and
has delivered a current copy of our Prospectus to you.
•     complied in all material respects with the terms of the Selling Dealer
Agreement.
¨
FINRA Licensed Registered Representatives ONLY
: Tick here if selling commissions are
waived.
(a)     Selling Dealer
(Name)
(Telephone No.)
(b)    Registered Representative
(Name)
(Rep. No.)
(Telephone No.)
(Street Address)
(City and State)
(Zip Code)
(c)     Signature
(Print Name)
(Authorized Signature – Branch Manager or Registered Principal)
C-11
Table of Contents
10.
Subscription
Checks, Mailing
Instructions and
Confirmations
Unless the subscriber is an IRA or Qualified Plan, mail your completed subscription package to:
Macquarie Equipment Leasing Fund Two, LLC
c/o ACS Securities Services, Inc.
3988 N. Central Expressway
Building 5, 6th Floor
Dallas, TX
75204
If the subscriber is an IRA or Qualified Plan, mail all the subscription documents to the designated custodian of the account.
Your subscription package should contain:
¨
Completed Subscription Agreement (required)
¨
Special Payment Instruction Form for Distributions (if applicable)
¨
Check or wire made payable as specified below (required)
Checks should be made payable to "Macquarie Equipment Leasing Fund Two, LLC," unless your Selling Dealer
informs you that the minimum offering escrow is in effect, in which case the checks should be payable to "Wells Fargo Bank as Escrow Agent for Macquarie Equipment Leasing Fund Two, LLC."
Wiring instructions are available upon request.
For any questions, please call (888) 299 8699.
Office Use Only
Admit Date:
Account Number:
Amount:
Number of Shares:
Account Number:
Wire /Check Number:
Blue Sky State:
Registered Rep. Number:
Firm Number:
Custodian ID Number:
Transfer Agent Reviewer
C-12
Table of Contents
SUBSCRIPTION AGREEMENT
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
A Delaware Limited Liability Company
SPECIAL PAYMENT INSTRUCTIONS
Use this Special Payments Instructions Form if you elected under Section 4 on Page C-9 to receive direct deposits of
distribution, split distributions between two payees, or to have distributions paid to an alternative payee. Note that all distributions to an IRA or Qualified Plan must be sent to the custodian. With the exception of IRA or Qualified Plans, you may
designate up to two accounts or payees for distributions. Original signatures of all joint investors or custodial authorizations are required. All percentages of distributions should equal 100%, including any allocation to the Distribution
Reinvestment Plan.
FIRST PAYEE
To Receive     % of Distributions
Payee Information
Bank Account Information
(Name of Payee)
(Name of Bank)
(Branch No.)
(Address of Payee)
(Street Address)
(City and State)
Zip Code
(Telephone No. of Payee)
(Name of Account)
(Social Security or Tax I.D. No.)
(Account No.)
(Account Type)
(Bank Routing No.)
SECOND PAYEE
To Receive     % of Distributions
Payee Information
Bank Account Information
(Name of Payee)
(Name of Bank)
(Branch No.)
(Address of Payee)
(Street Address)
(City and State)
Zip Code
(Telephone No. of Payee)
(Name of Account)
(Social Security or Tax I.D. No.)
(Account No.)
(Account Type)
(Bank Routing No.)
SIGNATURES
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
C-13
Table of Contents
APPENDIX D
ADDITIONAL INVESTMENT SUBSCRIPTION AGREEMENT
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
A Delaware Limited Liability Company
Phone: (888) 299 8699
This form may be used by any current Subscriber
(the "Subscriber") in Macquarie Equipment Leasing Fund Two, LLC (the "Fund"), who desires to purchase additional shares of the Fund's membership interests pursuant to this Additional Subscription Agreement and who purchased
their shares directly from the Fund. Subscribers who acquired shares other than through use of a Subscription Agreement (e.g., through a transfer of ownership or TOD) and who wish to make additional investments must complete the Macquarie Equipment
Leasing Fund Two, LLC Subscription Agreement.
Upon the Subscriber's execution of this Additional Investment Subscription Agreement
and acceptance thereof by the Manager, this Additional Investment Subscription Agreement will become part of the Subscriber's original Subscription Agreements.
1.
Subscription Amount
(complete the adjacent blanks)
Dollar Amount of Additional Shares to be Purchased:
$
Number of
Shares:
The minimum additional investment is $1,000.
