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About the Breakwater Structured Growth Opportunities Fund

Breakwater Structured Growth Opportunities Fund, LP is a $100 million open-ended private investment partnership organized in August 2008 under Delaware law. The Fund’s investment objective is to generate both current income and capital appreciation through secured debt investments accompanied with equity participation rights, primarily in growth-oriented companies across a variety of industries.

The Fund targets highly promising growth companies orphaned by the capital markets that have limited alternatives to fuel their operational growth plans. The Fund typically will invest $1 million to $5 million in each of its principal transactions. In addition to principal capital commitments, Breakwater will provide strategic advisory and operational experience to support these growth companies in building world-class enterprises.

Investment Criteria

The Fund will invest in private and public companies in the small to lower-middle capital markets that meet the following attributes:

• Annual revenues of $5 million to $100 million

• Cash-flow positive, with at least 3 years of historical operating performance

• Experienced management team with an excellent track record of building companies

• Proven business model with exceptional long-term growth prospects

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Industry Focus

The Fund has a generalist investment approach, but the following industry categories highlight prominent sectors of interest:

• Healthcare / Medical Device

• Consumer Products / Specialty Retail

• Information Technology / Telecom

• Business and Financial Services

• Energy / Alternative Energy

• Industrial / Manufacturing

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Transaction Types

The Fund seeks investment opportunities that serve the long-term growth and liquidity objectives for the respective companies. The Fund expects its flexible investment approach to provide capital in a variety of opportunistic financings:

• Growth Capital
  Capital support for business plan and expansion initiatives

• Recapitalizations
  Improvement of capital structure, preservation of cash flow

• Acquisition Financing
  Capital support for contingent merger or acquisition event

• Bridge Financing
  Short-term working capital to a foreseeable recapitalization event

• Liquidity-based
  Provides partial liquidity event for owners, while maintaining a significant equity stake in the business

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Transaction Terms

The general parameters for a typical investment by the Fund include:

Investment Size:	$1 million to $5 million
Security Type:	Senior Secured and Senior Subordinated
Interest Rate:	12% to 18% per annum; fixed rate; payable monthly/quarterly, may include PIK
Maturity:	1 to 3 years
Amortization:	None (100% of principal due at maturity) to 5-year fixed-line amortization
Equity Features:	Warrant or option to purchase 5% to 20% minority interest in common and/or preferred stock

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