As filed with the Securities and Exchange Commission on December 20, 2011

Registration No. 333-__________

 

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



 

Form S-1
Registration Statement
Under
The Securities Act of 1933



 

ATEL GROWTH CAPITAL FUND 8, LLC

(Exact name of registrant as specified in governing instruments)



 

   
California   7359   45-1625956
(State or other jurisdiction of organization)   (Primary standard industrial
classification code number)
  (IRS Employer
Identification number)


 

600 California Street, 6th Floor
San Francisco, California 94108
(415) 989-8800

(Address, including zip code, and telephone number, including area code, of principal executive offices)



 

DEAN L. CASH
600 California Street, 6th Floor
San Francisco, California 94108
(415) 989-8800

(Name, address, including zip code, and telephone number, including area code, of agent for service)



 

With a copy to:
PAUL J. DERENTHAL, ESQ.
Derenthal & Dannhauser LLP
1999 Harrison Street, 26th Floor
Oakland, California 94612
(510) 350-3070



 

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. x

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. o

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 number of the earlier effective registration statement for the same offering. o

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. If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

o Large accelerated filer
o Accelerated filer
o Non-accelerated filer (Do not check if a smaller reporting company)
x Smaller reporting company

       
Title of Each Class of Securities to Be Registered   Amount to Be Registered   Proposed Maximum Offering Price Per Unit   Proposed Maximum Aggregate Offering Price(1)   Amount of Registration Fee
Units of Limited Liability Company Interest     7,500,000     $ 10.00     $ 75,000,000     $ 8,595.00  
(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as amended.


 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 
 

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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 is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Preliminary Prospectus dated December 20, 2011 — Subject to Completion

ATEL GROWTH CAPITAL FUND 8, LLC

Limited Liability Company Units — $10 Per Unit
Minimum Offering — 120,000 Units ($1,200,000)
Maximum Offering — 7,500,000 Units ($75,000,000)

ATEL GROWTH CAPITAL FUND 8, LLC, or the “Fund,” will provide acquisition financing of equipment and other capital assets for emerging growth companies financed by venture capital and established privately held companies without publicly traded securities. These investments will primarily be structured as debt and debt-like financings (such as loans and leases) that are collateralized by equipment and other capital assets. The Fund will also provide other financing to, and acquire equity interests and warrants and rights to purchase equity interests (the “Equity Interests”) in, these companies. AGC 8 Managing Member, LLC is the Fund’s Manager. The Fund’s objective will be to distribute to investors the net revenues from its investments after it pays its expenses and fees. The Fund intends to use approximately 87% of the capital it raises from the sale of Units to make its portfolio investments. At least an additional one-half of one percent of its initial capital will be held as capital reserves. Of the remaining capital, 9% will be used to pay selling commissions, 1% will be used to pay underwriters expenses constituting additional selling compensation, and up to 2.5% will be used to pay other offering and organization expenses.

A PURCHASE OF UNITS INVOLVES SIGNIFICANT RISKS. See “Risk Factors” on page 9. Risks include:

The Fund will primarily provide financing for privately held venture capital financed companies many of which may not have yet achieved profitability, and such investments are expected to involve greater risks of customer default than investments involving companies with proven records of profitability and more established credit histories;
Most of the Fund’s distributions will be, and most of the prior ATEL programs’ distributions have been, a return of capital and not a return on capital;
Uncertainties in the finance industry, including economic recession and changes in general economic conditions, fluctuations in demand for its financing transactions, and interest rates may result, and in certain past ATEL programs have resulted, in delays in investment and reinvestment, delays in and disposition of assets, and reduced returns on invested capital;
The Fund’s performance is subject to risks relating to defaults by its customers;
No market exists for the Units or is expected to develop, the Fund’s Operating Agreement includes significant restrictions on the transferability of Units, and an investor may be unable to sell his Units or able to sell the Units only at a significant discount;
Initially, the Fund may be considered a “blind pool” because it is a newly formed entity with no prior operating history, and, except as may be set forth in a supplement to this Prospectus, the Fund has not specified any of its investments or customers, so that investors cannot evaluate the risks or potential returns from such investments;
Investors must rely on the Manager to manage the Fund and investors will have limited voting rights under the Fund’s Operating Agreement;
The Fund will pay the Manager and its affiliated companies substantial fees;
The Manager will be subject to certain conflicts of interest;
If the Fund receives only the minimum capital, it will be more difficult to diversify its investment portfolio and any single investment transaction will have a greater impact on its potential profits; and
The Fund does not guarantee its distributions or the return of investors’ capital.

The Fund is offering a total of 7,500,000 of its Units of limited liability company interest for a price of $10 per Unit. An investor must purchase a minimum of 500 Units. The Fund will deposit initial subscriptions in a bank escrow account and no Units will be sold unless a minimum of $1,200,000 in cash is received by , 2012 (a date one year from the date of this Prospectus). If the minimum funding is achieved, the offering will continue until the earlier of sale of all 7,500,000 Units or , 2014 (a date two years from the date of this Prospectus), unless it is terminated earlier in the Manager’s discretion. Upon the earlier of termination of the offering or satisfaction of the escrow condition, any interest which accrues on funds held in escrow will be allocated and distributed to subscribers on the basis of the respective amounts of the subscriptions and the number of days that such amounts were held in the escrow account. Rejected subscriptions will be returned without interest or reduction within 30 days of receipt. The offering will be made by unaffiliated broker dealers in a selling group managed by ATEL Securities Corporation, a broker dealer affiliated with the Manager, acting as Dealer Manager. The brokers selling the Units are not required to sell any specific number of Units, but will use their best efforts to sell Units.

     
  Price to
Public
  Selling Commissions   Proceeds to Fund
Per Unit   $ 10     $ 0.90     $ 9.10  
Total Minimum   $ 1,200,000     $ 108,000     $ 1,092,000  
Total Maximum   $ 75,000,000     $ 6,750,000     $ 68,250,000  

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities nor has any state securities commission passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

THE DATE OF THIS PROSPECTUS IS , 2012


 
 

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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.

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WHO SHOULD INVEST     1  
SUMMARY OF THE OFFERING     3  
The Fund     3  
Management     3  
Risk Factors     3  
Who Should Invest     4  
Use of Capital     5  
ATEL’s Fees     5  
Organizational Diagram     5  
Investment Portfolio     6  
Borrowing Policies     6  
Income, Losses and Distributions     6  
Income Tax Consequences     7  
Summary of the Operating Agreement     7  
Plan of Distribution     8  
Glossary     8  
RISK FACTORS     9  
The Fund will primarily provide financing for companies which do not have substantial
operating histories or records of profitability, so will be subject to a greater risk of loss from customer defaults than if its customers were of higher credit quality.
    9  
Companies Engaged in Development of Technologies and Other Growth Industry Businesses Face More Uncertainty in Their Ability to Achieve Profitability.     9  
Emerging Growth Companies May Experience Difficulty In Obtaining the Capital Necessary to Reach Profitability, Which May Limit the Number and Types of Investments Available To The Fund and Also May Create Greater Risk Of Default On These Customers Obligations To the Fund.     9  
Most of the Fund’s distributions are expected to be a return of capital     10  
The success of the Fund will be subject to risks inherent in the financing business that may adversely affect the ability of the Fund to acquire Portfolio Assets on terms which will permit it to generate profitable rates of return for investors      10  
The Fund may be harmed if a customer defaults and the Fund is unable to collect the revenue anticipated from the defaulted investment     10  
There are significant limitations on the transferability of Units and investors should consider the purchase of Units only as a long-term investment.     10  
Initially, the Fund may be considered a “blind pool” because it is a newly formed entity with no prior operating history, and, except as may be set forth in a Supplement to this Prospectus, the Fund has not identified any of its investments or customers     10  
Investors will have limited voting rights and must rely on management for the success of the Fund     11  
The Manager will receive substantial compensation which may result in conflicts of interest     11  
The Fund does not guarantee its distributions or the return of investors’ capital     11  

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The Fund may enter into financing transactions outside of the United States and foreign financing transactions may involve greater difficulty in enforcing transaction terms and a less predictable legal system     11  
If investment terms involve payments in foreign currency, the Fund will be subject to the risk of currency exchange rate fluctuations, which could reduce the Fund’s overall profit on an investment     11  
The financing industry is highly competitive and competitive forces could adversely affect the interest rates and rates of return the Fund may realize on its financing investment portfolio and the prices the Fund has to pay to acquire its investments     11  
Lending activities involve a risk that a court could deem the Fund’s financing rates usurious and therefore unenforceable      11  
The Fund will be subject to the risk of claims asserting theories of “lender liability” resulting in Fund liability for damages incurred by borrowers     12  
The Manager is subject to certain potential conflicts of interest that could result in the Manager acting in its interest rather than that of the Fund     12  
The amount of capital actually raised by the Fund may determine its diversification and profitability     12  
Investors will not be able to withdraw their funds from the escrow account pending the satisfaction of the Fund’s minimum offering amount, and may therefor not have use of their invested capital for an extended period of time      12  
Investment by the Fund in joint ownership of investments may involve risks in coordinating its interests with those of its joint venture partner     12  
Risks Relating to Tax Matters      13  
If the IRS classifies the Fund as a corporation rather than a partnership, investor distributions would be reduced under current tax law     13  
The IRS may allocate more taxable income to investors than the Operating Agreement provides     13  
This investment may cause investors to pay additional taxes and file additional tax returns      13  
Retirement Plan Risks     13  
An investment in Units by a retirement plan must meet the fiduciary and other standards under ERISA or the Internal Revenue Code or the investment could be subject to penalties      13  
ESTIMATED USE OF PROCEEDS     15  
MANAGEMENT COMPENSATION      17  
Summary Table      17  
Narrative Description of Compensation      18  
Limitations on Fees     19  
Defined Terms Used in Description of Compensation     20  
Affiliates of the Manager     21  
INVESTMENT OBJECTIVES AND POLICIES     22  
Principal Investment Objectives      22  
Growth Capital Financing     22  
General Policies     23  
Finance Portfolio Transaction Structures     24  

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Types of Equipment      25  
The Equity Interests     26  
Borrowing Policies     27  
Description of Customers     27  
Competition     27  
Joint Venture Investments     28  
General Restrictions     28  
Changes in Investment Objectives and Policies     29  
CONFLICTS OF INTEREST     30  
FIDUCIARY DUTY OF THE MANAGER     32  
MANAGEMENT     33  
The Manager     33  
Management of the Fund’s Operations and Administration     35  
Management Compensation     35  
Changes in Management     35  
The Dealer Manager     36  
PRIOR PERFORMANCE SUMMARY     37  
INCOME, LOSSES AND DISTRIBUTIONS     41  
Allocations of Net Income and Net Loss     41  
Timing and Method of Distributions     41  
Allocations of Distributions     41  
Reinvestment     42  
Return of Unused Capital     43  
Cash from Capital Reserve Account     43  
Sources of Distributions — Accounting Matters     44  
CAPITALIZATION     45  
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION     45  
FEDERAL INCOME TAX CONSEQUENCES     46  
Opinions of Derenthal & Dannhauser LLP     46  
Classification as a Partnership     46  
Allocations of Profits and Losses     47  
Income Recognition     48  
Taxation of Investors     49  
Tax Treatment of Lending Activities     49  
Limitation on Deduction of Losses; Classification of Income as Portfolio     49  
Tax Basis     49  

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At Risk Rules     50  
Passive Activity Losses; Portfolio Income     50  
Tax Consequences Respecting Equity Interests     50  
Deductibility of Management Fees     51  
Disposition of Units     51  
Liquidation of the Fund     51  
Fund Elections     51  
Treatment of Gifts of Units     52  
Investment by Qualified Retirement Plans and IRAs     52  
Fund Tax Returns and Tax Information     53  
Audit of Tax Returns     53  
Tax Shelters and Reportable Transactions     54  
Penalties and Interest     54  
Miscellaneous Fund Tax Aspects     55  
U.S. Taxation of Foreign Persons     56  
Future Federal Income Tax Changes     56  
State and Local Taxes     56  
Need for Independent Advice     57  
ERISA CONSIDERATIONS     57  
Prohibited Transactions Under ERISA and the Code     57  
Plan Assets     57  
Other ERISA Considerations     58  
SUMMARY OF THE OPERATING AGREEMENT     59  
The Duties of the Manager     59  
Liability of Holders     59  
Term and Dissolution     60  
Voting Rights of Members     60  
Dissenters’ Rights and Limitations on Mergers and Roll-Ups     61  
Meetings     61  
Books of Account and Records     62  
Status of Units     62  
Transferability of Units     62  
Repurchase of Units     64  
Indemnification of the Manager     65  
PLAN OF DISTRIBUTION     65  
Distribution     65  
Selling Compensation and Certain Expenses     66  
Escrow Arrangements     67  
Investments by Certain Persons     68  
State Requirements     68  

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REPORTS TO HOLDERS     68  
SUPPLEMENTAL SALES MATERIAL     70  
LEGAL OPINIONS     70  
EXPERTS     70  
FORWARD-LOOKING STATEMENTS     71  
ADDITIONAL INFORMATION     71  
GLOSSARY     71  
FINANCIAL STATEMENTS     F-1  
Exhibit A — Prior Performance Information     A-1  
Exhibit B — Limited Liability Company Operating Agreement     B-1  
Exhibit C — Subscription Instructions and Documents     C-1  

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WHO SHOULD INVEST

The Units represent a long-term investment, the primary benefit of which is expected to be cash distributions. A purchase of Units is suitable only for persons who meet the financial suitability standards described below and who have no need for liquidity from this investment. In order to subscribe for Units, each investor must execute a Subscription Agreement, a specimen of which is attached as Exhibit C. Execution by the investor must be made by a means permitted under applicable state law. The Subscription Agreement provided to the investor for execution must be accompanied by a copy of this Prospectus, and each subscriber has the right to cancel his subscription during a period of five business days after the subscriber has submitted the executed Subscription Agreement to the broker-dealer through which the Units are sold. No sale of Units will be completed until at least five business days after the subscriber has received a copy of the final Prospectus. The Fund and/or the selling broker-dealer will send each investor a written confirmation of the acceptance of the investor’s subscription for Units upon admission to the Fund.

The Fund has established basic suitability standards and certain state securities commissioners have established suitability standards different from the Fund’s basic standards which apply to investors in their states. The following are the suitability standards for each jurisdiction in which Units may be offered. Any additional or different requirements will be added by prospectus supplement. In the case of sales of Units to fiduciary accounts, the minimum Net Worth and income standards may be met by the beneficiary, the fiduciary account itself, or by the donor or grantor who directly or indirectly supplies the funds to purchase the Units if the donor or grantor is the fiduciary.

Each investor must meet the Fund’s basic suitability requirements to invest. In general, an investor must have either:

A net worth of at least $70,000 plus $70,000 of annual gross income; or
A net worth of at least $250,000.

Additional State Suitability Requirements

If you are a resident of Alabama, Arizona, California, Iowa, Kentucky, Massachusetts, Michigan, Missouri, Nebraska, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, your investment may not exceed 10% of your liquid net worth. The Idaho Securities Bureau recommends that Idaho investors not invest, the Office of the Kansas Securities Commissioner recommends that Kansas investors not invest, and the Maine Office of Securities recommends that Maine investors not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation investments. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities.

PENNSYLVANIA INVESTORS:  Because the minimum offering is less than $7.5 million, you are cautioned to evaluate carefully the Fund’s ability to accomplish fully its stated objectives and to inquire as to the current dollar volume of Fund subscriptions.

Subscriptions received from Pennsylvania subscribers will be placed in a separate escrow account and will not be counted toward satisfaction of the minimum escrow condition. Instead, Pennsylvania subscriptions will be released to the Fund only at such time as total subscription proceeds received by the Fund from all subscribers, including the escrowed Pennsylvania subscriptions, equal not less than $3.75 million in Gross Proceeds.

By executing the Subscription Agreement, an investor represents that he meets the minimum income and/or Net Worth standards and other minimum investor standards applicable to him, and agrees that such standards may be applied to any proposed transferee of his Units. Each participating broker-dealer who sells Units has the affirmative duty, confirmed in the Selected Dealer Agreement entered into with the Dealer Manager, to determine prior to the sale of Units that an investment in Units is a suitable investment for its subscribing customer, must execute a representation in the Subscription Agreement regarding such suitability, and must maintain information concerning suitability for at least four years following the date of investment. The selling broker and the sponsor must make every reasonable effort to determine that the purchase of Units is a suitable and appropriate investment for each purchaser, based on relevant information concerning the

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investor, including the investor’s age, investment objectives, investment experience, income, Net Worth, financial situation, and other investments, as well as any other pertinent factors.

The minimum number of Units that an investor may purchase is 500, representing a total minimum investment of $5,000. Additional investments may be made in a minimum amount of 50 Units ($500) per subscription, and minimum additional increments of one Unit ($10). Investors seeking to acquire additional Units after their initial subscription need not complete a second subscription agreement. In addition to restrictions on transfer imposed by the Fund, an investor seeking to transfer his Units after his initial investment may be subject to the securities or “Blue Sky” laws of the state in which the transfer is to take place.

The Fund’s income is expected primarily to consist of net interest income realized from its loans. Fund net interest income realized by an IRA or a qualified pension plan, profit-sharing plan, stock bonus plan or Keogh Plan will not be taxable to the plan as “unrelated business taxable income” under the Internal Revenue Code. In considering an investment in the Fund, plan fiduciaries should also consider, among other things, the diversification requirements of Section 401(a)(1)(C) of the Internal Revenue Code, additional legal requirements under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the prudent investment standards generally imposed on plan fiduciaries.

Investors should also note that the Fund is required by the Operating Agreement to distribute its available cash to the extent necessary to allow a Holder in a 35% federal income tax bracket to pay the federal income taxes due on his income from the Fund for the year. So it is possible that a Holder in a higher tax bracket might not receive enough cash from the Fund to pay his tax liabilities. However, the Manager is also required to make cash distributions in certain minimum amounts prior to any reinvestment in portfolio assets and must distribute all available revenues after the sixth year following the year the offering closes. The Manager expects distributions will be in amounts that will exceed the expected tax liabilities resulting from allocations of income regardless of the investors’ tax brackets. Distributions to nonresident or foreign investors may be subject to withholding taxes, which would reduce the amount of cash actually received by such investors. It is anticipated that Fund cash distributions allocable to Units may exceed taxable income allocable to Units in a given year, particularly in the early years of the Fund, resulting in a deferral of taxable income until later years. However, the Fund is not an appropriate investment for investors seeking to generate losses to shelter other sources of income from taxation.

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SUMMARY OF THE OFFERING

This summary outlines the main points of the offering. The summary does not replace the more detailed information found in the remainder of this Prospectus. All prospective investors are urged to read this Prospectus in its entirety.