2.
Registration
Information
(a)
Subscriber Information
Name(s):
Street Address:
(Street Address)
(City and State)
(Zip Code)
Telephone Numbers:
(Daytime)
(Evening)
Social Security or Tax I.D. No.(s):
Date of Birth:
(b)
Citizenship
Non-Residents are prohibited from purchasing Shares.
¨
U.S. Citizen with a resident address in the U.S.
¨
U.S. Resident Alien with a resident address in the U.S.
(c)
Trustee or Custodial Information (if applicable)
Trustee or Custodian's Name:
FBO
Tax I.D.:
Date Trust or Account Est:
Address:
(Street Address)
(City and State)
(Zip Code)
Name of Contact:
Phone No. of Contact:
(d)
Transfer on Death Beneficiary Information (OPTIONAL – For Individual or Joint Accounts Only)
Name(s):
Social Security or Tax I.D. No.(s):
D-1
Table of Contents
3.
Signatures and Initials
The undersigned confirms that he/she/it/or each of them:
(Initial(s)
) Has had the Prospectus for at least five (5) days.
(Initial(s)
) Acknowledges that an investment in the Shares is not liquid and
may not be liquid for 8 years or longer.
(Initial(s)
) Declares that, to the best of his/her/its knowledge, all
information in Sections 1 through 2 of Page D-1 is accurate, and all information contained in the original Subscription Agreement is accurate and current, and may be relied upon by the Manager.
(Initial(s)
) Is purchasing the Shares for his/her/its own
account.
(Initial(s)
) Has either (i) a minimum annual gross income of $70,000 and a
minimum net worth of $70,000 (calculated exclusive of home, home furnishings and automobiles); or (ii) a minimum net worth of $250,000 (calculated exclusive of home, home furnishings and automobiles)
AND
, if you reside in a state for which
more stringent suitability standards are required, as described in the Prospectus, you meet such applicable standards.
(Initial(s)
) Will inform the Fund of any change in residence.
(Initial(s)
) Acknowledges that investments in the Fund are not deposits with or other
liabilities of Macquarie Bank Limited ABN 46 008 583 542, or of any entity in the Macquarie Group and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie Bank Limited nor
any other member company of the Macquarie Group guarantees any particular rate of return or the performance of the Fund nor do they guarantee the repayment of capital from the Fund.
The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup
withholding.
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
X
X
Subscriber's Signature
Date
Authorized Signature
(Custodian/Trustee/Officer/Partner)
Date
4.
Selling Dealer Information
This subscription has been solicited by a:
¨
FINRA Licensed Registered Representative
¨
Registered Investment Advisor
The registered representative/registered investment advisor who solicited your subscription must sign below and by doing so represents that both he or she and/or the
Selling Dealer/Registered Investment Advisory Firm:
•     is, in the case of a registered representative, duly licensed by and in good
standing with FINRA or, in the case of a registered investment advisor, is a duly registered investment advisor under the Investment Advisers Act of 1940, and may lawfully offer the Shares in this offering in the State(s) listed in Section
2(a).
•     has reasonable grounds to believe, based on information obtained from you
concerning your investment objectives, other investments, financial situation and needs, and any other matters, that you (i) meet the minimum income and net worth standards established for the Fund; (ii) can reasonably benefit from the Fund based on
your overall investment objectives and portfolio structure; (iii) are able to bear the economic risk of the investment based on your overall financial situation; and (iv) have apparent understanding of: (1) the fundamental risk of the investment;
(2) the risk that the subscriber may lose the entire investment; (3) the lack of liquidity of the shares; (4) the restrictions on transferability of the shares; (5) the background and qualifications of our manager; and (6) the tax consequences of
the investment.
•     informed you of the risk of ownership and limited liquidity of the Shares and
has delivered a current copy of our Prospectus to you.
•     complied in all material respects with the terms of the Selling Dealer
Agreement.
¨
FINRA Licensed Registered Representatives ONLY
: Tick here if selling commissions are
waived.
(a)     Selling Dealer
(Name)
(Telephone No.)
(b)    Registered Representative
(Name)
(Rep. No.)
(Telephone No.)
(Street Address)
(City and State)
(Zip Code)
(c)     Signature
(Print Name)
(Authorized Signature –Branch Manager or Registered 
Principal)
D-2
Table of Contents
10.
