To our valued clients, partners, and friends,

We imagine you are curious - and maybe a little concerned - as to how the issues regarding "kickbacks" and "bid rigging" impacts your company, your insurance program, and your relationship with Equity Risk Partners. We want to take this opportunity to let you know our thoughts on the issues.

The legendary basketball coach, John Wooden, was known to send a ball boy into the lobby of the gym to determine who UCLA's opponent was that night, so focused was he on preparing his team and his game plan. Equity Risk Partners operates with the same philosophy. We do not focus on what other brokers are doing. We do not pay attention to their marketing ploys, sales techniques, or insurance company interaction. We focus solely on providing value added risk management services to private equity firms and their portfolio companies. We became the fastest growing insurance broker over the past three years by doing one thing - putting the best interests of our clients first. Not shareholders. Not industry analysts. Not quarterly profits. Not insurance companies. Our clients first - always.

So, let's address the primary issue. We do not need to hedge our statements with disclaimers like "to the best of our knowledge." Equity Risk Partners has not, does not, and will not engage in the activity described in the press as "bid rigging".

Every person in our firm has signed a declaration stating that they have never engaged in the practice of "bid rigging" or any other non-competitive process as an employee of Equity Risk Partners.

Every employee of Equity Risk Partners has signed a copy of our Code of Conduct, which includes the commitment to put clients first - always.

A copy of the declaration, Code of Conduct, and our Insider Trading Policy are posted on our website.

We think the real issue is, "How should a broker treat its clients?" It's pretty simple. We should behave as you would want us to behave if you know everything that we know. Better yet, we should act like our mothers are watching. It's not that difficult.

There is some debate as to whether a broker owes a fiduciary duty to its clients. In our mind, there is no question. We believe we are your partner and that is how we act. We cannot imagine a higher standard. You trust us and every day we should act in a manner that justifies that trust.

Now, let's talk about "kickbacks" or "contingency commissions." Contingencies in and of themselves are not wrong, unethical, or illegal. But, as my dad used to say about Wall Street, "Bulls and Bears make money. Hogs get slaughtered". The problem with contingencies is that the overwhelming majority of brokers have come to depend on them and they let the contingency influence their behavior.

Do contingency payments affect our behavior? Absolutely not. Contingency payments are based on several factors. Volume of business is one of many. How foolish would it be to risk a client's trust and their long term business relationship for an extra 0.54%, that is not guaranteed, and that is subject to insurer profitability, loss ratio, renewal retention, and other factors? Pretty foolish.

A few weeks ago, we followed these principles during the renewal of Fleischmann's Vinegar Company, Inc. Dan Muth, CEO of Fleischmann's says it best. "We trusted Equity Risk Partners to look out for our best interest. We could not have been more pleased. Despite our program being placed with an insurer where ERP had a contingency arrangement, they actively sought competing quotes. When they found a potentially better deal from another carrier, they followed through and delivered."

We reduced Fleischmann's premium by 9%, despite an overall increase in their exposures. And, yes, we recommended a different insurer - the one that submitted the best program.

But, actions speak louder than words. We have nothing to hide.

• Equity Risk Partners discloses its commissions on every renewal and new business proposal for every client and prospect.
• Equity Risk Partners discloses each insurer where a contingency agreement exists on every renewal and new business proposal for every client and prospect.
• Each employee of Equity Risk Partners associated with a particular renewal or new business proposal certifies to acting solely in the best interests of the client in preparing, submitting, negotiating, and presenting the insurance company quotes.

I would be pleased to discuss your questions or concerns and our firm and its values at any time. Please do not hesitate to contact me.

Thank you for your continued consideration and support.

Very truly yours,