The Fund:  The Fund is a California limited liability company, and its primary portfolio investment objective will be to provide financing for the acquisition of equipment and other goods and services used by emerging growth companies and established privately held companies without publicly traded securities, and to provide other forms of financing for, and to acquire equity interests and warrants and rights to purchase equity interests in, such companies, which investments will:

(i) Preserve, protect and return the Fund’s invested capital;
(ii) Generate cash flow in amounts sufficient, after payment of expenses, to generate regular distributions to its Unit holders, with any balance remaining after certain minimum distributions on Units (see “Income, Losses and Distributions — Distributions”) to be reinvested in additional portfolio investments during the period ending six years after the year in which the Fund’s offering terminates (the “Reinvestment Period”);
(iii) Provide additional distributions to its Unit holders from any proceeds from sales of equity interests held by the Fund; and
(iv) Thereby provide total cash distributions to Unit holders equal to a desirable rate of return on their invested capital.

There can be no assurance that any such objectives can be attained.

The Fund’s’ portfolio of financing transactions will involve financing various types of financing transaction structures and equipment and other collateral, as described more fully under “Investment Objectives and Policies.”

Management:  The Manager of the Fund is AGC 8 Managing Member, LLC. The Manager and its family of ATEL companies will provide various services to the Fund, including asset management and Fund administration. The Manager and its Affiliates will be responsible for supervising all of the Fund’s business and affairs. The Manager and its Affiliates will act as a fiduciary to the Fund, and, consequently, are required to exercise good faith and integrity in all dealings with respect to Fund affairs. The Fund will have no direct employees, though it will reimburse the Manager and its Affiliates for the cost of their personnel engaged in the business of the Fund. The Manager and its Affiliates will make all business decisions on behalf of the Fund. The offices of the Fund and ATEL are located at 600 California Street, 6th Floor, San Francisco, California 94108, and its telephone numbers are (415) 989-8800 and (800) 543-ATEL (2835).

Risk Factors:  An investment in Units involves risks, including the following:

The Fund will primarily provide financing for privately held venture capital financed companies many of which may not have yet achieved profitability, and such investments are expected to involve greater risks of customer default than investments involving companies with proven records of profitability and more established credit histories. The ability of these customers to achieve profitability may depend on the market for new and developing technologies and products, so will be subject to more uncertainty than would be the case for companies competing in markets for established products. In addition, the ability of these customers in their emerging growth stages to develop their products and services and to achieve profitability may depend to on the availability of capital to companies in their development and growth stages, and the availability of capital to such companies has in the past and may in the future fluctuate and be subject to uncertainty.
Most of the Fund’s distributions will be, and most of the prior ATEL programs’ distributions have been, a return of capital. The portion of total distributions that will be a return of capital and the portion that will be investment income, or return on capital, at the end of the Fund will depend on a number of factors in the Fund’s operations, and cannot be determined until all of its transactions

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have run full cycle and all of its assets have been liquidated, and an investor can compare the total amount of all cash distributions to the total capital invested. For more information on aggregate distributions by prior completed ATEL programs, see Exhibit A — Prior Performance Information, Table IV — Results of Completed Programs.
The Fund’s performance will be subject to risks relating to changes in general economic conditions and financial markets, including fluctuations in interest rates and demand for asset financing. These changes may, and in certain past programs have, resulted in delays in investment and reinvestment, delays in acquisition and disposition of investments, and reduced returns on invested capital. The success of the Fund will be subject to these risks inherent in the asset finance business that may adversely affect the ability of the Fund to acquire its portfolio investments on terms which will permit it to generate profitable rates of return for investors.
The Fund’s performance is subject to risks relating to customer defaults. The Fund may be harmed if a customer defaults on its payment obligations to the Fund and the Fund is unable to collect the principal and interest anticipated from the defaulted financing transaction.
The Fund will pay ATEL substantial fees which may result in conflicts of interest. The Fund will pay substantial fees to the Manager and its related companies before distributions are paid to investors even if the Fund does not produce profits.
No market exists for the Units, the Fund’s Operating Agreement includes significant restrictions on the transfer of Units, and an investor may be unable to sell his Units or able to sell the Units only at a significant discount. Investors will probably not be able to sell their Units for full value if they need to in an emergency. Consequently, investors should consider the purchase of Units only as a long-term investment.
Initially, the Fund may be considered a “blind pool” because, except as may be set forth in a supplement to this Prospectus, the Fund has not specified any of its investments, so that investors cannot evaluate the risks or potential returns from such investments. An investor cannot assess all of the potential risks of an investment in Units because all of the investments to be acquired and the customers and assets it may finance have not been identified.
Investors must rely on ATEL to manage the Fund’s business. The success of the Fund will, to a large extent, depend on the quality of its management, particularly decisions on the customers the Fund will finance, the terms of such financing transactions and the adequacy of the collateral securing the Fund’s financing transactions. Investors will have limited voting rights under the terms of the Fund’s Operating Agreement.
The Manager will be subject to potential conflicts between its interests and the interests of the Fund and investors. Such conflicts could result in the Manager acting in its interest rather than that of the Fund.
The Fund has a minimum and maximum amount of capital. To the extent that its final capitalization is less than the maximum, it will affect its ability to diversify its investment portfolio and any single investment transaction may have a greater impact on its potential profits.
The Fund does not guarantee its distributions or the return of investors’ capital. Accordingly, investors must rely on the performance of the Fund’s portfolio investments to generate distributions in return of capital and a return on their invested capital.

See the discussion under “Risk Factors” for a more complete description of these and other risks relating to an investment in Units.

Who Should Invest:  The Units are a long-term investment, with a primary objective of regular cash distributions. Investors must satisfy minimum Net Worth and income requirements. The Fund has established

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minimum suitability standards and many state securities commissioners have established additional or different suitability standards which apply to investors in their respective jurisdictions. See the discussion below in this prospectus under “Who Should Invest” for the suitability standards imposed by each of the states for investors in their respective jurisdictions.

Use of Capital:  The Fund expects to invest approximately 87% of its capital in the cash portion of the purchase price of its portfolio investments. It intends to retain an additional 0.5% as reserves for general working capital purposes, and to use the balance to pay selling commissions equal to 9%, and other offering and organization expenses in the estimated amount of from 2.5% to 3.5% of the capital raised.

ATEL’s Fees:  The Fund will pay ATEL and its family of related companies substantial fees and compensation in connection with this offering and the operation of the Fund’s business, including the following:

ATEL Securities Corporation will organize and manage the group of broker-dealers selling the Units. It will receive selling commissions, most of which it will pay to the participating broker dealers. ATEL Securities Corporation may retain up to 2% of the sale price of Units.
The Fund will pay ATEL an asset management fee equal to 2% of the Fund’s Gross Financing Revenues from its financing transactions.
The Fund will pay ATEL a promotional interest equal to 5% of the Fund’s distributions of Cash Available for Distribution and 1% of distributions of Net Disposition Proceeds until Unit holders have received a return of their Capital Contributions plus an amount equal to 8% of their Adjusted Capital Contributions per annum cumulative, and then 15% of distributions from all sources.
ATEL will have an additional carried interest in the Fund equal to 5% of all of the Fund’s cash distributions.

Total annual fees and compensation payable to ATEL and its affiliates will be subject to a Management Fee Limit, which will equal the maximum fees that would be payable under guidelines established by the North American Securities Administrators Association for equipment programs as in effect on the date of this Prospectus. The Fund will also reimburse ATEL for offering expenses and administrative expenses ATEL incurs on behalf of the Fund, subject to some limitations. For a more complete description of compensation payable to ATEL, the limitations on compensation and the reimbursement of offering and operating expenses, see the discussion below under “Management Compensation — Narrative Description of Compensation” and “— Limitations on Fees.”

Organizational Diagram:  The following diagram shows the relationships among the Fund, the Manager and certain Affiliates of the Manager, including ATEL Investor Services, Inc. (“AIS”), ATEL Ventures, Inc. (“AVI”), ATEL Management Services, LLC (“AMS”), ATEL Financial Services, LLC (“AFS”) and ATEL Securities Corporation (“ASC” or the “Dealer Manager”), that may perform services for the Fund (solid lines denote ownership and control and dotted lines denote other relationships).

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[GRAPHIC MISSING]

Dean L. Cash holds voting control over 100% of ATEL Capital Group’s outstanding capital stock and ATEL Capital Group, LLC’s member interests. ATEL Capital Group controls 100% of the outstanding capital stock of each of AFS, AVI, and AIS. The sole member of the Manager, AGC 8 Managing Member, LLC, is AMS which is wholly owned by ATEL Capital Group, LLC. See “Management” for further information concerning the above entities and their respective officers and directors.

Investment Portfolio:  The Fund intends primarily to provide asset based acquisition financing to non-public venture capital financed companies, some of which may be in their early capitalization stages, and to obtain terms from its customers that may include, as consideration to the Fund for providing financing, the granting of warrants, options or other rights to purchase equity securities issued by the customer, or the opportunity to purchase such equity securities outright (such rights to purchase equity interests and direct equity investments are referred to in this Memorandum as the “equity interests”). Growing young companies often have more difficulty obtaining financing for equipment and other goods and services essential to the development and growth of their business, and, as a result, must offer their financing sources substantial cash deposits, equity participations or other extraordinary consideration to obtain financing. The Funds intend to focus on this market for financing opportunities to achieve investment returns primarily from its direct financing transaction revenues, but also potentially from gains it may realize from the Equity Interests. Fund investments will generally be structured as loans or as finance leases, and, in each case, will be subject to amortization for tax purposes, and cost recovery or depreciation deductions will generally not be available. As a program designed to provide acquisition financing for capital assets, the Fund will be considered an “equipment program.”

Borrowing Policies:  The Fund will not borrow to acquire any of its Portfolio Assets. The Fund has the power to borrow if necessary, but does not intend to incur any indebtedness.

Income, Losses and Distributions:  All Fund income and loss for tax purposes will be allocated to investors and distributions will be allocated to the Manager in payment of the promotional interest and carried interest, as described above, and the balance to investors. The Fund intends to distribute all cash revenues remaining after the Fund

pays its expenses, including other fees paid to ATEL,
establishes or restores its capital reserves, and
to the extent permitted, sets aside amounts for reinvestment in additional portfolio investments.

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After achieving its minimum offering amount, and during the Fund’s offering and operating stages, through the end of a six-year period following the end of the offering of Units, the Fund expects to make regular cash distributions to investors. Until the end of this period, the Fund may invest available revenues in additional portfolio investments. Before it can reinvest its revenues in a given year, however, it must first satisfy conditions which, after the end of the offering period, include making distributions to each investor for the year equal to at least 11% of the purchase price of the Units. After the end of the Fund’s operating stage, the Fund will not reinvest operating revenues, but intends to distribute to investors all available cash through the final liquidation of the Fund, which is expected to occur approximately ten years following the end of the offering period. During this liquidation stage, the timing and amount of distributions are expected to be less regular than during the operating stage. The amount and timing of any and all Fund distributions, and the final liquidation of the Fund, are all subject to Fund operations.

Income Tax Consequences:  This Prospectus has a discussion of federal income tax consequences relating to an investment in Units under the caption “Federal Income Tax Consequences.” Investors should consult with their tax and financial advisors to determine whether an investment in Units is suitable for their investment portfolio.

Summary of the Operating Agreement:  The Operating Agreement that will govern the relationship between the investors and ATEL is a complex legal document. The following is a brief summary of certain provisions of the Operating Agreement discussed in greater detail under “Summary of the Operating Agreement.”

Voting Rights of Members.  Each investor will become a member of the Fund, and will be entitled to cast one vote for each Unit owned as of the record date for any vote of all the members. The members are entitled to vote on only certain fundamental organizational matters affecting the Fund, and have no voice in Fund operations or policies.
Meetings.  ATEL or Members holding 10% or more of the total outstanding Units may call a meeting of the Members or a vote of the Members without a meeting, on matters on which they are entitled to vote.
Dissenters’ Rights and Limitations on Mergers and Roll-ups.  The Operating Agreement provides Members with protection in a proposed reorganization in which the investors would be issued new securities in the resulting entity.
Transferability of Units.  ATEL may condition any proposed transfer of Units on, among other things, legal opinions confirming that the proposed transfer does not violate securities laws and will not result in adverse tax consequences to the Fund. The Manager will take such actions as may be deemed necessary to assure that no public trading market develops for the Units in order to protect the anticipated tax consequences of an investment in the Fund. The Fund will not permit any transfer which does not follow the rules in the Operating Agreement.
Liability of Investors.  Under the Operating Agreement and California law, an investor complying with the Operating Agreement will not personally be liable for any debt of the Fund.
Status of Units.  Under the Operating Agreement, each Unit will be fully paid and non-assessable and all Units have equal voting and other rights, except there are limitations on the voting of Units held by ATEL.
Term of the Fund.  The Fund intends to distribute all available cash to its Members beginning after the end of the sixth full year following the end of the offering, with the final distribution expected approximately ten years after the termination of the offering. There can be no assurance as to the final liquidation date of the Fund, however, as the Manager will direct liquidation of the Fund’s assets in the manner it believes will best accomplish the Fund’s primary investment objectives.
Books of Account and Records.  ATEL is responsible under the Operating Agreement for keeping books of account and records of the Fund showing all of the contributions to the capital of the Fund and all of the expenses and transactions of the Fund. These books of account and records will be kept at the principal place of business of the Fund in the State of California, and each Member and

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his authorized representatives shall have, at all times during reasonable business hours, free access to and the right to inspect and copy at their expense the books of the Fund, and each Member shall have the right to compel the Fund to deliver copies of certain of these records on demand.
Indemnification of ATEL.  The Operating Agreement provides that ATEL and its related companies who perform services for the Fund will be indemnified against certain liabilities.

Plan of Distribution:  The Units will be offered through ATEL Securities Corporation (the “Dealer Manager”), who will organize a group of other broker-dealers who are members of the Financial Industry Regulatory Authority (“FINRA”). The offering price of $10 per Unit was arbitrarily determined by the Manager.

The Dealer Manager will receive selling commissions equal to 9% of the sale price of Units, of which it will pay 7% to the participating broker dealers, and will retain up to 2%. The Fund, the Manager or its affiliates will pay or reimburse the Dealer Manager or other broker dealers, or will otherwise bear certain underwriters’ expenses, in an aggregate amount of up to 1% of the sale price of Units as additional selling compensation. The Manager, the Dealer Manager or the broker-dealers engaged by the Dealer Manager to sell the Units, or any of their Affiliates or employees, and clients of certain registered investment advisors, may purchase Units in this offering net of the 7% retail selling commissions at a per Unit price of $9.30. The Fund will therefore receive a net sales price in the amount of $9.10 per Unit on every Unit sold. There is no limit on the number of Units which may be sold net of the retail selling commission.

Until subscriptions for a total of 120,000 Units are received and accepted, all offering proceeds will be deposited in an escrow account. Upon receipt and acceptance of subscriptions to a minimum of 120,000 Units, the subscription proceeds will be released to the Fund. The offering will terminate not later than two years from the date of this Prospectus.

Glossary:  See the definitions listed in “Glossary” below for a complete list of defined terms used in this Prospectus and the Operating Agreement.

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RISK FACTORS

The purchase of Units involves various risks. Therefore, investors should consider the following material risk factors before making a decision to purchase Units.

The Fund will primarily provide financing for companies which do not have substantial operating histories or records of profitability, so will be subject to a greater risk of loss from customer defaults than if its customers were of higher credit quality.  The Fund will primarily provide financing for companies which do not have substantial operating histories or records of profitability, many of which may be developing products or services prior to bringing them to market, including development of some new and untested technologies. Fund financing will generally be provided through loans secured by equipment and other goods acquired by the borrower, and, in many cases, other assets of the borrower. Because of their stage of development and the types of products and technologies they are seeking to develop, these companies will be more subject to changes and fluctuations in financial, technology and product markets. While rates of return on financing transactions with these customers may be higher than with more established companies, such higher rates are due to the greater risks of default, and therefore loss of the Fund’s invested capital, than would be found in financing more established and profitable companies. The Fund’s investment objectives include the goal of providing financing to emerging growth companies and established privately held companies without publicly traded securities from which the Funds may obtain Equity Interests with substantial potential for capital appreciation. Many, if not most, of these companies, however, involve a significant risk that the company might fail or not thrive, rendering any Equity Interest obtained from the customer worthless in spite of the added risk incurred in order to obtain a higher rate of return on the Fund’s investment. If a borrower does not make debt service payments to the Fund when they are due under its loan, or violates the terms of its loan in another important way, the Fund may be forced to foreclose on the loan and sell the equipment and other assets held as collateral. The Fund’s rights in the other assets used as collateral may be junior to other lenders and creditors of the borrower. The Fund would lose the expected loan revenues from any foreclosed loan and might not be able to recover the entire amount of its original investment through the collateral. If a borrower files for protection under the bankruptcy laws, the Fund may experience difficulties and delays in enforcing its rights against the defaulting borrower. The collateral may be in poor condition and therefore of lower value than anticipated when the investment was made. In some cases, a borrower’s deteriorating financial condition may make trying to recover what it owes the Fund impractical. The costs of enforcing the borrower’s obligations under the loan, and realizing any value from the collateral securing the loan may be high and may affect the Fund’s profits.

Companies Engaged in Development of Technologies and Other Growth Industry Businesses Face More Uncertainty in Their Ability to Achieve Profitability.  The Fund expects to invest in financing transactions with companies engaged in the development of technologies and other growth industry businesses. Many of these companies are expected to require substantially more capital to complete product development, market their products or services and obtain and maintain desirable market positions. These companies will face significant competition and unique risks related to new product development, product marketability and competitive pricing, and product obsolescence. Product development may result in long periods without production of revenues, delays between prototype stages and the stage of full volume production and distribution, and the need for, and the cost and availability of, additional capital for expansion of production or product lines, further product development and market expansion.

Emerging Growth Companies May Experience Difficulty In Obtaining the Capital Necessary to Reach Profitability, Which May Limit the Number and Types of Investments Available To The Fund and Also May Create Greater Risk Of Default On These Customers Obligations To the Fund.  The number and quality of growth capital investment opportunities for the Fund will depend to a significant extent on the amount of equity financing available to companies in their emerging growth stages. The availability of such equity financing will determine to a great extent the demand for secondary growth stage financing such as that which the Funds intend to provide through their portfolio of financing transactions. Fluctuations in demand by emerging growth companies for equipment and other financing may affect the ability of the Fund to invest its capital in a timely manner. The amount of equity capital investments into venture-backed companies peaked in the first quarter of 2000 and declined in each quarter through the first quarter of 2003. The level of such equity investment then leveled off and began to increase by the end of 2004, and increased through the end of

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2006 before declining through the end of 2009 along with overall capital activity during that period. The level of such investment has increased moderately since 2009, but has not returned to pre-2000 levels. Accordingly, there can be no assurance as to the availability of equity capital financing for emerging growth companies during the period the Funds intend to acquire their respective portfolios of growth capital financing investments.