Subscription Checks, Mailing Instructions and Confirmations
Unless the subscriber is an IRA or Qualified Plan, mail your completed subscription package to:
Macquarie Equipment Leasing Fund Two, LLC
c/o ACS Securities Services, Inc.
3988 N. Central Expressway
Building 5, 6th Floor
Dallas, TX
75204
If the subscriber is an IRA or Qualified Plan, mail all the subscription documents to the designated custodian of the account.
Your subscription package should contain:
¨
Completed Additional Investment Subscription Agreement (required)
¨
Check or wire made payable as specified below (required)
Checks should be made payable to "Macquarie Equipment Leasing Fund Two, LLC,." unless your Selling Dealer
informs you that the minimum offering escrow is in effect, in which case the checks should be payable to "Wells Fargo Bank as Escrow Agent for Macquarie Equipment Leasing Fund Two, LLC."
Wiring instructions are available upon request.
For any questions, please call (888) 299 8699.
Office Use Only
Admit Date:
Account Number:
Amount:
Number of Shares:
Account Number:
Wire /Check Number:
Blue Sky State:
Registered Rep. Number:
Firm Number:
Custodian ID Number:
Transfer Agent Reviewer
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APPENDIX E
MACQUARIE EQUIPMENT LEASING FUND TWO, LLC
DISTRIBUTION REINVESTMENT PLAN
The Macquarie Equipment Leasing Fund Two,
LLC Distribution Reinvestment Plan (the "DRP") provides eligible members with the opportunity to reinvest cash distributions payable to them in additional shares of membership interest in Macquarie Equipment Leasing Fund Two, LLC (the
"Fund"). The terms and conditions of the DRP are set forth below. Capitalized terms not defined herein shall have the meaning ascribed to them in the Fund's Limited Liability Company Operating Agreement.
1.
Effectiveness and Eligibility
.
The DRP shall become effective upon the receipt of the Minimum Offering by the Fund.
Investors who have subscribed for a minimum of 500 Shares in the Offering and who are admitted to the Fund ("Eligible Members") shall be eligible to participate in the DRP upon completion of the enrollment form in Section 4 on page
C-9 of the Subscription Agreement. Such investors are referred to herein as "Participants." The Manager has the right to prohibit qualified plan investors from participating in the DRP if such participation would cause the Fund's
assets to constitute "plan assets" under ERISA.
2.
DRP Shares
. The maximum number of Shares that may
be issued under the DRP is 1,555,556. Shares purchased under the DRP will be sold for $9.00 per Share. The Fund will not pay Selling Commissions or the Dealer Manager Fee with respect to the DRP Shares. There is no minimum purchase required under
the DRP, and the Fund may issue fractional Shares in its discretion. The Shares issuable under the DRP shall be uncertificated unless and until the Manager determines otherwise.
3.
Enrollment
.
An Eligible Member may elect to become a Participant at any time by completing and executing the enrollment
form in Section 4 on page C-9 of the Subscription Agreement or any other form provided by the Manager or Dealer Manager. In addition, eligible members of Macquarie Equipment Leasing Fund, LLC ("Other Fund Investors") who elect to
invest all, but not less than all, distributions they receive from that funds in our Shares pursuant to the DRP and who invested at least $5,000 in such other fund may participate in the DRP until the earlier of the termination of our offering or
the sale of all Shares available for purchase under our DRP, at which time, no new Other Fund Investors shall be allowed to participate in the DRP. The Manager has the right to prohibit qualified plan investors from participating in the DRP if such
participation would cause the Partnership's assets to constitute "plan assets." In addition to the foregoing eligibility requirements, potential Participants must also be eligible to participate in the DRP pursuant to applicable State
suitability requirements. Participation in the DRP will begin with the next Cash Distribution payable after receipt of a Participant's enrollment form. Shares will be purchased under the DRP within 30 days of the date that the Fund makes a
distribution, to the extent that Shares are available for purchase under the DRP.
4.
Distribution Reinvestment
.
The Fund will apply all or a portion of the Cash Distributions paid in respect of a Participant's Shares, as directed by the Participant in Section 4 on page C-9 of the Subscription Agreement, to the purchase of additional Shares for such
Participant, to the extent that Shares remain available for purchase under the DRP. Such Shares will be sold through the Selling Dealer or Dealer Manager from whom the Participant purchased Shares in the Offering.
5.
Withdrawal
.
