January 1, 2004

I. PURPOSE

The purposes of this Statement of Policy (the "Policy") is to ensure that all employees and others affiliated with Equity Risk Partners, Inc. (the "Company") are informed of their legal and ethical obligations with respect to the possession and use of material nonpublic information about any company with which the Company does business. Compliance with the Policy is required not only to maintain strict adherence to legal standards, but also to uphold the Company's reputation for integrity and ethical conduct and to avoid even the appearance of impropriety.

II. THE LAW AND CONFIDENTIALITY OF INSIDE INFORMATION.

Insider trading is the buying or selling of a security based upon access to confidential or proprietary information which is not available to the general public. An insider is one who is restricted from some kind of trading in the Company's stock because he or she has access to privileged or confidential information. Anyone who comes into possession of material nonpublic information concerning a publicly traded company must safeguard the information and not intentionally or inadvertently communicate it to any person (including family members and friends) unless the person has a need to know that information for legitimate reasons related to the Company's business. Any person who improperly reveals material nonpublic information to another person can be held liable under the anti-fraud provisions of the securities laws (primarily Section 10(b) of the Securities Exchange Act of 1934 (the "1934 Act") and Rule 10(b)-5) for the trading activities of his or her "tippee" and any other person with whom the "tippee" shares the information.

Consistent with the foregoing, inside information should be communicated discretely. Such information should not be discussed in public places where it can be overheard, such as elevators, restaurants, taxis or airplanes, such information should be divulged only to persons having a need to know the information in order to carry out their job responsibilities. To avoid even the appearance of impropriety, advice should not be provided or recommendations made regarding the purchase or sale of any securities of any companies with whom the Company has or does business. The anti-fraud provisions of the federal securities laws generally prohibit persons who have a duty not to disclose material nonpublic information from trading securities on the basis of such information. In addition, the anti-fraud provisions prohibit fraudulent, manipulative, or deceptive trading practices. Persons who violate these prohibitions are subject to potential civil damages and criminal penalties. The civil damages can consist of disgorgement of any illicit profits and a fine of up to three times the profit gain or loss avoided. The criminal penalties can be as much as $1,000,000 and 10 years imprisonment per violation.

 

III. MATERIALITY.

Information regarding a publicly traded company is deemed material if it would be considered important by a reasonable investor in deciding whether to buy, sell, or refrain from any activity regarding that company's securities. Further, such information would be material if it were likely to have a significant impact on the market price of that company's securities. By way of example, it is probable that the following information, in most circumstances, would be deemed material:

• Annual or quarterly financial results.
• A significant change in earnings or earnings projections.
• Unusual gains or losses in major operations.
• Negotiations and agreements regarding significant acquisitions, divestitures or business combinations.
• A significant increase or decrease in dividends on the company's stock.
• A major management change.

The materiality of particular information is subject to reassessment on a regular basis. For example, the information may become stale because of the passage of time, or subsequent events may supersede it. However, so long as the information remains material and nonpublic it must be maintained in strict confidence and not used for trading purposes.

IV. POTENTIAL LIABILITY OF THE COMPANY FOR INSIDER TRADING BY COMPANY

PERSONNEL.

The Company may be subject to Section 21A(b) of the 1934 Act. This section provides the Securities and Exchange Commission (the "SEC") with authority to bring a civil action against any "controlling person who knows of, or recklessly disregards, a likely insider trading violation by a person under his control and fails to take appropriate steps to prevent the violation from occurring." A successful action by the SEC under this provision can result in a civil fine equal to the greater of $1,000,000, or three times the profit gained or loss avoided.

The Company, its board of directors, its officers and key personnel could be deemed controlling persons subject to potential under Section 21A(b). Accordingly, it is incumbent on such persons to maintain an awareness of possible insider trading violations by persons under their control and to take measures where appropriate to prevent such violations. In the event such persons become aware of the possibility of such a violation, the Company's legal counsel should be contacted immediately.

V. RESTRICTIONS ON TRADING IN SPECIFIED COMPANIES.

The Company's policy is that, if any board member, officer, employee or consultant ("Restricted Persons") obtains material nonpublic information relating to any publicly traded company, that person may not buy or sell securities of that company or engage in any other action to take advantage of or pass on to others, that information.

Due to the possibility that a Restricted Person will be receiving material nonpublic information regarding companies with whom the Company is or will be doing business, the Company will publish from time to time a Restricted Company List (the "Restricted Company List"). Given the far reaching liability and severe penalties such persons and the Company would face as a result of insider trading violations, trading in the stocks, bonds and other securities of publicly traded companies on the Restricted Company List would be specifically restricted as follows:

Trading in the stocks, bonds or other securities of a company on the Restricted Company List may only be conducted during the time period between 48 hours and 20 days following the release of the Company's quarterly and annual reports and only after the trade is pre-cleared by the Company's Chief Executive Officer. Trading during any other time period is strictly prohibited. Confining trading in these securities to this "window period" will help ensure that trading is not based on material information that is not available to the public. The additional requirement of pre-clearance will allow the prevention of a trade if there has been a material development regarding the Company which has not been made public but knowledge of which could be imputed to the Company or to the Company's employee or representative proposing the trade.

Observation of these restrictions will be necessary to ensure that insider trading law violations do not occur.

VI. CONCLUSION.

You are responsible for ensuring that you do not violate federal or state securities laws or the Policy. The Company designed this Policy to promote compliance with the federal securities laws and to protect the Company and you from the serious liabilities and penalties that can result from violations of these laws. If you violate the policy, the Company may take disciplinary action against you, including dismissal for cause. If you have any questions about this Policy or the application of the Policy to your particular case, you should seek additional guidance from the Chief Executive Officer.

VII. CERTIFICATION.

I have received the Statement of Policy for Insider Trading of Equity Risk Partners, Inc. I certify that I have read the Policy, understand it, and will abide by its terms.