Most of the Fund’s distributions are expected to be a return of capital.  The portion of total distributions that will be a return of capital and the portion that will be investment income at the end of the Fund will depend on a number of factors in the Fund’s operations, and cannot be determined until the Fund has liquidated and an investor can compare the total amount of all cash distributions to the total capital invested.

The success of the Fund will be subject to risks inherent in the financing business that may adversely affect the ability of the Fund to acquire its Portfolio Assets on terms which will permit it to generate profitable rates of return for investors.  The success of the Fund will be subject to risks inherent in the business of financing privately held companies, including emerging growth companies, that may adversely affect the ability of the Fund to acquire their portfolios on terms which will permit them to generate profitable rates of return for investors. A number of general economic conditions and market factors could threaten the Fund’s ability to operate profitably. These include:

changes in economic conditions, including fluctuations in demand for financing, lease rates, interest rates and inflation rates,
fluctuations in the availability of financing for privately held companies and emerging growth companies, and changes in the market for initial public offerings that may affect the ability of emerging growth companies to obtain financing and access the capital markets, and
increases in Fund expenses (including labor, energy, taxes and insurance expenses)

The Fund may be harmed if a customer defaults and the Fund is unable to collect the revenue anticipated from the defaulted investment.  If a customer does not make financing payments to the Fund when they are due or violates the terms of its contract in another important way, the Fund may be forced to cancel the transaction and seek disposition of the collateral, or may be required to pursue other legal remedies. The default may occur at a time when the Manager may be unable to arrange for the sale of the collateral right away. The Fund would then lose the expected revenues and might not be able to recover the entire amount of its original investment. If a customer files for protection under the bankruptcy laws, the Fund may experience difficulties and delays in obtaining a judgment on the defaulted debt. The Fund may be unable to enforce important loan provisions against an insolvent borrower. In some cases, a customer’s deteriorating financial condition may make trying to recover what the customer owes the Fund impractical. The costs of recovering collateral upon a default, enforcing the customer’s obligations under the financing transaction terms and finding a new purchaser for recovered collateral may be high and may affect the Fund’s profits.

There are significant limitations on the transferability of Units and investors should consider the purchase of Units only as a long-term investment.  The Manager will take steps to assure that no public trading market develops for the Units. If a public trading market were to develop, the Fund could suffer a very unfavorable change in the way it is taxed under the federal tax laws. Investors will probably not be able to sell their Units for full value if they need to in an emergency. Units may also not be accepted as collateral for a loan. While the Fund may redeem Units in its discretion, it has no obligation to redeem any Units and investors should not expect to be able to redeem their Units. Consequently, investors should consider the purchase of Units only as a long-term investment.

Initially, the Fund may be considered a “blind pool” because it is a newly formed entity with no prior operating history, and, except as may be set forth in a Supplement to this Prospectus, the Fund has not identified any of its investments or customers.  An investor cannot assess all of the potential risks of an investment in Units because all of the investments to be acquired and the customers have not been identified. A prospective investor will not have complete information as to the number and type of financing transactions to be entered into, the identity, financial condition and creditworthiness of the Fund’s customers, or the characteristics and terms of other investments to be made by the Fund. The Fund was formed in 2011, and has

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no operating history. Investors therefore have no historical operating information for the Fund to evaluate, and must rely upon prior performance information of similar programs sponsored by the Manager’s affiliates in order to evaluate the judgment and ability of the Manager in its selection and management of financing investments and the negotiation of their terms. Investors will not know the size and scope of the Fund or its investment portfolio prior to investment.

Investors will have limited voting rights and must rely on management for the success of the Fund. The Manager, will make all decisions in the management of the Fund. The success of the Fund will, to a large extent, depend on the quality of its management, particularly decisions on the acquisition and management of its investment portfolio. Investors are not permitted to take part in the management of the Fund and have only limited voting rights. An affirmative vote by holders of a majority of the Units is required to remove the Manager. No person should purchase Units unless he is willing to entrust all aspects of management of the Fund to the Manager and has evaluated the Manager’s capabilities to perform such functions.

The Manager will receive substantial compensation which may result in conflicts of interest.  The Fund will pay substantial fees to the Manager and its related companies before distributions are paid to investors even if the Fund does not produce profits.

The Fund does not guarantee its distributions or the return of investors’ capital.  Accordingly, investors must rely on the performance of the Fund’s portfolio investments to generate distributions that provide both a return of capital and a return on their invested capital.

The Fund may enter into financing transactions outside of the United States and foreign financing transactions may involve greater difficulty in enforcing transaction terms and a less predictable legal system.  The Fund may provide asset financing to foreign subsidiaries of United States corporations and to foreign customers. The Fund may also provide financing to U.S. borrowers, in which the collateral is to be used outside the United States. The laws, courts and tax authorities of a foreign country may govern the Fund’s financing transactions, leased assets and collateral in that country. The Fund will attempt to require foreign customers to consent to the jurisdiction of U.S. courts if disputes should arise under the transaction documents. Even if the Fund is successful in this effort, if a foreign customer defaults, the Fund may find it difficult or impossible to enforce judgments against foreign party, recover leased collateral or otherwise enforce the Fund’s rights under the financing transaction. Also, investments with customers in foreign countries may result in unanticipated taxes or confiscation without fair compensation. See “Investment Objectives and Policies — Foreign Transactions.”

If investment terms involve payments in foreign currency, the Fund will be subject to the risk of currency exchange rate fluctuations, which could reduce the Fund’s overall profit on an investment.   Many countries also have laws regulating the transfer and exchange of currencies, and these laws may affect a foreign customer’s ability to comply with transaction terms.

The financing industry is highly competitive and competitive forces could adversely affect the interest rates and rates of return the Fund may realize on its financing investment portfolio and the prices the Fund has to pay to acquire its investments.  Commercial banks, equipment manufacturers, corporations, partnerships and others offer users an alternative to finance most types of equipment with payment terms that vary widely depending on the type of financing, the financing transaction term and type of equipment. In seeking financing transactions, the Fund will compete with financial institutions, manufacturers and public and private leasing and finance companies, many of which may have greater financial resources than the Fund.

Lending activities involve a risk that a court could deem the Fund’s financing rates usurious and unenforceable.  In addition to credit risks, the Fund may be subject to other risks in financing transactions. Some courts have held that certain loan features, such as equity interests, constitute additional interest. State laws determine what rates of interest are deemed usurious, when the applicable rate of interest is determined and how it is calculated. A finding that an equity interest is additional interest could result in a court determining that the rate of interest charged by the Fund is usurious, the “interest” obligation under the Fund’s loan could be declared void, and the Fund could be deemed liable for damages or penalties under the applicable state law.

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The Fund will be subject to the risk of claims asserting theories of “lender liability” resulting in Fund liability for damages incurred by borrowers.  Various common law and statutory theories have been advanced to hold lenders liable to their borrowers. The general principle underlying this theory of liability is that lenders have a form of duty similar to a quasi fiduciary duty to their borrowers, regardless of the terms of the loan agreements and other financing documents. Breach of that duty by the lender can lead to liability for damages to the borrower. The Fund and its Manager intend to act in good faith in all dealings with the Fund’s borrowers and in a manner designed to mitigate any potential for such liability, and to date no prior investment program managed the Manager or any of its Affiliates has incurred any such liability nor has any prior program been otherwise adversely affected by the imposition of duties to borrowers. Nevertheless, this area of law is rapidly changing and there can be no assurance that actions the Manager believes are appropriate to take in protecting the Fund’s interests as lender might not cause the Fund to be liable for a deemed breach of a duty to a borrower.

The Manager is subject to certain potential conflicts of interest that could result in the Manager acting in its interest rather than that of the Fund.  These include potential conflicts relating to the following matters:

The Manager engages in other, potentially competing activities
The Fund may be in competition for investments with prior, current and future programs sponsored by the Manager
Agreements between the Fund and the Manager and its Affiliates are not at arm’s length
No independent managing underwriter has been engaged for the distribution of Units
The Fund, the Manager and prospective holders are not represented by separate counsel and
The Fund may, under certain conditions and restrictions, enter into joint ventures with other programs affiliated with the Manager

See the discussion under “Conflicts of Interest” for a more complete description of the foregoing matters.

The amount of capital actually raised by the Fund may determine its diversification and profitability. The Fund’s offering will be not less than $1,200,000 nor more than $75,000,000. If the Fund receives only the minimum capital, it will be more difficult to diversify its investment portfolio, and any single investment transaction will have a greater impact on its potential profits. The Fund has no minimum number of investment transactions nor is there any restriction on the percentage of the minimum capital that it may use any single investment.

Investors will not be able to withdraw their funds from the escrow account pending the satisfaction of the Fund’s minimum offering amount, and may therefor not have use of their invested capital for an extended period of time.  All subscription proceeds will be deposited in an escrow account until the Fund has received subscriptions for Units with gross proceeds of not less than $1,200,000 deposited in the escrow account. The offering will be terminated if the Fund has not reached such minimum funding by a date twelve months from the date of this Prospectus. If the offering is terminated prior to achieving the minimum funding level, all subscription proceeds will be returned, together with any interest earned thereon, to subscribers. Investors will have no right to withdraw invested capital during the escrow period, so investors may not have access to or use of their invested capital, and such capital may not be put to use by the Fund, for a period of up to one year.

Investment by the Fund in joint ownership of investments may involve risks in coordinating its interests with those of its joint venture partner.  Some of the Fund’s investments may be owned by joint ventures between the Fund and unaffiliated third parties or, under certain circumstances, programs related to the Fund or the Manager, or as co-owners with such parties. The investment by the Fund in joint ownership, instead of acquiring an investment directly or as the sole owner, may involve risks such as:

the Fund’s co-venturer might become bankrupt,
the co-venturer may have interests or goals that are inconsistent with those of the Fund,

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the parties may reach an impasse on joint venture decisions,
the co-venturer may be in a position to take action contrary to the instructions or the requests of the Fund or contrary to the Fund’s policies or objectives, or
actions by a co-venturer might have the result of subjecting assets owned by the joint venture to liabilities in excess of those contemplated by the terms of the joint venture agreement or might have other adverse consequences for the Fund.

Risks Relating to Tax Matters

In determining whether to invest in the Units, a prospective investor should consider possible tax consequences, which may include:

If the IRS classifies the Fund as a corporation rather than a partnership, investor distributions would be reduced under current tax law.  Although counsel has rendered an opinion that the Fund will be taxed as a partnership and not as a corporation, the opinion is not binding on the IRS, and the IRS has not ruled on any federal income tax issue relating to the Fund. If the IRS successfully contends that the Fund should be treated as a corporation for federal income tax purposes rather than as a partnership, then the income of the Fund would be taxed at tax rates applicable to corporations. This would reduce the Fund’s cash available to distribute to investors, and investor distributions would be taxed as dividend income to the extent of current and accumulated earnings and profits.

The IRS may allocate more taxable income to investors than the Operating Agreement provides.  The IRS might successfully challenge Fund allocations of profits or losses. If so, the IRS would require reallocation of taxable income and loss, resulting in more taxable income or less loss for than the Operating Agreement allocates.

This investment may cause investors to pay additional taxes and file additional tax returns.  Investors may be required to file tax returns and pay state, local and/or foreign taxes as a result of an investment in the Fund. Also, investors may be subject to withholding in states where Fund income is deemed to be generated.

Each investor is urged to consult his tax advisor regarding his own tax situation and potential changes in the tax law.

Retirement Plan Risks

An investment in Units by a retirement plan must meet the fiduciary and other standards under ERISA or the Internal Revenue Code or the investment could be subject to penalties.  There are special considerations that apply to pension or profit sharing trusts or IRAs investing in Units. Retirement plans investing the assets of a pension, profit sharing, 401(k), Keogh or other qualified retirement plan or the assets of an IRA in Units should be satisfied that the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code. Civil penalties and excise taxes may be imposed on prohibited transactions.

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Internal Revenue Code may result in imposition of civil and criminal penalties, and can subject the fiduciary to equitable remedies. Fiduciary standards include the following:

whether the investment is made in accordance with the documents and instruments governing the retirement plan;
whether the investment satisfies the prudence and diversification requirements of ERISA and the Internal Revenue Code;
whether the investment will impair the liquidity of the retirement plan;
whether the investment will produce “unrelated business taxable income” for the retirement plan; and
whether the assets of the plan can be valued annually.

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ERISA and the Internal Revenue Code may apply what is known as the “look-through” rule to an investment in Units. Under that rule, the assets of an entity in which a retirement or profit sharing plan subject to ERISA or an IRA has made an equity investment may constitute assets of the plan or IRA. A fiduciary of an ERISA retirement or profit sharing plan or IRA should consult with his or her advisors and carefully consider the effect of that treatment if that were it to occur.

For a discussion of these matters please see “ERISA Considerations.”

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ESTIMATED USE OF PROCEEDS

Many of the figures set forth below, such as the amount of offering and organization expenses and capital reserves, are only estimates and not statements of expenditures already incurred. The actual amounts will depend on the course of the offering of the Units and the operations of the Fund. The Fund expects to commit approximately 87% of the Gross Proceeds of this offering to the cash portion of the purchase price of its portfolio of financing transactions. At least an additional one-half of one percent of its initial capital will be held as capital reserves.

       
  Minimum Offering   Maximum Offering
     Amount   Percent   Amount   Percent
Gross Offering Proceeds   $ 1,200,000       100.00   $ 75,000,000       100.00
Less Offering and Organization Expenses:
                                   
Selling Commissions     108,000       9.00     6,750,000       9.00
Additional Selling Compensation     12,000       1.00     750,000       1.00
Other Offering and Organization Expenses     30,000       2.50     1,875,000       2.50
Net Offering Proceeds     1,050,000       87.50     65,625,000       87.50
Capital Reserves     6,000       0.50     375,000       0.50
Amount Available for Cash Payments for Portfolio Assets   $ 1,044,000       87.00   $ 65,250,000       87.00

The Fund will pay selling commissions equal to 9% of the selling price of Units to ATEL Securities Corporation, an Affiliate of the Manager acting as the Dealer Manager for the group of selling broker-dealers. ATEL Securities Corporation will in turn pay to participating broker-dealers selling commissions equal to 7% of the price of Units sold by them, retaining the balance of 2%. The line item “Additional Selling Compensation” reflects amounts of up to 1% of Gross Proceeds in “underwriters’ expenses” that may be paid or reimbursed to the Dealer Manager and participating broker dealers, as well as certain other expenses that will be borne by the Fund that are deemed “underwriters’ expenses.” All of such amounts paid to the Dealer Manager or participating broker dealers is additional selling compensation payable for the sale of Units, and all such additional selling compensation and all selling commissions are together deemed “underwriting compensation” paid in connection with the offering. The total of all such underwriting compensation may not exceed an amount equal to 10% of the Gross Proceeds.

In addition to such amounts considered to be “underwriting compensation,” the Fund or the Manager may reimburse participating broker dealers for bona fide due diligence expenses subject to detailed, itemized invoices for such amounts. Bona fide due diligence expenses will include actual costs incurred by broker-dealers to review the business, financial statements, transactions, and investments of ATEL and its prior programs to determine the accuracy and completeness of information provided in this Prospectus, the suitability of the investment for their clients and the integrity and management expertise of ATEL and its personnel. Costs may include telephone, postage and similar communication costs incurred in communicating with ATEL personnel and ATEL’s outside accountants and counsel in this pursuit; travel and lodging costs incurred in visiting the ATEL offices, reviewing ATEL’s books and records and interviewing key ATEL personnel; the cost of outside counsel, accountants and other due diligence investigation specialists engaged by the broker-dealer; and the internal costs of time and materials expended by broker-dealer personnel in this due diligence effort. ATEL will require full itemized documentation of any claimed due diligence expenditure and will determine whether the expenditure can be fairly allocated to bona fide due diligence investigation before permitting reimbursement.

Certain persons, including the Manager, the Dealer Manager or the broker-dealers engaged by the Dealer Manager to sell the Units, or any of their Affiliates or employees, and others may purchase Units in this offering with reduced selling commissions under specific circumstances described under “Plan of Distribution — Investments By Certain Persons.” In such event, the amount of “Gross Offering Proceeds” and “Selling Commissions” would be reduced, but such reduced commissions would not affect the amount of “Net Offering Proceeds.”

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Other offering and organization expenses include “issuer expenses” incurred in the organization of the Fund, legal, accounting and escrow fees, printing costs, filing and qualification fees, and “underwriters’ expenses” in the form of disbursements and reimbursements to broker-dealers participating in the sale of Units. These underwriters’ expenses include amounts paid to the Dealer Manager and participating broker dealers relating to sales seminar expenses, advertising and promotion expenses, travel, food and lodging costs, telephone expenses and an allocable portion of the Dealer Manager’s salary expenses and legal fees borne by the Manager and its Affiliates. The Manager has agreed to pay all Organization and Offering Expenses, without reimbursement from the Fund, that exceed an amount equal to 15% of the offering proceeds, provided, however, that if the Fund’s final offering proceeds are less than $2,000,000, the Manager has agreed to pay all Organization and Offering Expenses that exceed an amount equal to 13% of the total offering proceeds. Payment of these expenses by the Manager will be without reimbursement by the Fund.

The Fund will initially establish capital reserves in an amount equal to 0.5% of offering proceeds for general working capital purposes. This amount may fluctuate from time to time as the Manager determines the level of reserves necessary for the proper operation of the Fund in the exercise of its business judgment. Any net offering proceeds not used to acquire portfolio investments or needed as capital reserves will be returned to Unit holders as described under “Investment Objectives and Policies — General Policies” below.

The line item for “Amounts Available for Cash Payments for Portfolio Assets” is the amount available to pay the cash portion of the purchase price of Portfolio Assets plus related acquisition expenses, which are treated for tax and accounting purposes as capitalized costs added to the basis of the investments to which they relate.

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MANAGEMENT COMPENSATION

Summary Table

The following table includes estimates of the maximum amounts of all compensation and other payments that the Manager and its Affiliates will receive, directly or indirectly, in connection with the operations of the Fund, all of which are described more completely below under “Narrative Description of Compensation.” The terms of the Manager’s compensation were not determined by arm’s-length negotiation. The Operating Agreement does not permit the Manager or its related entities to receive more than the maximum fees or expenses stated for each type of compensation by reclassifying such items under a different category.