A Participant may withdraw at any time by providing written notice to Macquarie Asset Management Inc.,
Investor Relations, 225 Franklin St, 17th Floor, Suite 1700 Boston MA 02110.
6.
Transfer
. Shares purchased
through the DRP will be subject to the same transfer restrictions as all other Shares issued by the Fund.
7.
Amendment
of the DRP
.
The Manager may amend the DRP for any reason; provided, however, that any amendment that adversely affects the rights or obligations of a Participant, as determined in the sole discretion of
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the Manager, shall only take effect upon 10 days' written notice to the Participants. No notice shall be given to Participants regarding any amendments to the DRP that are intended to cure,
correct or rectify any ambiguities, defective or inconsistent provisions, errors, mistakes or omissions.
8.
Termination
of the DRP
.
Unless earlier terminated in the Manager's sole discretion, the DRP shall terminate upon the earlier of the termination of the Offering Period and the issuance of 1,555,556 Shares under the DRP.
9.
Taxation of Distributions
.
The investment of Cash Distributions in the DRP does not relieve Participants of any taxes
that may be payable as a result of those Cash Distributions. Participants are urged to consult their personal tax advisor with regard to the tax consequences of participating in the DRP.
10.
Voting of DRP Shares
.
Participants shall be entitled to vote all Shares acquired by a Participant under the DRP.
11.
Interpretation
. Any issues of interpretation arising in connection with the DRP or its application shall be
conclusively determined by the Manager.
12.
Liability of the Manager
.
The Manager shall not be liable for any
act done in good faith, or for any good faith omission to act.
13.
Governing Law
. The DRP shall be governed by
and shall be construed in accordance with the laws of the State of Delaware, excluding any conflict of laws rule or principle that might refer the governance or the construction of the DRP to the law of another jurisdiction.
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No person is authorized to give any information or make any representation that is not contained in this
prospectus. You must not rely on any unauthorized representations or information. This prospectus is an offer to sell only the shares of limited liability company interest offered by this prospectus, and only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this prospectus is current only as of its date.
Macquarie Equipment Leasing Fund Two, LLC
Up to 21,555,556 Limited Liability Company Shares
MACQUARIE CAPITAL (USA) INC.
Dealer Manager
125 West 55th Street, 22nd Floor
New York, New York 10019
(866-965-7622)
(www.macquarie.com/mami)
No one has been authorized to give any information or make any representations other than those contained in this prospectus in connection with this
offering. If given or made, you should not rely on such information or representations as having been authorized by our manager. The delivery of this prospectus does not imply that its information is correct as of any time after its date. This
prospectus is not an offer to sell these securities in any state to any person where the offer and sale is not permitted. Until
[                    ], all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments of subscriptions.
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. Other Expenses of Issuance and
Distribution.
Assuming the offer and sale of the maximum offering of shares, estimated expenses in connection with the
issuance and distribution of the shares, other than the dealer manager fee, selling commissions and the O&O allowance, in the aggregate, are as follows:
Registration fee
$
[
]
Printing and engraving costs
$
[
]
Legal fees and expenses
$
[
]
Accounting fees
$
[
]
Blue Sky fees and expenses
$
[
]
FINRA fees and expenses
$
[
]
Travel, and accommodation expenses
$
[
]
Broker-Dealer due diligence reimbursements
$
[
]
Advertising and Investor sales literature production costs
$
[
]
Transfer Agent and Escrow Agent fees
$
[
]
Banking and Organization costs
$
[
]
Total
$
[
]
ITEM 14. Indemnification of Directors and Officers.
Section 107 of the Delaware Limited Liability Company Act empowers us to indemnify and hold harmless any member or manager or other
persons from and against all claims and demands whatsoever.
Under the Registrant's operating agreement, the Registrant
will indemnify the manager, its directors and officers and its affiliates other than the dealer manager out of its assets for any liability, loss, cost and expense suffered by it arising out of the acts or omissions of the manager or its affiliates
provided that:
•
the manager or its affiliate made a determination in good faith that the action or inaction was in the Registrant's best interests;
•
the manager or its affiliate was acting on behalf of or performing services for the Registrant; and
•
the course of conduct did not constitute negligence or misconduct on the manager's part or that of its affiliate.