   
Entity Receiving
Compensation
  Type of Compensation   Estimated Amount Assuming
Maximum Units Sold
OFFERING AND ORGANIZATION STAGES
The Dealer Manager   Selling Commissions (2% of offering proceeds will be retained by the Dealer Manager) plus additional selling compensation of up to 1% of offering proceeds through payment or reimbursement of underwriters’ expenses   $1,500,000 (plus additional selling compensation not to exceed $750,000)
Manager and Affiliates   Reimbursement of Organization and Offering Expenses (when added to selling commissions and additional selling compensation, not to exceed a total equal to 15% of all offering proceeds)   $1,875,000
OPERATIONAL STAGE
Manager and Affiliates   Asset Management Fee (an annual fee equal to 2% of Gross Financing Revenues, subject to limitations based on Fund operations)   Not determinable at this time
Manager and Affiliates   Promotional Interest equal to (i) 5% of all distributions from Cash Available for Distribution and 1% of all distributions of Net Disposition Proceeds, until investors have received total distributions in amounts equal to a return of their Capital Contributions plus an amount equal to 8% of their Adjusted Capital Contributions per annum cumulative; and (ii) then 15% of all additional distributions).   Not determinable at this time
Manager and Affiliates   Reimbursement of Operating Expenses, subject to certain limitations   Not determinable at this time
CARRIED INTEREST IN FUND
Manager and Affiliates   Carried Interest equal to 5% of all Fund cash distributions   Not determinable at this time

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Narrative Description of Compensation

Selling Commissions.  The Dealer Manager will receive selling commissions on all sales of Units equal to 9% of Gross Proceeds. The Dealer Manager will reallow to participating broker-dealers 7% of the Gross Proceeds from Units sold by them. In addition to selling commissions, the Fund, the Manager or its affiliates will pay or reimburse the Dealer Manager, or otherwise bear certain expenses, in an amount of up to 1% of the Gross Proceeds, as additional selling compensation. It is not anticipated that the Dealer Manager or other Affiliates of the Manager will directly effect any sales of the Units, although the Dealer Manager will provide certain wholesaling services.

Reimbursement of Organization and Offering Expenses.  The Manager and its Affiliates will be reimbursed for certain expenses in connection with the organization of the Fund and the offering of Units. Total Organization and Offering Expenses payable or reimbursable by the Fund, including selling commissions payable directly by the Fund, and any additional selling compensation, may not exceed 15% of all offering proceeds, provided, however, that if the Fund’s final offering proceeds are less than $2,000,000, the Manager has agreed to pay all Organization and Offering Expenses that exceed an amount equal to 13% of the total offering proceeds.

Asset Management Fee.  The Fund will pay the Manager an annual Asset Management Fee in an amount equal to 2% of Gross Financing Revenues (defined as all financing revenues and all debt service payments on Portfolio Assets, but excluding Net Disposition Proceeds and security deposits paid by lessees). The Asset Management Fee will be paid on a monthly basis. The Asset Management Fee will be paid for services rendered by the Manager and its Affiliates in determining portfolio and investment strategies and generally managing or supervising the management of the investment portfolio. The Manager will supervise performance of all management activities, including, among other activities: the acquisition and financing of the investment portfolio; the collection of financing revenues; monitoring compliance by customers with their contract terms; assuring that collateral and other investment assets are being used in accordance with all operative contractual arrangements; paying operating expenses and arranging for necessary maintenance and repair of collateral in the event a customer fails to do so; monitoring property, sales and use tax compliance; and preparation of operating financial data.

Promotional Interest.  For organizing the Fund and structuring its portfolio, the Manager will receive a Promotional Interest equal to (i) 5% of all Distributions from Cash Available for Distribution and 1% of all Distributions of Net Disposition Proceeds until investors have received distributions in amounts equal to a return of their Capital Contributions plus an amount equal to their respective Priority Returns; and (ii) then 15% of all additional Distributions.

Reimbursement of Operating Expenses.  The Fund will reimburse the Manager and its Affiliates for expenses it pays on the Fund’s behalf. These reimbursements will include:

the actual cost to the Manager or its Affiliates of services, goods and materials used for and by the Fund and obtained from unaffiliated parties; and
the cost of administrative services provided by Affiliates of the Manager and necessary to the prudent operation of the Fund, provided that reimbursement for administrative services will be at the lower of
the actual cost of such services, or
the amount that the Fund would be required to pay to independent parties for comparable services.

The Manager estimates that the total amount of reimbursable administrative expenses during the Fund’s first full year of operations after completion of the offering, assuming receipt of the maximum Gross Proceeds, will be approximately $500,000 to $600,000.

Carried Interest in Fund Distributions.  The Fund Manager will have a Carried Interest in the Fund equal to 5% of all Distributions. The Carried Interest will compensate the Manager for supervising and arranging for supervision of Fund administration (e.g., investor communications and services, regulatory reporting, accounting and transfers of Units).

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Limitations on Fees

The total of all Front End Fees, the Carried Interest, the Asset Management Fee and the Promotional Interest will be subject to the Management Fee Limit in order to assure state securities administrators that the Fund will not bear greater fees than permitted under the state merit review guidelines. The North American Securities Administrators Association, Inc. (“NASAA”) is an organization of state securities administrators, those state government agencies responsible for qualifying securities offerings in their respective states. NASAA has established standards for the qualification of a number of different types of securities offerings and investment products, including its Statement of Policy on Equipment Programs in effect as of the date of this Prospectus (the “NASAA Equipment Leasing Guidelines”). Article IV, Sections C through G and Article V, Section F of the NASAA Equipment Leasing Guidelines establish the standards for payment to program sponsors of reasonable carried interests, promotional interests and fees for equipment acquisition, management, resale and releasing services, and sets the maximum compensation payable to the sponsor and its affiliates from an equipment leasing program such as the Fund. The Management Fee Limit will equal the maximum compensation payable under Article IV, Sections C through G, and Article V, Section F, of the NASAA Equipment Leasing Guidelines as in effect on the date of the Fund’s prospectus (the “NASAA Fee Limitation”). Under the Management Fee Limit, the Fund will calculate the maximum fees payable under the NASAA Fee Limitation and guarantee that the total of the amount of Front End Fees, the Carried Interest, the Asset Management Fee and the Promotional Interest it will pay the Manager and its Affiliates, when added to its will never exceed the maximum compensation payable to a sponsor and its affiliates under the NASAA Fee Limitation.

Management Fee Limit.  The Management Fee Limit will be calculated each year during the Fund’s term by calculating the total fees that would be paid to the Manager if the Manager were to be compensated on the basis of the maximum compensation payable under the NASAA Fee Limitation through the end of such year, as described below. To the extent that the amount paid as Front End Fees, the Asset Management Fee, the Promotional Interest and the Carried Interest for any year would, when added to amounts paid in all prior years, cause the total fees through the end of such year to exceed the aggregate amount of fees calculated under the NASAA Fee Limitation for the same period, the amount of the Promotional Interest and/or Carried Interest payable to the Manager and its Affiliates for that year will be reduced so that the total of all such compensation paid through the end of the period will not exceed the maximum aggregate fees under the NASAA Fee Limitation. To the extent any amounts otherwise payable to the Manager as the Promotional Interest and/or Carried Interest are reduced, the amount of such reduction will be accrued and deferred, and such accrued and deferred compensation would be paid to the Manager in a subsequent period, but only to the extent that the deferred compensation would be within the Management Fee Limit as calculated through that later period. Any deferred fees that cannot be paid under the applicable limitations through the date of liquidation would be forfeited by the Manager at liquidation.

Under the NASAA Equipment Leasing Guidelines, the Fund is required to commit a minimum percentage of the Gross Proceeds to Investment in Equipment, calculated as the greater of: (i) 80% of the Gross Proceeds reduced by 0.0625% for each 1% of indebtedness encumbering the Fund’s Portfolio Assets; or (ii) 75% of such Gross Proceeds. The Fund expects to commit 87.5% of the Gross Proceeds to Investment in Equipment. The Fund will not incur any debt to acquire its portfolio of financing investments. Accordingly, the Minimum Investment in Equipment will be 80% and the Fund’s expected Investment in Equipment would therefore exceed the NASAA Fee Limitation minimum by 7.5%.

The Fund will pay the Manager a maximum Carried Interest equal to 5% of all Distributions, but the amount of the Carried Interest permitted the Manager under the NASAA Fee Limitation will be dependent on the amount by which the percentage of Gross Proceeds the Fund ultimately commits to Investment in Equipment exceeds the minimum Investment in Equipment under the NASAA Fee Limitation. The NASAA Fee Limitation permits the Manager and its Affiliates to receive compensation in the form of a carried interest in Fund Distributions equal to 1% for the first 2.5% of excess Investment in Equipment over the NASAA Guidelines minimum, 1% for the next 2% of such excess, and 1% for each additional 1% of excess Investment in Equipment.

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With an Investment in Equipment of 87.5% and zero portfolio leverage, the Manager and its Affiliates may receive a Carried Interest of 5% of Distributions under the foregoing formula (2.5% + 2% + 3% = 7.5% over the minimum [80%]; so, 1% + 1% + 3% = 5% Carried Interest).

As described above, the total amount of Front End Fees paid by the Fund will determine whether the Carried Interest permitted under the NASAA Fee Limitation and the Management Fee Limit imposed by the Operating Agreement is 5% or a lesser percentage. The maximum amounts to be paid under the terms of the Operating Agreement are subject to the application of the Management Fee Limit provided in Section 8.3 of the Agreement, which limits the annual amount payable to the Manager and its Affiliates as the Asset Management Fee, Promotional Interest and the Carried Interest to an aggregate not to exceed the total amount of fees that would be payable to the Manager and its Affiliates under the NASAA Fee Limitation.

Upon completion of the offering of Units, final commitment of offering proceeds to acquisition of Portfolio Assets, the Manager will calculate the maximum Carried Interest, Asset Management Fee and Promotional Interest payable to the Manager and its Affiliates under the NASAA Fee Limitation. If and to the extent that the Asset Management Fee, Promotional Interest and Carried Interest would exceed the fees calculated under the NASAA Fee Limitation, the fees payable to the Manager and its Affiliates will be reduced by an amount sufficient to cause the total of such compensation to comply with the NASAA Fee Limitation. A comparison of the total compensation actually paid to the Manager and Affiliates by the Fund and the NASAA Fee Limitation maximum will be repeated, and any required adjustments will be made, annually thereafter.

Defined Terms Used in Description of Compensation

Definitions of certain capitalized terms used in the foregoing narrative description of compensation payable to the Manager are as follows:

“Adjusted Capital Contribution” shall mean, as of any date, the original Capital Contribution attributable to the Units held by any person on or before such date, as decreased (but not below zero) by the amount which (i) all Distributions from Cash Available for Distribution with respect to such Units on or before the date of determination pursuant to any provision of this Agreement exceed (ii) the Priority Distribution attributable to such Units for such period.

Carried Interest” means the allocable share of Fund Distributions payable to the Manager, as a Member, pursuant to Sections 10.4 of the Operating Agreement.

“Cash Available for Distribution” shall mean Cash Flow plus cash funds available for distribution from Fund reserves less amounts set aside for restoration or creation of reserves.

Cash Flow” shall mean Fund cash provided from operations, without deduction for depreciation, but after deducting cash used to pay all other expenses, debt payments, capital improvements and replacements (other than cash withdrawn from reserves).

Distributions” means any cash distributed to Holders and the Manager arising from their respective interests in the Fund.

Front-End Fees” shall mean fees and expenses paid by any party for any services rendered during the Fund’s organization and acquisition phase including organization and offering expenses, leasing fees, acquisition fees, acquisition expenses, and any 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.

Management Fee Limit” means the total fees calculated pursuant to the NASAA Fee Limitation, determined in the manner described above.

“Promotional Interest” shall mean the share of Distributions of Cash Available for Distribution and Net Disposition Proceeds payable to the Manager and its Affiliates under the provisions of Section 10.4 of the Operating Agreement.

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“Priority Return” means an amount equal to, for any calendar year or other period with respect to the Units held by any Person, the average Adjusted Capital Contribution with respect to such Units during such period multiplied by 8% per annum (calculated on a cumulative basis, compounded daily, from the last day of the calendar quarter in which the Capital Contribution of the initial purchaser of such Units was received by the Fund and pro-rated for any fraction of a calendar year for which such calculation is made).

Affiliates of the Manager

The Operating Agreement permits the Manager to delegate its responsibilities for various management functions to one or more of its affiliates, to assign its compensation to such affiliates and to cause the Fund to reimburse such affiliates for expenses incurred on the Fund’s behalf.

All of such affiliates are under common control with the Manager as all are directly or indirectly controlled by Dean L. Cash, the controlling Unit holder, chairman of the board, president and chief executive officer of the Manager, ATEL Capital Group LLC and ATEL Management Services, LLC, among other related entities. See the information under “Summary of the Offering — Organizational Diagram” above in the Prospectus and the discussion under “Management” below.

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INVESTMENT OBJECTIVES AND POLICIES

Principal Investment Objectives

The Fund’s principal objectives are to provide acquisition financing for equipment and other capital assets, and other asset based financing, for emerging growth companies financed by venture capital and established privately held companies without publicly traded securities, and to acquire equity interests and warrants and rights to purchase equity interests in these companies, which investments will:

(i) Preserve, protect and return the Fund’s invested capital;

(ii) Generate cash flow in amounts sufficient, after payment of expenses to generate regular distributions to Unit Holders, with any balance remaining after certain minimum distributions on Units (see “Income, Losses and Distributions — Distributions”) to be reinvested in Portfolio Assets during the period ending six years after the year in which this placement terminates (the “Reinvestment Period”);

(iii) Provide additional distributions to Unit Holders from any proceeds from sales of Equity Interests; and

(iv) Thereby provide total cash distributions to Unit holders equal to a desirable rate of return on their invested capital.

Distributions on Units will be made only to the extent cash is available after payment of a Fund’s expenses and obligations (including payment of Fund administrative expenses and fees payable to the Manager and its Affiliates) and allowance for necessary reserves. Distributions are expected to commence as of the quarter in which the minimum offering amount is achieved and in which investors are admitted to a Fund. However, there can be no assurance as to the timing of Distributions, or that any specific level of Distributions or any other objectives will be attained.

Growth Capital Financing

The Fund intends primarily to provide asset based acquisition financing for equipment and other capital assets to non-public, venture capital financed companies, some of which may be in their early capitalization stages, and to obtain terms from its customers that may include, as consideration to the Fund for providing financing, the granting of warrants, options or other rights to purchase equity securities issued by the customer, or the opportunity to purchase such equity securities outright (such rights to purchase equity interests and direct equity investments are referred to in this Memorandum as the “Equity Interests”). Growing young companies often have more difficulty obtaining financing for equipment and other goods and services essential to the development and growth of their business, and, as a result, must offer their financing sources higher rates of return, substantial cash deposits, equity participations or other extraordinary consideration to obtain financing. The Fund intends to focus on this market for financing opportunities to achieve investment returns from both its direct financing transaction revenues and gains it may realize from the Equity Interests.

The Fund will target companies operating at a stage between their start-up stages and the stage in which they achieve profitability. Equity consideration may be unavailable or less attractive for companies with existing records of profitability. The Manager will look for those companies which show solid potential for consistent profitability within a specific time period, and which have obtained or are expected to attract sufficient equity venture capital to finance their operations through expected profitability. The Manager will seek to work with equity venture capital firms to identify these companies, generally after their initial round of equity financing from established venture capital companies, to determine their capacity and suitability for asset based financing and to structure financing solutions appropriate for the customer and its asset acquisition and other financing needs, and consistent with the Fund’s investment objectives. The Manager will seek to identify potential customers which are at an early enough stage in their capitalization to require “growth capital acquisition financing” solutions, but which demonstrate the potential to both satisfy their financing terms and provide attractive equity participation to the Fund as additional consideration for providing the needed financing. The Manager will also seek to identify more mature, privately-held companies that seek creative financing solutions.

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The Fund may acquire Equity Interests in conjunction with providing acquisition and/or other financing to the issuer of the Equity Interests, including leases and loans to the issuer or to a parent, subsidiary or affiliate of the issuer of Equity Interests. In many cases, the Fund expects to acquire Equity Interests, such as warrants and options to purchase securities, in consideration of its acquisition financing and without any other cash investment by the Fund at the time it acquires such rights (such rights granted as part of the financing transaction are referred to in the following paragraph as “warrant coverage”). In such cases, cash investment by the Fund would be made upon exercise of the rights, and the Fund expects to use operating cash flow to fund such exercises.

In other cases, the Fund may obtain the right to make a direct cash investment in the customer’s securities at the time the financing is provided, for which the Fund would use proceeds from the offering of Units. These direct equity investments may be made in conjunction with a financing transaction with the issuer, but the Fund may also acquire equity investments directly from an issuer, independent of any financing transaction with the issuer, when it identifies an appropriate and desirable investment opportunity not involving an acquisition financing transaction. The aggregate cost of Equity Interests acquired directly by the Fund for cash (that is, excluding warrant coverage or any Equity Interests acquired upon the exercise of warrants or options to purchase Equity Interests) will not exceed 10% of the aggregate cost to the Fund of its portfolio of financing transaction investments as of the final investment of net offering proceeds. This limitation on direct purchases is in addition to any warrant coverage and is not a limitation on warrant coverage or on the amount of securities the Fund may acquire upon exercise of warrants or options to purchase securities.

The Fund will be engaged in the business of providing commercial loans to its customers and will primarily be engaged in providing financing to customers who are prospective purchasers of specified equipment and other capital assets, so would be excluded from the definition of “investment company” under the Investment Company Act of 1940 (the “1940 Act”). In order to further assure that the Fund will not be deemed an “investment company” as defined in Section 3(a)(1) of the 1940 Act, the Fund (i) will not engage or hold itself out to be engaged primarily in the business of investing, reinvesting or trading in securities; (ii) will not engage in the business of issuing face amount certificates of the installment type; and (iii) will take such reasonable steps as may be practicable to limit the value of any investment securities held by the Fund to not more than 30% of the value of the Fund’s total assets at all times.

General Policies

The Fund intends to finance the acquisition of various types of equipment and other capital assets and merchandise needed in its customers’ businesses. See the discussion below under “Types of Equipment” for a description of the types of equipment and other capital assets expected to be acquired by Fund customers with its financing, and expected to serve as collateral securing Fund financing. Generally, the Fund expects to finance newly-manufactured equipment. However, the Fund may also finance desirable used equipment and equipment subject to pre-existing financing transactions under appropriate circumstances and where consistent with the Fund’s overall investment objectives and limitations. In addition, some portion of the Fund’s portfolio may be general working capital loans secured by liens on some or all of the borrower’s assets.

In evaluating potential financing for emerging growth companies, the Fund’s management will analyze the potential customer’s currently available capital, the number and quality of other capital sources, including the identity and commitment of existing equity investors, the “burn rate” or rate at which the company is currently using its cash resources, the company’s current stage of development and the anticipated period required for the company to achieve profitability and/or an initial public offering, or to become a desirable target for acquisition by another existing public or private company. Fund management will attempt to structure financing terms which take into consideration the potential risks involved in financing a company. Depending on the company’s prospects, the Fund will offer shorter or longer terms for repayment and higher or lower financing rates. Generally, the Fund will seek terms which provide for a return of principal plus a rate of return on invested capital consistent with the risk involved in the financing. There can be no assurance, however, that the Fund’s assumptions will be accurate or that its objectives will be achieved.

A number of factors will determine the actual composition of the Fund’s financing transaction portfolio; for example, the amount of Gross Proceeds actually received prior to the termination of the offering will be a

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significant factor in determining the Fund’s ability to diversify its portfolio. Furthermore, the Manager cannot anticipate what types of financing transactions will be available and at what prices and terms at the time a Fund is ready to invest its offering proceeds. In structuring loans and leases, the Fund’s objectives will vary based on the terms of the proposed financing transaction, the credit quality of the customer and prevailing financial market conditions. The Manager will commit to a particular financing transaction only if it believes that, in the context of the Fund’s overall portfolio, the transaction will contribute to the satisfaction of the Fund’s investment objectives.

As set forth above under “Principal Investment Objectives,” it will be the Fund’s objective to reinvest in additional financing transactions any Fund cash flow remaining after payment of expenses, debt service and certain minimum Distributions during the Reinvestment Period. The Fund will not acquire any new portfolio investments after its Reinvestment Period, except to the extent necessary to satisfy investment commitments identified prior to the end of the Reinvestment Period or to preserve the value of investments already owned at such time.

Other than as set forth below or in any supplement to this Prospectus, the Fund has not invested in or committed to purchase any financing transactions, and, as a result, there can be no assurance as to when the Net Proceeds from the Fund’s offering will be fully invested. Furthermore, prospective investors may not have an opportunity prior to investing to evaluate all of the Fund’s investments.

The Manager or an Affiliate may acquire financing investments in its own name, the name of an Affiliate or the name of a nominee, a trust or otherwise and hold title to the investment on a temporary or interim basis (generally not in excess of six months) for the purpose of facilitating the acquisition of the investment by the Fund or for any other purpose related to the business of the Fund; provided, however that: (i) the transaction is in the best interest of the Fund; (ii) the investment is purchased by the Fund for a purchase price no greater than its cost to the Manager or Affiliate (including any out-of-pocket carrying costs), except for compensation permitted by the Operating Agreement; (iii) there is no difference in interest terms of the loans secured by the transaction at the time acquired by the Manager or Affiliate and the time acquired by the Fund; (iv) there is no benefit arising out of such transaction to the Manager or its Affiliate apart from the compensation otherwise permitted by the Operating Agreement; and (v) all income generated by, and all expenses associated with, a transaction so acquired shall be treated as belonging to the Fund.

Finance Portfolio Transaction Structures

The Fund will provide acquisition financing for third parties primarily pursuant to secured loans with fixed periodic installment obligations for payment of interest and amortization of principal. The Fund may also finance equipment and other capital assets for its customers through finance leases which are structured as leases, but which are treated as installment loans for tax purposes, as well as through net leases requiring fixed periodic lease payment installments. The Fund will also provide certain borrowers with working capital financing secured by liens on all or part of the borrowers’ assets. All Fund financing investments will provide for regular scheduled payments by the financing customer over the term of the financing transaction in aggregate amounts in excess of the principal amount of the financing extended by the Fund. The Fund will nevertheless be subject to the risk that the financing customer may not fully perform its obligations.

The Fund expects to secure its financial transactions with equipment and other goods purchased with the loan proceeds as the collateral. In a secured loan agreement, the Fund would be the lender and the owner of the collateral would be the borrower. The Manager will attempt to structure these transactions so that the payments of principal and interest, will return the acquiring Fund’s investment and provide a desirable rate of return on investment in view of the associated financing risks. In addition, any Equity Interests acquired in connection with the loan may enhance the overall return to the Fund from the financing transaction. A “finance” lease is a transaction structured as a lease, but which is characterized as a loan for tax and accounting purposes, with the borrower retaining all of the tax consequences of the ownership of the asset financed.

In secured loans, the Fund will have a security interest in any equipment and other goods financed in the transaction, as well as receivables and proceeds under any loan or finance lease agreement relating to the financed assets. Collateral for the Fund’s secured loan transactions may also include the borrower’s receivables

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or its other tangible or intangible assets, to the extent the grant of collateral interests in such assets are not limited by the terms given to senior or other lenders. The Fund’s security interest may be a senior lien on the financed assets, providing the Fund with the right, on any default under the financing arrangement, to foreclose on the assets that are collateral, and to take possession and or sell the assets in order to satisfy the borrower’s obligation. The Fund may also provide financing as a junior or subordinate lender under appropriate circumstances. In such cases, the Fund’s right to enforce its obligations against the collateral would be subject to the priority of any senior lender’s rights.

The Fund expects to invest a portion of its proceeds in term loans to provide working capital funds to emerging growth companies. The structure and collateral for such loans generally includes a blanket lien on all of the borrowing company’s assets including, but not limited to, capital equipment, accounts receivable, cash in depository accounts, short term investment accounts and any other tangible assets. In some cases the Fund may have a lien on the borrower’s intellectual property, but in other cases the borrower may be permitted to exclude its intellectual property rights from the collateral granted the Fund if granting a lien against its intellectual property would conflict with the rights of other current or future lenders, equity investors or business partners. If the Fund does not receive a lien on a borrower’s intellectual property, then the borrower will generally be required to enter into a negative covenant with the Fund under which it is prohibited from pledging, selling or otherwise liquidating its intellectual property without appropriate compensation to the Fund for the borrower’s outstanding obligations.

In formulating a financing package for a prospective customer, the Manager will consider the following factors, among others: the business of the customer; the current capital resources of the customer and its prospects for future capitalization; the current rate of capital usage and the anticipated period of time prior to the customer achieving profitability; its prospects for significant capital growth and the potential for growth in value of any Equity Interests to be included in the transaction; the cost of alternative financing; competitive pricing factors; the type of assets to be financed and its collateral value; and other market factors. The initial financing transaction terms will vary as to the type of transaction, but will generally be for 24 months to 36 months, but may be of greater or shorter duration in the Manager’s discretion.

Types of Equipment

The Fund intends to provide acquisition and other financing to a number of different types of emerging growth capital customers. The following is a general description of the various types of assets which the Fund may finance for these customers. The types of equipment are listed in alphabetical order, and the discussion is not intended to imply any order of emphasis in the Fund’s acquisition policies. The final mix of equipment types financed by the Fund and used as collateral for the Fund’s portfolio will depend on the factors discussed above under “General Policies.”

Computer and Computer-related High Technology Equipment.  This type of equipment includes a variety of items including:

Small Computer Systems, Personal Computers and Workstations.  Small computer systems and personal computers are used alone or in networks by a variety of businesses for various functions, including accounting, sales management, administration and inventory control. Workstations are generally high performance engineering and design systems that are more complex than small computer systems and personal computers.

CAE/CAD/CAM Equipment.  Computer aided engineering, design and manufacturing systems housing advanced computer and communications technologies and sophisticated product data management software.

Networking Equipment.  Switches, routers, servers and other equipment used to link personal computers and workstations in local area and wide area networks.

Electronic Testing Equipment.  Electronic testing equipment includes a variety of types of equipment used to measure and test products by manufacturers and end-users.

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Furniture, Fixtures and Equipment.  Plant/office equipment, furniture and fixtures includes racking, shelving, storage bins, portable steel storage sheds, furniture, fixtures, tables, counters, desks, chairs, cabinets and numerous other items generally used in manufacturing plants, storage and distribution facilities and offices.

Manufacturing Equipment.  Manufacturing equipment includes a wide variety of machinery used in a variety of manufacturing applications in high technology manufacturing processes, such as equipment used in the production of semi-conductors, solar power and other green technology products and equipment, as well as more traditional manufacturing equipment, such as lathes, drilling presses, turning mills, grinders, metal bending equipment, metal slitting equipment and other metal forming equipment used in the production of a variety of machinery and equipment. While some manufacturing equipment is built for a particular end product, the majority can be used in a variety of applications.

Medical Equipment.  Medical equipment includes a wide variety of testing and diagnostic equipment including:

Radiology Equipment.  This category includes x-ray equipment, CAT and MRI scanners (i.e., body and head scanners) and other equipment to be used in the radiology departments of hospitals and clinics.

Laboratory Equipment.  This category includes blood analysis equipment and other automated medical laboratory equipment.

Other Medical Equipment.  This general category includes equipment using ultrasound technology, patient monitoring systems and a variety of other equipment used in hospitals, clinics and medical laboratories.

Photocopying Equipment.  This category includes photocopying and other document duplicating or reproduction equipment.

Research and Experimentation Equipment.  Research and experimentation equipment include various types of analyzers, spectrometers, oscilloscopes, measuring instruments, gas and liquid chromatographs, physical testing centrifuges, graphic plotters and printers, laser equipment, digital-aided design systems, scanning electron microscopes, dissolution sampling systems, and other general laboratory instruments and equipment used in businesses for the development of ongoing research programs.

Telephone and Telecommunications Equipment.  Communications equipment is used for voice and data transmission. Its applications include, but are not limited to, telephone communication, radio and television broadcasting, cable television, and satellite communications. The Fund may acquire and lease communications equipment including telephone equipment and systems, data communication terminals, cables, transmission wires, transmitters, control and amplification equipment, repeaters, monitoring equipment, teleprinters, connector and switching equipment, satellite and microwave transmission facilities and support equipment.

Miscellaneous Equipment.  The Fund may also provide financing for various other types of equipment, including, but not limited to, graphic processing equipment, trucks, automobiles and other motor vehicles, video projection and production equipment, store fixtures, display cases, freezers and equipment used in production facilities.

The Equity Interests

As discussed above, the Fund may acquire equity interests and warrants and rights to purchase equity interests (the “Equity Interests”) in conjunction with its financing of the acquisition of equipment and other goods and services for its customers, and may also acquire Equity Interests directly in transactions not involving acquisition financing. In connection with acquisition financing transactions, the Fund will negotiate the acquisition from the customers, or their parents or affiliates, rights to purchase the equity securities of such entities, or, in some cases, the securities themselves. As described elsewhere in this Memorandum, the Fund will seek to identify customers which, though not yet publicly held and not investment grade credits, are nevertheless strong companies with prospects for substantial growth. By acquiring Equity Interests, the Fund will seek to generate a portion of its investment returns through capital gains generated by the growth in the value of the equity capital of the entities issuing the Equity Interests. The Equity Interests may be in the form

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of warrants or options to purchase equity securities, common shares, preferred shares, convertible equity, convertible debt, or any other form of interest which is structured to give the Fund the right to benefit from growth in the market value of the customer’s equity capital. At some time in the future, typically at the time of, or soon after, the customer’s equity securities become publicly registered or tradable, or the underlying securities otherwise become liquid, generally through an initial public offering, merger, stock sale, sale of assets or other reorganization or major capital transaction, the Fund would expect to exercise its equity rights, acquire the publicly-traded securities and seek to dispose of the securities at a profit. Similarly, the Fund would seek to dispose of Equity Interests acquired as direct equity investments when the Equity Interests became publicly traded or otherwise become liquid and disposition is deemed prudent in light of the Fund’s overall investment objectives.

The Fund’s management will determine when and whether to exercise rights to convert or acquire securities subject to the equity rights. To exercise warrant or option rights, the Fund will pay an exercise price, which may be financed out of the disposition proceeds to be realized upon an immediate resale of the purchased securities. There can be no assurance that the issuers of the Equity Interests will achieve capital growth and that the Equity Interests will generate any profit, or that such growth and profits will be achieved during the Fund’s anticipated holding period.

Borrowing Policies

The Fund will not borrow to acquire its Portfolio Assets and does not intend or expect to incur any indebtedness. The Fund anticipates that it would incur indebtedness only in the event that it is required to borrow for temporary working capital purposes. It may also engage in short term borrowing against committed cash flow due on its investments in order to provide an even rate of distributions and resulting capital account adjustments during its offering period. The Fund has no arrangements or commitments from any lender with respect to any such borrowing, however, and there can be no assurance that it will engage in any such borrowing. Although the Operating Agreement does not prohibit the Manager or its Affiliates from lending to the Fund, the Fund does not have any intention or arrangements to borrow from such Persons. In the event that any such borrowing is incurred, the terms may not permit the Manager or any Affiliate to receive a rate of interest or other terms which are more favorable than those generally available from commercial lenders under the circumstances. In no event may the Manager or its Affiliates provide financing to the Fund with a term in excess of twelve months.

Description of Customers

The Fund’s objective is to finance the acquisition of equipment and other goods and services by venture capital financed emerging growth companies and privately held companies which generally do not have publicly-traded securities. These customers will typically not have a substantial operating history or a history of profitability. These types of companies might not have access to customary bank or lease financing on reasonable terms. Because these customers will not have the credit quality of more established companies, the Fund expects in certain cases to negotiate and obtain rights to purchase Equity Interests as part consideration for the financing transactions. The Fund’s objective is to realize capital gains from the ownership of these rights and Equity Interests. Accordingly, the Manager will seek to identify customers that it believes have adequate existing capital, venture capital commitments or prospects or other capital resources to finance operations, including the payments on the Fund’s financing investments, through the date the loan agreement or lease is to be fully performed. Such judgments are inherently subjective, however, and there can be no assurance that the Fund might not experience defaults if the customer’s success is delayed or the company fails. In analyzing the acquisition financing opportunities for investment by the Fund, the Manager will seek transactions which contribute to an overall portfolio in which the rates of return and Equity Interests granted by the customers, when offset by anticipated levels of default, provide desirable rates of return on investments in the Units.

Competition

In obtaining customers, the Fund will compete with commercial banks and lenders, other acquisition financing firms, venture capital investors and with established leasing and finance companies. There are numerous other potential entities, including entities organized and managed similarly to the Fund, seeking to

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finance equipment, many of which have greater financial resources and growth capital acquisition financing experience than the Fund’s management. Capital investment in emerging growth companies recovered following market declines in the years 2000 to 2002, and grew through 2006. Emerging growth capital investment declined from 2008 through 2009, then increased moderately since 2009, but has not recovered to pre-2000 levels and future trends are difficult to predict. Nevertheless, the Fund expects significant competition for quality investments through its acquisition and reinvestment stages.

Joint Venture Investments

The Fund may purchase certain of its Portfolio Assets by acquiring a controlling interest in a partnership, trust or other form of joint venture with a non-Affiliate, organized to make the investment. The controlling interest requirement may be satisfied by ownership by the Fund, alone or with commonly controlled Fund Affiliates, of more than 50% of the venture’s capital or profits or from provisions in the governing agreement giving the Fund certain basic rights. For example, control may take the form of the right to make or veto certain management decisions or provide for certain predetermined benefits for the Fund in the event that any other party to the venture should decide to sell or change the assets owned by the venture.

The Fund may not otherwise acquire investments jointly with others unless:

(i) the joint venture agreement does not authorize or require the Fund to do anything with respect to the investment that the Fund, or the Manager, could not do directly because of the policies set forth in the Operating Agreement, and

(ii) the transaction does not result in payment of duplicate fees.

The Fund may also acquire Portfolio Assets by joint venture or as co-owner with an Affiliate if the following conditions are met:

(i) the Affiliate will be required to have substantially identical investment objectives to those of the Fund;

(ii) there are no duplicate fees;

(iii) the Affiliate must make its investment on substantially the same terms and conditions as the Fund;

(iv) the Affiliate must have a compensation structure substantially identical to that of the Fund;

(v) the venture must be entered into in order to obtain diversification or to relieve the Manager or Affiliates from commitments entered into on a temporary or interim basis for the purpose of facilitating the acquisition or financing of such Portfolio Assets by the Fund or another affiliated program; and

(vi) the Fund has a right of first refusal should an affiliated co-venturer decide to dispose of the investment owned by the venture.

Because both the Fund and its Affiliate will be required to approve decisions pertaining to the investment, a management impasse may develop. In some joint venture agreements, if one party, but not the other, wishes to sell the investment, the party not desiring to sell will have a right of first refusal to purchase the other party’s interest in the investment. The Fund may not, however, be able to exercise its right of first refusal unless it has the financial resources to do so, and there can be no assurances that it will.

General Restrictions

The Fund will not: (i) issue any Units after the Fund’s Final Closing Date or issue Units in exchange for property, (ii) make loans to the Manager or its Affiliates, (iii) underwrite the securities of other issuers, (iv) operate in such a manner as to be classified as an “investment company” for purposes of the Investment Company Act of 1940, (v) except as set forth herein, purchase any investment from nor sell or lease assets to the Manager or its Affiliates, or (vi) except as expressly provided herein, grant the Manager or any of its

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Affiliates any rebates or give-ups or participate in any reciprocal business arrangements with such parties which would circumvent the restrictions in the Operating Agreement, including the restrictions applicable to transactions with Affiliates. See Article 15 of the Operating Agreement for a description of additional investment limitations.

The Manager and its Affiliates, including their officers and directors, may engage in other businesses or ventures that provide acquisition financing, growth capital financing, and that otherwise involve ownership, financing, leasing, operating, managing or brokering equipment, as well as businesses unrelated to acquisition financing. See “Conflicts of Interest,” “Management Compensation” and “Management.”

Changes in Investment Objectives and Policies

Unit Holders have no voting rights with respect to the establishment or implementation of the investment objectives and policies of the Funds, all of which are the responsibility of the Manager. However, the Manager cannot make any material changes in the investment objectives and policies described above without first obtaining the written consent or approval of Members of the Fund owning more than 50% of the Fund’s total outstanding Units entitled to vote.

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CONFLICTS OF INTEREST

The Fund is subject to various conflicts of interest arising out of its relationship with the Manager and Affiliates of the Manager. These conflicts include, but are not limited to, the following:

The Manager engages in other, potentially competing, activities.  The Manager serves in the capacity of manager or general partner in other public and private programs engaged in the asset finance and equipment leasing businesses, and it and its Affiliates also engage in the business of acquiring financing transactions, purchasing and selling equipment and arranging leases and loans for their own account and for the accounts of others. The Manager will have conflicts of interest in allocating management time, services and functions among the prior programs, the Fund, any future investment programs and activities for its own account. The Manager believes that it has or can employ sufficient staff, equipment and other resources to discharge fully their responsibilities to each such activity. This conflict results in a potential benefit to the Manager and its Affiliates by permitting them to make more efficient use of their personnel and resources, but may impose a burden on them by requiring the Manager and its Affiliates to maintain sufficient staff to discharge their responsibilities to all parties.

Competition for Investments.  The Manager and its Affiliates will have conflicts of interest to the extent that prior or future investment programs or investments for their own account may compete with the Fund for opportunities in the acquisition of portfolio assets. Prior programs currently in operation and expected to acquire, to a limited extent, growth capital investments, include: ATEL Capital Equipment Fund X, LLC; ATEL Capital Equipment Fund XI, LLC; ATEL 12, LLC; ATEL 14, LLC and ATEL 15, LLC; and prior private programs currently in operation and expected to continue to acquire growth capital investments include ATEL Growth Capital Fund IV, LLC; ATEL Growth Capital Fund V, LLC; and ATEL Growth Capital Fund VI, LLC. These prior programs may have funds available for investment in additional transactions at a time when the Fund is also active in seeking to invest or reinvest in such transactions. Certain of the investments owned and to be acquired by these and other prior programs and the Fund may be similar and may be purchased from the same sellers or involve the same customers. Furthermore, the Manager and its Affiliates may acquire similar investments for their own accounts and may in the future form additional investment programs having similar objectives, and accordingly, the Fund may be in competition with any such future programs formed by the Manager.