In the opinion of the SEC, indemnifying an entity for liabilities arising under the Securities Act of 1933, as amended, is contrary to public policy and
therefore unenforceable. If the manager asserts a claim against the Registrant for indemnification for those liabilities, other than for expenses incurred in a successful defense, under the Registrant's operating agreement or otherwise, the
Registrant will submit to a court of competent jurisdiction the question of whether the indemnification is against public policy as expressed in the Securities Act.
In addition, the Registrant is not permitted to indemnify the manager or any of its affiliates, including the dealer manager, for any liability imposed by judgment, and costs associated therewith,
including attorneys' fees arising out of a violation of federal or state securities laws associated with the offer and sale of shares. The Registrant may indemnify the manager and any of its affiliates for any settlements and related expenses
of lawsuits alleging federal or state securities laws violations and for expenses incurred in successfully defending those lawsuits if the following have occurred:
•
a court approves the settlement and finds that indemnification of the settlement and related costs should be made or a court approves indemnification
of litigation costs if a successful defense is made; and
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•
the manager or its affiliate seeking indemnification has advised the court regarding the current position of the SEC and any applicable state
securities' administrator on the issue of indemnification for securities laws violations.
The Registrant will not have
to pay the cost of insurance that insures the manager or any affiliate for any liability for which the manager cannot be indemnified.
ITEM
15. Recent Sales of Unregistered Securities.
The Registrant has recently been formed but has not issued any securities
other than the manager's interest in the Registrant, for a capital contribution of $2,000. This sale occurred on January [    ], 2011 in reliance upon the exemption from registration contained in Section 4(2) of the
Securities Act of 1933, as amended. This sale was for the purpose of organizing the Registrant as a limited liability company and for investment purposes and not with a view to the distribution of such securities.
ITEM 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
Exhibit
Number
Exhibit
1.1
Form of Dealer Manager Agreement
1.2
Form of Selling Dealer Agreement
1.3
Certificate of Formation
3.1
Limited Liability Company Operating Agreement (incorporated by reference to Appendix A to prospectus)
5.1
Opinion regarding legality*
8.1
Opinion regarding tax matters*
10.1
23.1.1
Consent of PricewaterhouseCoopers LLP – Macquarie Equipment Leasing Fund Two, LLC
23.2.1
Consent of PricewaterhouseCoopers LLP – Macquarie Asset Management Inc.
23.3
Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, a Professional Corporation (included in Exhibit 5.1 to this Registration Statement)*
23.4
Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, a Professional Corporation (included in Exhibit 8.1 to this Registration Statement)*
24.1
Powers of Attorney are set forth in Part II of the Registration Statement on Form S-1
*
To be filed by Amendment
(b)
Financial Statements included in the prospectus
.
Macquarie Equipment Leasing Fund Two, LLC
See Index to Financial Statements at page F-1 of the prospectus included in Part I of this Registration Statement
Macquarie Asset Management Inc.
See Index to Financial Statements at page F-1 of the prospectus included in Part I of this Registration Statement
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ITEM 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file,
during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or its most recent post-effective amendment) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the registration statement.
(2) That, for
the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by
means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C (§ 230.430C of this chapter), each prospectus filed
pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§ 230.430A of this chapter), shall be
deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however
, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first
use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the
securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating
to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and
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(iv) Any other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(c) The undersigned registrant further undertakes to file a sticker
supplement pursuant to Rule 424(c) under the Securities Act of 1933 describing each finance or lease transaction not described in the prospectus or a prior supplement to the registration statement promptly after there arises a reasonable probability
that such transaction will be acquired if the transaction would require a commitment by the registrant of an amount of offering proceeds in excess of 10 percent of the offering proceeds received as of that date by the registrant.
(d) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements
certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(e) The registrant undertakes to send to each member at least on an annual basis a detailed statement of any transactions with the manager or its affiliates, and of fees, commissions, compensation and
other benefits paid, or accrued to the manager or its affiliates for the fiscal year completed, showing the amount paid or accrued to each recipient and the services performed.
(f) The registrant undertakes to provide to the members the financial statements required by Form 10-K for the first full fiscal year of
operations of the registrant.