Any time two or more investment programs (including the Fund) affiliated with the Manager have capital available to acquire the same types of investments, conflicts of interest may arise as to which of the programs should proceed to acquire available transactions. In such situations, the Manager will analyze the portfolio assets already purchased by, and investment objectives of, each program involved, and will determine which program will purchase the new transaction based upon such factors, among others, as:

(i) the amount of cash available in each program for such acquisition and the length of time such funds have been available,

(ii) the current and long-term liabilities of each program,

(iii) the effect of such acquisition on the diversification of each program’s investment portfolio,

(iv) the estimated income tax consequences to the investors in each program from such acquisition, and

(v) the cash distribution objectives of each program.

If after analyzing the foregoing and any other appropriate factors, the Manager determines that such acquisition would be equally suitable for more than one program, then the Manager will purchase the transaction for the programs on the basis of rotation with the order of priority determined by the length of time each program has had funds available for investment, with the available transactions allocated first to the program that has had funds available for investment the longest. This potential conflict may represent a benefit to the Manager and its Affiliates as the availability of a number of different investment programs may permit the Manager to more aggressively seek leasing transactions which may be suitable for a variety of portfolios. It may also result in difficulty in determining which program will participate in which transactions.

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The Manager and Affiliates will receive substantial fees and other compensation.  Fund operations will result in certain compensation to the Manager and its Affiliates. The Manager has absolute discretion in all decisions on Fund operations. Because the amount of such fees may depend, in part, on the debt structure and the timing of these transactions, the Manager and its Affiliates may have conflicts of interest. In all cases where the Manager or its Affiliate may have a conflict of interest in determining the terms or timing of a transaction by the Fund, the Manager or its Affiliate will exercise its discretion strictly in accordance with its fiduciary duty to the Fund and the Holders. The ability to determine the amount or timing of a transaction could nevertheless be a benefit to the Manager and increase the costs incurred by the Fund.

Agreements are not Arm’s-Length.  Agreements between the Fund and the Manager or any of its Affiliates are not the result of arm’s-length negotiations and performance by the Manager and its Affiliates will not be supervised or enforced at arm’s-length. This is a benefit to the Manager, as it has unilaterally determined the terms of such agreements. It could be adverse to the interests of Unit holders, as they will not have the opportunity to negotiate terms or change terms of such agreements.

No independent managing underwriter has been engaged for the distribution of the Units.  ATEL Securities Corporation is an Affiliate of the Manager and will perform wholesaling services for the Fund as the Dealer Manager. It may not be expected to have performed due diligence in the same manner as an independent broker-dealer. The Dealer Manager has acted in the same capacity in prior offerings sponsored by the Manager and its Affiliates and is expected to do so in any future offerings that the Manager and its Affiliates may conduct.

The Fund, the Manager and prospective Holders have not been represented by separate counsel.  In the formation of the Fund, drafting of the Operating Agreement and the offering of Units, the attorneys, accountants and other professionals who perform services for the Fund all perform similar services for the Manager and its Affiliates. The Fund expects that this dual representation will continue in the future. However, should a dispute arise between the Fund and the Manager, the Manager will cause the Fund to retain separate counsel.

The Fund may enter into joint ventures with programs managed by the Manager or its Affiliates.  The Manager may face conflicts of interest as it may control and owe fiduciary duties to both the Fund and the affiliated co-venturer. For example, because of the differing financial positions of the co-venturers, it may be in the best interest of one entity to sell the jointly-held investments at a time when it is in the best interest of the other to hold the investment assets. Nevertheless, these joint ventures are restricted to circumstances whereby the co-venturer’s investment objectives are comparable to the Fund’s, the Fund’s investment is on substantially the same terms as the co-venturer and the compensation to be received by the Manager and its Affiliates from each co-venturer is substantially identical.

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FIDUCIARY DUTY OF THE MANAGER

The Manager is accountable to the Fund as a fiduciary and, consequently, is required to exercise good faith and integrity in all dealings with respect to Fund affairs.

Under California law and subject to certain conditions, a Member may file a lawsuit on behalf of the Fund (a derivative action) to recover damages from a third party or to recover damages resulting from a breach by a Manager of its fiduciary duty. In addition, a Member may sue on behalf of himself and all other Members (a class action) to recover damages for a breach by a Manager of its fiduciary duty, subject to class action procedural rules. This area of the law is complex and rapidly changing, and investors who have questions regarding the duties of a Manager and the remedies available to Members should consult with their counsel. The Operating Agreement does not modify the Manager’s fiduciary duty under California law.

The Operating Agreement does not excuse the Manager from liability or provide it with any defenses for breaches of its fiduciary duty. However, the fiduciary duty owed by a Manager is similar in many respects to the fiduciary duty owed by directors of a corporation to its Unit holders, and is subject to the same rule, commonly referred to as the “business judgment rule,” that directors are not liable for mistakes in the good faith exercise of honest business judgment or for losses incurred in the good faith performance of their duties when performed with such care as an ordinarily prudent person would use. As a result of the business judgment rule, a manager may not be held liable for mistakes made or losses incurred in the good faith exercise of reasonable business judgment. Accordingly, provision has been made in the Operating Agreement that the Manager has no liability to the Fund for losses arising out of any act or omission by the Manager, provided that the Manager determined in good faith that its conduct was in the best interest of the Fund and, provided further, that its conduct did not constitute fraud, negligence or misconduct. As a result, purchasers of Units may have a more limited right of action in certain circumstances than they would in the absence of such a provision in the Operating Agreement specifically defining the Manager’s standard of care.

The Operating Agreement also provides that, to the extent permitted by law, the Fund is to indemnify the Manager and its Affiliates providing services to the Fund against liability and related expenses (including attorneys’ fees) incurred in dealings with third parties, provided that the conduct of the Manager is consistent with the standards described in the preceding paragraph. A successful claim for such indemnification would deplete Fund assets by the amount paid. The Manager will not be indemnified against any liabilities arising under the Securities Act of 1933. In addition, the Fund will not pay for any insurance covering liability of the Manager or any other persons for actions or omissions for which indemnification is not permitted by the Operating Agreement.

Subject to the fiduciary relationship, the Manager has broad discretionary powers to manage the affairs of the Fund under the terms of the Operating Agreement and under California law. Generally, actions taken by the Manager are not subject to vote or review by the Holders, except to the limited extent provided in the Operating Agreement and under California law.

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MANAGEMENT

The Manager

The Manager is AGC 8 Managing Member, LLC (the “Manager”). The Manager was formed as a Nevada limited liability company in 2011. The sole member of the Manager is ATEL Management Services, LLC (“AMS”), a subsidiary of its sole member, ATEL Capital Group LLC (“ACG”). The ATEL affiliated group of companies was founded upon the incorporation of the original leasing business in 1977, and the affiliated group was reorganized under the parent company, ATEL Capital Group, in 2001. ATEL Capital Group, the Manager and their Affiliates are sometimes collectively referred to below as “ATEL” for convenience. ATEL’s and the Manager’s offices are located at 600 California Street, 6th Floor, San Francisco, California 94108, and its telephone numbers are 415/989-8800 and 800/543-ATEL. ATEL’s officers have extensive experience with transactions involving the acquisition, leasing, financing and disposition of equipment and other financing transactions, as more fully described below and in Exhibit A hereto. The Fund itself will have no employees, but will use the services of ATEL and its Affiliates and their employees to fulfill the Fund’s administrative and operating needs. AGC 8 Managing Member, LLC is the Fund’s initial Member and, together with its parent entities, AMS and ACG, founded and organized the Fund.

Since its organization in 1977, ATEL has been active in several areas within the equipment leasing and capital asset finance industry, including: (i) originating and financing leveraged and single investor lease transactions for corporate investors, (ii) acting as a broker/packager by arranging equity and debt participants for equipment lease transactions originated by other leasing companies, (iii) consulting on the pricing and structuring of equipment lease transactions for banks, leasing companies and corporations, and (iv) originating asset acquisition and other financing transactions for, and an investing in, venture capital financed “growth capital” companies.

ATEL Management Services, LLC (“AMS”) is a subsidiary of ATEL Capital Group LLC (“ACG”), its sole member. ATEL Ventures, Inc. (“AVI”) is ATEL’s originating affiliate for venture and growth capital transactions. Each of AMS and AVI is a wholly-owned subsidiary of ACG and ATEL Capital Group, respectively. ATEL Investor Services (“AIS”) is a division of ATEL Financial Services, LLC (“AFS”). AFS, AIS and AVI will perform services for the Fund under the direction of the Manager. AVI will perform financing origination and management services for the Fund; and AFS and AIS will perform partnership management, administration and investor services. Finally, the Dealer Manager, ATEL Securities Corporation (“ASC”), is a wholly-owned subsidiary of AFS. ACG is responsible for all aspects of the performance by its affiliates of services necessary to the operation of the Fund and for the facilities, personnel, equipment, financial and other resources used by its affiliates in the performance of those services.

The officers and directors of ACG and its Affiliates are as follows:

 
Name   Positions
Dean L. Cash   Chairman of the Board, President and Chief Executive Officer — the Manager, ACG, AMS, AFS, AVI and AEC; Director, President and Chief Executive Officer of AIS and ASC
Paritosh K. Choksi   Director, Executive Vice President, Chief Financial Officer and Chief Operating Officer — the Manager, ACG, AMS, AFS, AIS and AVI
Vasco H. Morais   Executive Vice President and General Counsel — ACG, AMS, AFS, AIS and AVI
Steven R. Rea   Executive Vice President — AVI
Russell H. Wilder   Executive Vice President — Chief Credit Officer — ACG, AMS, AFS and AVI
Samuel Schussler   Vice President and Chief Accounting Officer — the Manager, ACG, AMS, AFS, AVI and AIS

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Dean L. Cash, age 61, became chairman, president and chief executive officer of ATEL in April 2001. Mr. Cash joined ATEL as director of marketing in 1980 and served as a vice president since 1981, executive vice president since 1983 and a director since 1984. He has been a director of the Dealer Manager since its organization and its president since 1986. Prior to joining ATEL, Mr. Cash was a senior marketing representative for Martin Marietta Corporation, data systems division, from 1979 to 1980. From 1977 to 1979, he was employed by General Electric Corporation, where he was an applications specialist in the medical systems division and a marketing representative in the information services division. Mr. Cash was a systems engineer with Electronic Data Systems from 1975 to 1977, and was involved in maintaining and developing software for commercial applications. Mr. Cash received a B.S. degree in psychology and mathematics in 1972 and an M.B.A. degree with a concentration in finance in 1975 from Florida State University. Mr. Cash is an arbitrator with the American Arbitration Association and is qualified as a registered principal with FINRA.

Paritosh K. Choksi, age 58, joined ATEL in 1999 as a director, senior vice president and its chief financial officer, and has been its chief financial officer, executive vice president and chief operating officer since April 2001. Prior to joining ATEL, Mr. Choksi was chief financial officer at Wink Communications Inc. from 1997 to 1999. From 1977 to 1997, Mr. Choksi was with Phoenix American Incorporated, a financial services and management company, where he held various positions during his tenure, and was senior vice president, chief financial officer and director when he left the company. Mr. Choksi was involved in all corporate matters at Phoenix and was responsible for Phoenix’s capital market needs. He also served on the credit committee overseeing all corporate investments, including its growth capital lease portfolio. Mr. Choksi was part of the executive management team which caused Phoenix’s portfolio to grow from $50 million in assets to over $2 billion. Mr. Choksi has served as a member of the board of directors of Syntel, a public company, since 1997. Mr. Choksi received a Bachelor of Technology degree in mechanical engineering from the Indian Institute of Technology, Bombay in 1975; and an M.B.A. degree from the University of California, Berkeley in 1977.

Vasco H. Morais, age 54, joined ATEL in 1989 as general counsel. Mr. Morais manages ATEL’s legal department, which provides legal and contractual support in the negotiating, drafting, documenting, reviewing and funding of lease transactions. In addition, Mr. Morais advises on general corporate law matters, and assisting on securities law issues. From 1986 to 1989, Mr. Morais was employed by the BankAmeriLease Companies, Bank of America’s equipment leasing subsidiaries, providing in-house legal support on the documentation of tax-oriented and non-tax oriented direct and leveraged lease transactions, vendor leasing programs and general corporate matters. Prior to the BankAmeriLease Companies, Mr. Morais was with the Consolidated Capital Companies in the Corporate and Securities Legal Department involved in drafting and reviewing contracts, advising on corporate law matters and securities law issues. Mr. Morais received a B.A. degree in 1982 from the University of California in Berkeley; a J.D. degree in 1986 from Golden Gate University Law School; and an M.B.A. (Finance) degree from Golden Gate University in 1997. Mr. Morais, an active member of the State Bar of California since 1986, served as co-chair of the Uniform Commercial Code Committee of the Business Law Section of the State Bar of California and was inducted as a fellow of the American College of Commercial Finance Lawyers in 2010.

Steven R. Rea, age 43, joined ATEL in 2000 and serves as executive vice president of ATEL Ventures, Inc. Prior to joining ATEL, Mr. Rea was employed at Imperial Bank (now Comerica) from 1999 to 2000, where he managed the venture leasing department for the emerging growth division. From 1997 to 1999, Mr. Rea was employed at LINC Capital, Inc., a specialty finance and venture leasing company, where he was responsible for originating, structuring and negotiating equipment leasing and other asset-backed financing for emerging growth companies. From 1994 to 1997, Mr. Rea was an account executive and later vice president of business development at Interlease Group Ltd., a diversified financial services company, specializing in financings for venture backed companies. From 1992 to 1994, Mr. Rea was with Automatic Data Processing as a senior district sales manager. Mr. Rea received a B.S. degree in finance from San Diego State University in 1991.

Russell H. Wilder, age 57, joined ATEL in 1992 as vice president of ATEL Business Credit, Inc. and in 1995 became its senior vice president of operations. He has also served as chief credit officer to ATEL Financial Corporation since October 1992. From 1990 to 1992 Mr. Wilder was a personal property broker specializing in equipment leasing and financing and an outside contractor in the areas of credit and

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collections. Prior to 1990, Mr. Wilder had numerous assignments in the credit and operations departments for small, mid-size and big ticket lease transactions with Westinghouse Credit, Wells Fargo Leasing and Fireside Thrift Co., a Teledyne subsidiary. Mr. Wilder holds a BS with Honors in Agricultural Economics and Business Management from the University of California at Davis. He has been awarded the Certified Lease Professional designation by the United Association of Equipment Lessors.

Samuel Schussler, age 59, was appointed chief accounting officer of ATEL Capital Group and its affiliates in August 2006. Mr. Schussler served as senior vice president — finance for Velocity Express Corporation, Westport, Connecticut, from 2004 through March of 2006, and was employed as an independent financial consultant from March 2006 through August 2006. From 2001 through 2003, he served as chief operating officer and chief financial officer of New Century Packaging LLC in Scottsdale, Arizona. From 1999 through 2001, Mr. Schussler served as vice president — finance and chief financial officer of Biogenix Laboratories, Inc. in San Ramon, California. Mr. Schussler received his B.B.A. in Accounting Practice from Pace University  — New York in 1974, and his M.B.A. in Finance from the New York University Graduate School of Business Administration in 1977. He was granted licensure as a C.P.A. in New York and in Arizona.

Management of the Fund’s Operations and Administration

An Affiliate of the Manager, ATEL Ventures, Inc., will have primary responsibility for selecting and negotiating potential financing transactions, and managing the Fund’s Portfolio Assets subject to the Manager’s supervision and approval. The Manager’s Growth Capital Investment Committee will approve any acquisition before it is consummated. The Growth Capital Investment Committee currently consists of Dean L. Cash, Paritosh K. Choksi and Russell H. Wilder.

Management services to be provided by AVI include acting as a liaison with customers, general supervision of customers to ensure compliance with the terms of asset financings, arranging for maintenance and related services with respect to any collateral taken by the Fund, and the supervision, monitoring and review of others performing services for the Fund.

AFS will be primarily responsible for Fund administration and reporting. AFS will be responsible for the design and operation of the Fund’s disclosure controls and procedures to comply with federal securities law reporting requirements, and will be responsible for performing periodic evaluations of these controls and procedures.

Management Compensation

The Fund does not pay the officers or directors of the Manager or its Affiliates any compensation. However, the Fund will pay the Manager and its Affiliates the fees and other compensation described under “Management Compensation” above in this Prospectus. Furthermore, the Fund will reimburse the Manager and its Affiliates for certain costs incurred on behalf of the Fund, including the cost of certain personnel (excluding controlling persons of the Manager) who will be engaged by the Manager to perform administrative, accounting, secretarial, transfer and other services required by the Fund. Such individuals may also perform similar services for the Manager, its Affiliates and other investment programs to be formed in the future.

Changes in Management

The Operating Agreement provides that the Manager may be removed as Manager at any time upon the vote of Holders owning more than 50% of the total outstanding Units entitled to vote, and Holders have the right to elect a successor Manager in place of the removed Manager by a similar vote. The Manager may only withdraw voluntarily from the Fund with the approval of Holders owning in excess of 50% of the Units entitled to vote on Fund matters. The Holders have no voice in the election of directors or appointment of officers of the Manager or its parent, ATEL Capital Group, and the capital stock of such entities can be transferred without the consent of the Fund or the Holders.

If the Manager is removed and was the sole remaining Manager, the Fund will be dissolved unless a majority-in-interest of the Members elect to continue the Fund business. In the event of such election, the Fund business may be continued if the Members making such election, within 90 days after the removal of

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the Manager, elect a successor Manager and continue the Fund’s business on the same terms and conditions, but with a name which does not include or in any way refer to the name of the removed Manager. If the business of the Fund is continued, the removed Manager is entitled to receive from the Fund the then present fair market value of its interest in the Fund, determined by agreement of the removed Manager and the remaining or new Managers, or, if they cannot agree, by arbitration. The Fund will pay to the removed Manager an amount equal to the then present fair market value of the interest so determined. If the removed Manager has voluntarily withdrawn from the Fund, payment shall be in the form of a non-interest bearing unsecured promissory note with principal payable, if at all, out of revenues and distributions the Manager would otherwise have received under the Operating Agreement had such Manager not withdrawn. If the Manager has been removed involuntarily, the payment shall be in the form of an interest bearing promissory note payable in equal annual installments over a term of not less than five years. See Section 17 of the Operating Agreement attached as Exhibit B to this Prospectus.

The Dealer Manager

ATEL Securities Corporation (the “Dealer Manager”) was organized in October 1985 principally for the purpose of assisting in the distribution of securities of programs to be sponsored by ATEL. The Dealer Manager became a member of the National Association of Securities Dealers, Inc. (now the Financial Industry Regulatory Authority or “FINRA”) in February 1986. The Dealer Manager is a wholly-owned subsidiary of ATEL Financial Services, LLC. The Dealer Manager will provide certain wholesaling services to the Fund in connection with the distribution of the Units offered hereby.

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PRIOR PERFORMANCE SUMMARY

Affiliates of AGC 8 Managing Member, LLC, the Manager of the Fund, have extensive experience in the equipment financing industry, including: (i) originating and financing leveraged and single investor lease transactions for corporate investors, (ii) acting as a broker/packager by arranging equity and debt participants for equipment leasing transactions originated by other companies, (iii) consulting on the pricing and structuring of equipment lease transactions for banks, leasing companies and corporations, (iv) organizing and offering individual ownership and limited partnership investment leasing programs (v) originating, negotiating and structuring acquisition and other capital financing for emerging growth companies, including rights to purchase equity interests, and sponsoring investment programs to provide such financing; and (vi) supervising and arranging for the supervision of equipment management and marketing on leasing and other financing transactions involving total equipment costs approximating $2.0 billion.

ATEL has sponsored seven private growth capital programs (the “Prior Private Programs”), six of which have completed their placements of equity interests through September 30, 2011, with investment objectives similar to those of the Fund. These private programs were formed to engage exclusively in growth capital financing.

ATEL Venture Fund (“AVF”), commenced a private offering of up to $25,000,000 of its limited liability company shares on September 1, 1999. AVF terminated its offering as of August 31, 2001. As of that date, $8,846,000 of offering proceeds had been received from approximately 147 investors. All of the proceeds were committed to growth capital financing transactions, organization and offering expenses, working capital and capital reserves. AVF had acquired growth capital financing transactions representing a total capital investment of $11,560,698 as of September 30, 2011. Of such portfolio investments, transactions representing an original capital investment of approximately $11,551,648 had been sold or disposed as of September 30, 2011.

ATEL Growth Capital Fund (“AGCF”), commenced a private offering of up to $25,000,000 of its limited liability company shares on June 1, 2003. AGCF terminated its offering as of May 31, 2005. As of that date, $21,010,000 of offering proceeds had been received from approximately 329 investors. AGCF had acquired growth capital financing transactions representing a total capital investment of $37,420,537 as of September 30, 2011. Of such portfolio investments, transactions representing an original capital investment of approximately $29,679,396 had been sold or disposed as of September 30, 2011.

ATEL Growth Capital Fund II, LLC (“AGCF II”), commenced a private offering of up to $25,000,000 of its limited liability company shares on September 1, 2005. AGCF II terminated its offering as of November 28, 2006. As of that date, $25,000,000 of offering proceeds had been received and accepted. AGCF II had acquired growth capital financing transactions representing a total capital investment of $36,657,732 as of September 30, 2011. Of such portfolio investments, transactions representing an original capital investment of approximately $27,724,716 had been sold or disposed as of September 30, 2011.

ATEL Growth Capital Fund III, LLC (“AGCF III”), commenced a private offering of up to $35,000,000 of its limited liability company shares effective November 29, 2006. AGCF III terminated its offering as of August 15, 2007. As of that date, $35,000,000 of offering proceeds had been received and accepted. AGCF III had acquired growth capital financing transactions representing a total capital investment of $39,481,708 as of September 30, 2011. Of such portfolio investments, transactions representing an original capital investment of approximately $24,851,352 had been sold or disposed as of September 30, 2011.

ATEL Growth Capital Fund IV, LLC (“AGCF IV”), commenced a private offering of up to $35,000,000 of its limited liability company shares effective August 1, 2007. AGCF IV terminated its offering as of January 22, 2009. As of that date, $34,995,000 of offering proceeds had been received and accepted. AGCF IV had acquired growth capital financing transactions representing a total capital investment of $30,042,486 as of September 30, 2011. Of such portfolio investments, transactions representing an original capital investment of approximately $14,853,357 had been sold or disposed as of September 30, 2011.

ATEL Growth Capital Fund V, LLC (“AGCF V”), commenced a private offering of up to $35,000,000 of its limited liability company shares effective January 22, 2009. AGCF V terminated its offering as of July 31, 2010. As of that date, $17,085,000 of offering proceeds had been received and accepted. AGCF V had

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acquired growth capital financing transactions representing a total capital investment of $12,062,905 as of September 30, 2011. Of such portfolio investments, transactions representing an original capital investment of approximately $2,392,006 had been sold or disposed as of September 30, 2011.

ATEL Growth Capital Fund VI, LLC (“AGCF VI”), commenced a private offering of up to $35,000,000 of its limited liability company shares effective September 15, 2010. As of September 30, 2011, AGCF VI had received offering proceeds of $4,450,000 and commenced operations. As of September 30, 2011, AGCF VI had acquired four growth capital financing transactions for $868,568, and had no dispositions.

Further, in addition to this Fund, ATEL has sponsored fourteen prior public equipment leasing programs (the “Prior Public Programs”), during the past twenty years. The Prior Public Programs and Prior Private Programs are together referred to below as the “Prior Programs.” The Prior Public Programs have had investment objectives which differ in certain material respects from those of this Fund and the Prior Private Programs. The Prior Public Programs were formed to invest primarily in capital equipment subject to net leases to major corporations. The Prior Private Programs have been formed to engage primarily in growth capital investment, financing the acquisition of equipment by emerging growth companies and acquiring equity interests and other investments in such companies. The Prior Private Programs have investment objectives that are similar to those of the Fund. The factors considered by the Manager in determining that the investment objectives of the prior programs were similar to those of the Fund include the types of equipment to be acquired or financed, the structure of the financing arrangements with respect to such equipment, the credit criteria for lessees and borrowers, the intended investment cycles, the reinvestment policies and the investment goals of each program. Therefore, all of the information set forth in the tables included in Exhibit A to this Prospectus may be deemed to relate to programs with investment objectives similar to those of the Fund.

In addition to the Fund, the Manager and / or its affiliates has sponsored fourteen prior public equipment leasing and financing programs (the “Prior Programs”).

The first Prior Program, ATEL Cash Distribution Fund, LP (“ACDF”), commenced a public offering of up to $10,000,000 of its equity interests on March 11, 1986. ACDF terminated its offering on December 18, 1987 after raising a total of $10,000,000 in offering proceeds from a total of approximately 1,000 investors, all of which proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACDF acquired a variety of types of equipment with a total purchase cost of approximately $11,133,679. All of such equipment had been sold and the partnership was terminated as of December 31, 1997.

The second Prior Program, ATEL Cash Distribution Fund II, LP (“ACDF II”), commenced a public offering of up to $25,000,000 (with an option to increase the offering to $35,000,000) of its equity interests on January 4, 1988. ACDF II terminated its offering on January 3, 1990 after raising a total of $35,000,000 in offering proceeds from a total of approximately 3,100 investors, all of which proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACDF II acquired a variety of types of equipment with a total purchase cost of approximately $52,270,536. All of such equipment had been sold and the partnership was terminated as of December 31, 1998.

The third Prior Program, ATEL Cash Distribution Fund III, LP (“ACDF III”), commenced a public offering of up to $50,000,000 (with an option to increase the offering to $75,000,000) of its equity interests on January 4, 1990. ACDF III terminated its offering on January 3, 1992 after raising a total of $73,855,840 in offering proceeds from a total of approximately 4,822 investors, all of which proceeds were committed to equipment acquisitions, estimated organization and offering expenses and capital reserves. ACDF III acquired a variety of types of equipment with a total purchase cost of approximately $99,629,942. All of such equipment had been sold and the partnership was terminated as of December 31, 2000.

The fourth Prior Program, ATEL Cash Distribution Fund IV, LP (“ACDF IV”), commenced a public offering of up to $75,000,000 of its limited partnership interests on February 4, 1992. ACDF IV terminated its offering on February 3, 1993 after raising a total of $75,000,000 in offering proceeds from a total of

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approximately 4,873 investors, all of which proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACDF IV acquired a variety of types of equipment with a total purchase cost of $108,734,880. All of such equipment had been sold as of December 31, 2004.

The fifth Prior Program, ATEL Cash Distribution Fund V, LP (“ACDF V”), commenced a public offering of up to $125,000,000 of its limited partnership interests on February 22, 1993. ACDF V terminated its offering on November 15, 1994. As of that date, $125,000,000 of offering proceeds had been received from approximately 7,217 investors. All of the proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACDF V acquired a variety of types of equipment with a total purchase cost of $187,595,762 as of September 30, 2011. Of such equipment, items representing an original purchase cost of $163,797,861 had been sold as of September 30, 2011.

The sixth Prior Program, ATEL Cash Distribution Fund VI, LP (“ACDF VI”), commenced a public offering of up to $125,000,000 of its limited partnership interests on November 23, 1994. ACDF VI terminated its offering on November 22, 1996. As of that date, $125,000,000 of offering proceeds had been received from approximately 6,401 investors. All of the proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACDF VI acquired a variety of types of equipment with a total purchase cost of $208,320,158 as of September 30, 2011. Of such equipment, items representing an original purchase cost of $184,521,756 had been sold as of September 30, 2011.

The seventh Prior Program, ATEL Capital Equipment Fund VII, LP (“ACEF VII”), commenced a public offering of up to $150,000,000 of its limited partnership interests on November 29, 1996. ACEF VII terminated its offering on November 29, 1998. As of that date, $150,000,000 of offering proceeds had been received from approximately 5,386 investors. All of the proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACEF VII had acquired a variety of types of equipment with a total purchase cost of $306,123,226 as of September 30, 2011. Of such equipment, items representing an original purchase cost of $247,324,810 had been sold as of September 30, 2011.

The eighth Prior Program, ATEL Capital Equipment Fund VIII, LLC (“ACEF VIII”), commenced a public offering of up to $150,000,000 of its limited liability company member interests on December 7, 1998. ACEF VIII terminated its offering on November 30, 2000. As of that date, $135,701,380 of offering proceeds had been received from approximately 3,625 investors. All of the proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACEF VIII had acquired a variety of types of equipment with a total purchase cost of $248,513,253 as of September 30, 2011. Of such equipment, items representing an original purchase cost of approximately $205,673,965 had been sold as of September 30, 2011.

The ninth Prior Program, ATEL Capital Equipment Fund IX, LLC (“ACEF IX”), commenced a public offering of up to $150,000,000 of its limited liability company member interests on January 16, 2001. ACEF IX terminated its offering as of January 15, 2003. As of that date, $120,652,160 of offering proceeds had been received from approximately 3,238 investors. All of the proceeds were committed to equipment acquisitions, organization and offering expenses and capital reserves. ACEF IX had acquired a variety of types of equipment and invested in notes receivable with a total cost of $192,299,637 as of September 30, 2011. Of such equipment, items representing an original purchase cost of approximately $92,383,172 had been sold or disposed as of September 30, 2011.

The tenth prior public program, ATEL Capital Equipment Fund X, LLC (“ACEF X”), commenced a public offering of up to $150,000,000 of its limited liability company member interests on March 12, 2003. ACEF X terminated its offering on March 11, 2005. As of that date, $140,192,575 of offering proceeds had been received from approximately 3,228 investors. All of the proceeds were committed to equipment acquisitions, organization and offering expenses, working capital and capital reserves. ACEF X had acquired a variety of types of equipment and invested in notes receivable with a total purchase cost of $211,971,014 as of September 30, 2011. Of such equipment, items representing an original purchase cost of approximately $53,813,380 had been sold or disposed as of September 30, 2011.

The eleventh prior public program, ATEL Capital Equipment Fund XI, LLC (“ACEF XI”), commenced a public offering of up to $150,000,000 of its limited liability company member interests on April 11, 2005. The

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offering was terminated as of April 30, 2006. As of September 30, 2011, $52,311,070 of offering proceeds had been received. All of the proceeds were committed to equipment acquisitions, organization and offering expenses, working capital and capital reserves. ACEF XI had acquired a variety of types of equipment and invested in notes receivable with a total purchase cost of $82,065,156 as of September 30, 2011. Of such equipment, items representing an original purchase cost of approximately $30,425,030 had been sold or disposed as of September 30, 2011.

The twelfth prior public program, ATEL 12, LLC (“ATEL 12”), commenced a public offering of up to $200,000,000 of its limited liability company member interests on September 26, 2007. The offering was terminated as of September 25, 2009. As of that date, $30,021,320 of offering proceeds had been received. All of the proceeds were committed to equipment acquisitions, organization and offering expenses, working capital and capital reserves. ATEL 12 had acquired equipment and invested in notes receivable with a total purchase cost of $28,151,939 as of September 30, 2011. Of such equipment, items representing an original purchase cost of approximately $1,011,007 had been sold or disposed as of September 30, 2011.

The thirteenth prior public program, ATEL 14, LLC (“ATEL 14”), commenced a public offering of up to $150,000,000 of its limited liability company member interests on October 7, 2009. As of September 30, 2011, $77,854,620 of offering proceeds had been received. All of the proceeds were committed to equipment acquisitions, organization and offering expenses, working capital and capital reserves. ATEL 14 had acquired equipment and invested in notes receivable with a total purchase cost of $47,639,404 as of September 30, 2011. Of such equipment, items representing an original purchase cost of approximately $1,000,963 had been sold or disposed as of September 30, 2011.

The fourteenth prior public program, ATEL 15, LLC (“ATEL 15”), commenced a public offering of up to $150,000,000 of its limited liability company member interests on October 28, 2011.

The Manager will provide to any investor, upon written request and without charge, copies of the most recent Annual Reports on Form 10-K filed with the Securities Exchange Commission by each of the Prior Public Programs, and will provide to any investor, for a reasonable fee, copies of the exhibits to such reports. Investors may request such information by writing to ATEL Investor Services, Inc. at 600 California Street, 6 th Floor, San Francisco, California 94108 or by calling the Manager at (415)-989-8800.

As of September 30, 2011, the Prior Programs have invested approximately $220.0 million in growth capital financing transactions since 1999. Only a minor portion of the growth capital investments were purchased by Prior Public Program portfolios. The net aggregate unrecovered investment in growth capital transactions for all Prior Programs was approximately $7.9 million as of September 30, 2011, or an approximate 0.30% per annum, substantially less than the amount assumed by the Manager and its Affiliates in structuring these portfolios as the losses to be anticipated in the ordinary course of growth capital financing losses. There is no identifiable trend in the frequency or amount of defaults experienced by Prior Private Programs. It should be noted that the Fund, like Prior Private Programs, provides financing to customers who are in an earlier stage of their business development than the lessees to whom the Prior Public Programs provide financing. These emerging growth companies are generally less creditworthy than more established companies and the Fund and the Prior Private Programs can therefore anticipate a higher rate of customer default than experienced by the Prior Public Programs.

As discussed in this Prospectus, fluctuations in demand for growth capital financing may affect the ability of a financing program to invest its capital in a timely manner. During the period from 1999 through 2003, growth capital and other capital asset financing companies experienced a more difficult market in which to make suitable investments as a result of reduced growth and changing economic conditions in the U.S economy and the consequent softening of demand for capital equipment during that period. Delays in investment may have a negative impact on the operating results of programs that were actively seeking to invest their capital during that period. In particular AVF experienced such adverse impact from delays in investment. The Manager believes that it has identified industry segments, lease markets and potential transaction structures that will permit the other Prior Programs to pursue their investment objectives.

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INCOME, LOSSES AND DISTRIBUTIONS

The taxable income and taxable loss of the Fund (the “Net Income and Net Loss”) will be allocated to the investors, and Fund cash distributions will be allocated to the Manager in payment of the Promotional Interest and Carried Interest (as described under “Management Compensation” and provided in Section 10.4 of the Operating Agreement) with the balance of all cash distributions paid to investors.

Allocations of Net Income and Net Loss

The Fund will close its books as of the end of each quarter and allocate Net Income, Net Loss and cash distributions on a daily basis, i.e., Fund items will be allocated to the investors in the ratio in which the number of Units held by each of them bears to the total number of Units held by all as of the last day of the fiscal quarter with respect to which such Net Income, Net Loss and cash distributions are attributable; provided, however, that, with respect to Net Income, Net Loss and cash distributions attributable to the offering period of the Units (including the full quarter in which the offering terminates), such Net Income, Net Loss and cash distributions shall be apportioned in the ratio in which (i) the number of Units held by each investor multiplied by the number of days during the period the investor owned the Units bears to (ii) the amount obtained by totaling the number of Units outstanding on each day during such period. No Net Income, Net Loss and cash distributions with respect to any quarter will be allocated to Units repurchased by the Fund during such quarter, and such Units will not be deemed to have been outstanding during such quarter for purposes of the foregoing allocations. Transfers of Member interests will not be effective for any purpose until the first day of the following quarter.

Timing and Method of Distributions

Fund cash distributions are generally made and allocated to Holders on a quarterly basis. However, the Manager will determine amounts available for distributions on a monthly rather than quarterly basis. All investors will be entitled to elect to receive distributions monthly rather than quarterly by designating such election in a written request delivered to the Manager. An initial election to receive monthly rather than quarterly distributions may be made at the time of subscription by designating such election on the Subscription Agreement. Thereafter, each investor may, during each fiscal quarter, designate an election to change the timing of distributions payable to the investor for the ensuing fiscal quarter by delivering to the Manager a written request. Investors who have previously elected monthly distributions may at such time elect to return to quarterly distributions and those receiving quarterly distributions may elect monthly distributions for the following quarter. Distributions will be made by check payable to the record Holder unless another payee is designated in writing executed by the Holder. Holders may elect in writing to have distributions paid by wire transfer to designated accounts. Wire transfer instructions may be given upon subscription or may be provided at any time thereafter for subsequent distributions.

During the Fund’s offering and operating stages, extending through the end of a six-year period following the end of the offering of Units, the Fund expects to make regular cash distributions to investors. After the end of the Fund’s operating stage, the Fund intends to distribute to investors all available cash through the final liquidation of the Fund, which is expected to occur approximately ten years following the end of the offering period. During this liquidation stage, the timing and amount of distributions are expected to be less regular than during the operating stage.

Allocations of Distributions

Distributions will be allocated among investors on the same basis as Net Income and Net Loss. Amounts to be distributed will be determined after payment of Fund operating expenses, establishment or restoration of capital reserves deemed appropriate by the Manager, and, to the extent permitted, reinvestment in additional equipment.

A significant portion of each distribution is expected to consist of principal amortization on Fund financing transactions, and so will constitute a return of capital for tax and accounting purposes. Until investors receive total distributions equal to their original investment, a portion of each distribution will be

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deemed a return of capital rather than a return on capital for investment purposes. Notwithstanding the foregoing, however, the Manager intends to make distributions only out of cash from operations and not out of capital reserves or offering proceeds held pending investment.

The Fund is intended to be self-liquidating. After the sixth year following the year in which the offering terminates, the Fund will distribute all available cash, other than reserves deemed required for the proper operation of its business, including reserves needed to preserve the value of Portfolio Assets or to purchase investments the Fund has committed to buy prior to the end of the Reinvestment Period. During this liquidation stage, rates of distributions may vary and distributions may be suspended while Fund debt is repaid from disposition proceeds before net disposition proceeds are distributed to Unit holders.