(g) The registrant undertakes to file a sticker supplement pursuant to Rule 424(c) under the
Securities Act during the distribution period describing each lease transaction not identified in the prospectus at such time as there arises a reasonable probability that such property will be acquired and to consolidate all such stickers into a
post-effective amendment filed at least once every three months, with the information contained in such amendment provided simultaneously to the existing members. Each sticker supplement should disclose all compensation and fees received by the
Manager and its affiliates in connection with any such acquisition. The post-effective amendment shall include audited financial statements meeting the requirements of Rule 3-14 of Regulation S-X only for properties acquired during the distribution
period. The registrant also undertakes to file, after the end of the distribution period, a current report on Form 8-K containing the financial statements and any additional information required by Rule 3-14 of the Regulation S-X, to reflect each
commitment (i.e., the signing of a binding purchase agreement) made after the end of the distribution period involving the use of 10% or more (on a cumulative basis) of the net proceeds of the offering and to provide the information contained in
such report to the members at least once each quarter after the distribution period of the offering has ended.
(h) The
registrant undertakes to file, after the end of the offering period, a current report on Form 8-K containing the financial statements and any additional information required by Rule 3-14 of Regulation S-X, to reflect each commitment made after the
end of the offering period involving the use of 10% or more (on a cumulative basis) of the net proceeds of the offering and to provide the information contained in such report to the members at least once each quarter after the offering period has
ended.
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TABLE VI
ACQUISITION OF PORTFOLIO INVESTMENTS BY PRIOR PROGRAMS
September 30,
2010
(Unaudited)
The following is a summary of investments made by Macquarie Equipment Leasing Fund, LLC ("Fund One") as at September 30, 2010. As at that date, Fund One had not completed its offering or
entered its operating phase:
Client Type
Equipment Type
Location
Date
Purchased
Total
Financing
Cash
Expensed
Other
Capitalized
Costs
Total
Acquisition
Cost
Commercial airline
Commercial Jet
Aircraft Engines
Australia
March 24,
2010
$0
$195,000
$0
$6,500,000
Investors in the
Fund should not expect results comparable to those of Fund One. Prior performance is not indicative of future performance.
TABLE VI
ACQUISITION OF PORTFOLIO INVESTMENTS BY PRIOR PROGRAMS
December 31, 2010
(Audited)
The following is a summary of investments made by Macquarie Equipment Leasing Fund, LLC ("Fund One") as at December 31,
2010. As at that date, Fund One had not completed its offering or entered its operating phase:
Client Type
Equipment Type
Location
Date
Purchased
Total
Financing
Cash
Expensed
Other
Capitalized
Costs
Total
Acquisition
Cost
Commercial airline
Commercial
Jet Aircraft
Engines
Australia
March
2010
$0
$195,000
$0
$6,500,000
Retailer
Customer
Self-Serve
Kiosks
United States
October
2010
$0
$0
$61,088
$2,097,353
Senior housing provider
Furniture and
Miscellaneous
United States
November
2010
$0
$6,764
$20,293
$703,480
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, State of Massachusetts, on the 17
th
day of March, 2011.
Macquarie Equipment Leasing Fund Two, LLC
By:
Macquarie Asset Management Inc.
Its Manager
By:
/s/ David Fahy
David Fahy
President
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature
Capacity
Date
/s/ David Fahy
David Fahy
Director and President
Principal Executive Officer
March 17, 2011
/s/ Duncan Edghill
Duncan Edghill
Director and Vice President
March 17, 2011
/s/ Frank V. Saracino
Frank V. Saracino
Principal Financial Officer, Principal Accounting Officer
March 17, 2011
/s/ James A. Pitts
James A. Pitts
Independent Director
March 17, 2011
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INDEX TO EXHIBITS
Exhibit
Number
Exhibit
1.1
Form of Dealer Manager Agreement
1.2
Form of Selling Dealer Agreement
1.3
Certificate of Formation
3.1
Limited Liability Company Operating Agreement (incorporated by reference to Appendix A to prospectus)
5.1
Opinion regarding legality*
8.1
Opinion regarding tax matters*
10.1
Form of Escrow Agreement
23.1.1
Consent of PricewaterhouseCoopers LLP – Macquarie Equipment Leasing Fund Two, LLC
23.2.1
Consent of PricewaterhouseCoopers LLP – Macquarie Asset Management Inc.
23.3
Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, a Professional Corporation (included in Exhibit 5.1 to this Registration Statement)*
23.4
Consent of Baker, Donelson, Bearman, Caldwell & Berkowitz, a Professional Corporation (included in Exhibit 8.1 to this Registration Statement)*
24.1
Powers of Attorney are set forth in Part II of the Registration Statement on Form S-1
*
To be filed by Amendment
II-7