When the Fund liquidates, and after the Fund pays its creditors (including Unit holders who may be creditors), the Fund will distribute any remaining proceeds of liquidation in accordance with each Member’s positive Capital Account balance. As a result, if cash distributions are made during the period between the date investors are first admitted to the Fund and the end of the offering of Units, it is likely that different amounts would be distributable upon liquidation to the different investors, depending on their then Capital Account balances. This difference will be substantially reduced or eliminated by the special allocation to investors of income or gain, which could equalize their Capital Account balances. In particular, if distributions made during the offering period to investors who were admitted at the initial admission date reflect a return of capital (or to the extent that such investors receive allocations of net losses relating to the offering period), such investors will receive less on liquidation of the Fund than those who were admitted at the final admission date. Furthermore, to the extent that those investors who were admitted at the first admission date receive allocations of net profits relating to the offering period in excess of the distributions of cash for that same period, such investors will receive more distributions on liquidation than those investors who are admitted at end of the offering. As noted above, any differences would be substantially reduced or eliminated to the extent the Manager equalizes Capital Accounts through special allocations of income or gain.

Reinvestment

The Fund has the power to reinvest revenues during the period ending six years after the year the offering ends. Before the Fund can reinvest in portfolio assets, however, the Fund must, at a minimum, distribute

(i) enough cash to allow an investor in a 35% federal income tax bracket to meet the federal and state income taxes due on income from the operations of the Fund;

(ii) through the first full fiscal quarter ending at least six months after termination of the offering of Units, an amount equal to the lesser of:

(a) a rate of return on their original capital contribution equal to 4% over the average yield on five-year United States Treasury Bonds for the fiscal quarter immediately preceding the date of distribution, as published in a national financial newspaper from time to time (with a minimum of 10% per annum and a maximum of 11% per annum), or

(b) 90% of the total amount of cash available for distributions; and

(iii) for each quarter during the rest of the Reinvestment Period, an amount equal to 11% per annum on their original capital contribution.

The following chart illustrates the anticipated cycle of distributions to investors during the Fund’s three basic stages, funding, operations and liquidation. The amount of distributions is expected to vary during the initial funding stage of the Fund, as it raises equity capital through the sale of Units, acquires its initial investment portfolio and leverages its portfolio. Then, distributions are expected to become level as the Fund is required during its six year operations stage to make minimum distributions to investors prior to any reinvestment of the Fund’s operating cash flow. There can be no assurance, however, as to the rate or availability of distributions during any period, or the rate of reinvestment, if any, during the operations stage. The availability of cash for distributions, and the rate of distributions, if any, during all stages will be dependent on the success of Fund operations and the Fund’s need to pay operating expenses, to repay debt, the terms of which may require suspension of distributions during some periods, and to establish necessary

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capital reserves. After the operations stage, the Fund is expected to enter into a two to four year liquidation stage during which all cash flow not required for Fund obligations, including repayment of debt and establishment of capital reserves, will be distributed to investors. Distributions during this period are expected to fluctuate as amounts vary depending on the rate of liquidation of the portfolio, the residual values realized upon expiration of leases and disposition of investment assets, the amount of remaining lease revenues, the amount of operating expenses incurred, the need to repay portfolio debt, and the establishment of necessary capital reserves. Investors should note that there can be no assurance as to the amount or timing of any distributions, or as to the duration of the Fund’s liquidation period and term to final liquidation, which, as described above, will depend on a number of factors affecting Fund operations.

[GRAPHIC MISSING]

Return of Unused Capital

Any net offering proceeds received by the Fund during the first twelve months of the offering not committed to investment in portfolio assets by 24 months after the beginning of the offering, and any offering proceeds received in a second year of the offering not committed to investment by a date 12 months after the end of the offering (except amounts used to pay operating expenses or required as capital reserves) will be distributed to investors pro rata as a return of capital. In addition, in order to refund to the investors the amount of Front End Fees attributable to such returned capital, the Manager has agreed to contribute to the Fund, and the Fund will distribute to investors pro rata, the amount by which the unused capital so distributed, divided by the percentage of offering proceeds remaining after payment of all Front End Fees, exceeds the amount of unused capital distributed.

Cash from Capital Reserve Account

The Operating Agreement requires that the Fund initially establish a cash reserve for general working capital purposes in an amount equal to not less than ½ of 1% of the offering proceeds (equal to $6,000 if the minimum Units are sold and $375,000 if the maximum Units are sold). Any cash reserves used need not be

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restored, and, if restored, may be restored from the operating revenues of the Fund. Distributions of cash reserves will be allocated and distributed in the same manner as cash proceeds from sales of Portfolio Assets. Cash reserves that the Manager deems no longer required as capital reserves may be distributed or invested by the Fund.

Sources of Distributions — Accounting Matters

The amount of cash the Fund will distribute to investors each year is not the same as the amount of taxable income that is passed through to the investor. For example, the Fund may have tax deductions that do not represent direct cash expenses, so the Fund may have more cash available to distribute than it has taxable income. When an investor receives a distribution of more cash in a year than his share of income, he will be deemed to be receiving a return of his invested capital rather than investment income. Distributions by the Fund may be characterized differently for tax, accounting and economic purposes as a return of capital, investment income or a portion of each.

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CAPITALIZATION

The capitalization of the Fund, as of the date of this Prospectus and as adjusted to reflect the issuance and sale of the Units offered hereby assuming the minimum 120,000 Units and the maximum 7,500,000 Units are sold, is as follows:

     
  As of the
Date hereof
  Minimum
120,000 Units
  Maximum
7,500,000 Units
Units of Member Interest ($10 per Unit)     50       1,200,500       75,000,500  
Total Capitalization   $  500     $ 1,200,500     $ 75,000,500  
Less Estimated Organization and Offering Expenses           150,000       9,375,000  
Net Capitalization   $ 500     $ 1,050,500     $ 65,625,500  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

Until receipt and acceptance of subscriptions for 120,000 Units, the Fund will not commence active operations.

After the minimum capital is received, subscription proceeds will be released to the Fund from escrow and applied to the payment or reimbursement of Organization and Offering Expenses, leaving estimated net proceeds available for investment and operations of $1,050,000. As additional subscriptions for Units are received, the Fund will experience a relative increase in liquidity and the Fund will experience a corresponding decrease in liquidity as capital is expended in the purchase of its portfolio investments.

The Fund will acquire its investments with cash. The Fund will not borrow to acquire its Portfolio Assets and does not intend or expect to incur any indebtedness. The Fund anticipates that it would incur indebtedness only in the event that it is required to borrow for temporary working capital purposes. It may also engage in short term borrowing against committed cash flow due on its investments in order to provide an even rate of distributions and resulting capital account adjustments during its offering period. The Fund has no arrangements or commitments from any lender with respect to any such borrowing, however, and there can be no assurance that it will engage in any such borrowing.

Until required for the acquisition or operation of portfolio investments, the offering proceeds will be held in short-term, liquid investments. The Fund is required by the Operating Agreement to establish an initial working capital reserve in the amount of ½ of 1% of the Gross Proceeds.

For both financial reporting and tax purposes, Portfolio Assets will generally be amortized over the terms of the financing transactions.

The potential effects of inflation on the Fund are difficult to predict. If the general economy experiences significant rates of inflation, however, it could affect the Fund in a number of ways. Revenues from existing financing transactions would not generally increase with inflation, as the Fund does not expect to provide for any inflation escalation clauses in its financing transactions. Nevertheless, the anticipated values of its collateral may be expected to increase with inflation as the cost of similar new and used equipment increases.

Fluctuations in prevailing interest rates could also affect the Fund. The cost of capital reflected in interest rates will be a significant factor in determining market rates for the Fund’s portfolio of financing transactions. The Fund would expect that increases or decreases in prevailing interest rates would generally result in corresponding increases or decreases in available rates on the Fund’s new financing transactions. However, interest rate fluctuations would generally have little or no effect on existing financing transactions, as the Fund expects that the interest rates on its financing transactions will generally be fixed without any adjustment related to prevailing market interest rates.

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FEDERAL INCOME TAX CONSEQUENCES

Preface

This section of the Prospectus addresses all material federal income tax considerations which may be relevant to a “typical” investor. ATEL considers a typical investor to be a natural person who is a citizen of the United States. This section is not exhaustive of all possible tax considerations and is not tax advice. Moreover, this section does not deal with all aspects that might be relevant to a particular prospective investor, in light of the investor’s personal circumstances. The tax treatment for non-typical investors may differ significantly from the tax consequences outlined in this section. Non-typical investors include trusts, corporations, tax-exempt organizations, employee benefit plans, and foreign investors. State and local tax consequences may differ from the federal income tax consequences described below.

It is impractical to set forth in this Prospectus all aspects of federal, state, local and foreign tax law which may affect an investment in the Fund. Nevertheless, as noted above, this section of the Prospectus addresses all material federal income tax considerations which may be relevant to a “typical” investor. The tax consequences of investing in Units will not be the same for all investors. A careful analysis by each investor of the investor’s particular tax situation is required to evaluate this investment properly. Furthermore, the discussion of various aspects of federal, state, local and foreign taxation and of counsel’s opinion contained herein is based on the Internal Revenue Code, existing laws, judicial decisions and administrative regulations, rulings and practice, all of which are subject to change. Therefore, ATEL urges each investor to consult with the investor’s own tax advisor prior to investing in Units.

Opinions of Derenthal & Dannhauser LLP

Derenthal & Dannhauser LLP is of the opinion that, for federal income tax purposes:

The Fund is classified as a partnership and not as an association taxable as a corporation.
The Fund will not be treated as a publicly traded partnership.
Upon admission to the Fund, an investor will be a Member of the Fund.
The IRS will not significantly modify the allocations of taxable income and tax loss under the Operating Agreement.

In addition, to the extent the summaries of federal income tax consequences herein contain statements or conclusions of law, counsel is of the opinion that these statements or conclusions are correct under the Internal Revenue Code, applicable current and proposed IRS regulations, current published administrative positions of the IRS and judicial decisions.

The opinions of Derenthal & Dannhauser LLP are based upon the facts described in this Prospectus, and the assumption that the Fund will operate its business as described in this Prospectus. Any alteration of the facts may adversely affect the opinions rendered. Furthermore, the opinions of counsel are based upon existing law, which is subject to change either prospectively or retroactively.

Counsel’s tax opinions represent only Derenthal & Dannhauser LLP’s best legal judgment. The opinions have no binding effect on, or official status with, the IRS or any other government agency. The Fund has not requested an IRS ruling on any matter. There can be no assurance that the IRS will not challenge any of Derenthal & Dannhauser LLP’s conclusions.

The Fund’s management will prepare its income tax information returns. Such matters will be handled by the Fund. Tax counsel to the Fund will not prepare or review the Fund’s income tax information returns.

Classification as a Partnership

The Manager and the Fund have represented to counsel that the Fund will not elect to be treated as a corporation for federal income tax purposes under the Internal Revenue Code Section 7701 Treasury Regulations. Based on such representation, Derenthal & Dannhauser LLP is of the opinion that the Fund will be classified as a partnership and will not be treated as an association taxable as a corporation for federal

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income tax purposes. Derenthal & Dannhauser LLP’s opinion is based upon ATEL’s factual representations and the continued effectiveness of the Treasury Regulations. If the Treasury Department were to amend its Regulations, it is possible that the Fund would not qualify as a partnership under the amended regulations.

Notwithstanding the preceding, if Units are considered publicly traded the Fund will be treated as a corporation under the publicly traded partnership provisions of Internal Revenue Code Section 7704. The Fund will be treated as publicly traded if Units are traded on an established securities market, or 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 Internal Revenue Code Section 7704 state that a secondary market for an entity’s interests generally is indicated by the existence of a person standing ready to make a market in the interests, or where the holder of an interest has a readily available, regular and ongoing opportunity to sell or exchange his interest through a public means of obtaining or providing information on offers to buy, sell or exchange interests. Complicity or participation of the entity is relevant in determining whether there is public trading of its interests. 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 meaningful limitation on the holders’ ability to readily transfer their interests. A partnership’s right to refuse to recognize transfers is not a meaningful limitation unless such right actually is exercised.

Whether the Units will become readily tradable on a secondary market or the substantial equivalent thereof cannot be predicted with certainty. The Units will not be deemed readily tradable on a secondary market or the substantial equivalent thereof if any of the safe harbors included in the Treasury Regulations is satisfied. One of these is the 2% safe harbor. If the sum of the interests in Fund capital or profits that are sold or otherwise transferred during a tax year does not exceed 2% of the total interests in capital or profits, then a secondary market or its equivalent in Units will not exist.

The Fund has no control over an independent third person establishing a secondary market in Units. However, the Fund’s operating agreement requires that an investor obtain the consent of ATEL prior to any transfers of Units. ATEL intends to exercise its discretion in granting and withholding its consent to transfers so as to fall within the parameters of the 2% safe harbor. If the Fund complies with the 2% safe-harbor provision of the Treasury Regulations, Derenthal & Dannhauser LLP is of the opinion that the Fund will not be considered a publicly traded partnership.

If the Fund were treated for federal income tax purposes as a corporation in any year, (i) instead of there being no tax at the Fund level, the Fund would be required to pay federal income taxes upon its taxable income; (ii) state and local income taxes could be imposed on the Fund; (iii) losses of the Fund 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 Units to the extent any distribution exceeded such earnings and profits and the tax basis of such Units; (v) distributions would be classified as portfolio income which would not be available to offset passive activity losses. See “Limitation on Deduction of Losses — Classification of Income as Portfolio” below. 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 the liabilities of the Fund over the adjusted basis of his Units.

Any of the foregoing would substantially reduce the effective yield on an investment in Units.

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 operating or partnership agreement. However, if such allocations do not have substantial economic effect, distributive shares will be determined in accordance with the partners’ interests in the partnership.

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.

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An allocation can have economic effect even if a partner is not required to restore a deficit balance in his capital account, but only (i) to the extent the allocation does not reduce his capital account balance below zero; and (ii) if the operating or partnership agreement contains a qualified income offset. An agreement contains a qualified income offset if it provides that a partner who unexpectedly receives an adjustment, allocation or distribution that reduces his capital account below zero will be allocated income or gain in an amount and manner sufficient to eliminate his deficit capital account balance as quickly as possible.

Special rules apply to the allocation of deductions attributable to nonrecourse debt. Such allocations will be respected under the Treasury Regulations if the partners who are allocated the deductions bear the burden of the future income related to the previous deductions. In particular, the following additional elements must be satisfied: (i) the operating or partnership agreement must provide for allocations of nonrecourse deductions in a manner consistent with allocations of some other significant partnership item related to the property securing the nonrecourse debt, provided such other allocations have substantial economic effect; (ii) all other material allocations and capital account adjustments under the operating or partnership agreement are recognized under the Treasury Regulations; and (iii) the operating or partnership agreement contains a minimum gain chargeback.

A minimum gain chargeback provides that, if there is a net decrease in partnership minimum gain during a tax year, all partners will be allocated items of partnership income and gain in proportion to, and to the extent of, an amount equal to the portion of such partner’s share of the net decrease in partnership minimum gain. The amount of partnership minimum gain is determined by computing the amount of gain, if any, that would be realized by the partnership if it disposed of the property subject to the nonrecourse liability in full satisfaction thereof.

The Fund’s 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 Fund 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, Derenthal & Dannhauser LLP is of the opinion that the allocations included in the operating agreement would 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 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. Counsel is of the opinion that the economic effect of the allocations in the Operating Agreement is substantial.

Income Recognition

The Fund will prepare its tax returns using the accrual method of accounting, unless the Fund is permitted to use the cash method of accounting under Treasury Regulations and the Fund elects to do so. Under the accrual method, the Fund will include in income interest as and when earned by the Fund, whether or not received. Thus, the Fund may be required to recognize income sooner than would be the case under the cash method of accounting. Even if the Fund is permitted to and elects to use the cash method of accounting,

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it may be required to recognize interest as income prior to cash receipt thereof, under the original issue discount (“OID”) rules of the Internal Revenue Code. However, the Manager does not anticipate that any loan will be made on terms that would require imputation of interest under the OID rules.

Taxation of Investors

As a partnership for federal income tax purposes, the Fund itself will not be subject to any federal income taxes. Nonetheless, the Fund 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 Fund items of income, gain, loss, deduction or credit. An investor will be subject to tax on his distributive share of Fund income whether or not any distribution is made to him.

If the amount of a distribution to an investor for any year exceeds the investor’s share of the Fund’s taxable income for the year, the excess will constitute a return of capital. A return of capital is applied first to reduce the tax basis of the investor’s Units. Any amounts in excess of such tax basis generally will be taxable as a gain from the sale of a capital asset. However, all or a portion of a distribution to an investor in exchange for:

(i) an interest in inventory items which have substantially appreciated in value, or

(ii) unrealized receivables

will generally result in the receipt of ordinary income. The terms inventory items and unrealized receivables are specially defined for this purpose. The term unrealized receivables includes depreciation recapture, but only to the extent of the amount which would be treated as ordinary income upon a sale of the property.

Tax Treatment of Lending Activities

The Internal Revenue Code contains many special rules regarding the proper recognition of income, gain, loss, deduction and credits, including the OID rules. Also, management and other fees incurred in connection with investment activities are considered investment expenses the deductibility of which is limited. Fees incurred in connection with investment activities are not considered to be trade or business expenses. If the Fund’s lending activity is not a trade or business, Fund management fees and other costs incurred likely would be considered investment expenses. The deductibility of investment expenses is subject to various limitations. In addition, the tax treatment of any losses incurred on Fund loans will depend on whether or not the Fund is in the trade or business of making loans. If Fund loans are considered to have been made or acquired in connection with a trade or business of lending money, any loss incurred on a borrower’s default would be an ordinary loss. However, if the Fund loans are not considered to have been made or acquired in connection with a trade or business of lending money, any loss incurred on a borrower’s default would be a capital loss. Generally, capital losses can be deducted only against capital gains and not against ordinary income. Additionally, the law addressing the treatment of loan origination and similar fees is unclear.

Limitation on Deduction of Losses; Classification of Income as Portfolio

There are limitations on an investor’s ability to use losses from other sources to offset Fund income. There are also limitations on an investor’s ability to deduct his distributive share of Fund losses, if any. Among them are: (i) losses will be limited to the extent of the investor’s tax basis in his Units; (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 also are limited.

Tax Basis. Initially, an investor’s tax basis for his Units will be equal to the price paid for the Units. Each investor will increase the tax basis for his Units by (i) his allocable share of the Fund’s taxable income; and (ii) any increase in his share of the Fund’s nonrecourse liabilities, and will decrease the tax basis for his Units by

his allocable share of the Fund’s tax loss,

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the amount of any distributions, and
any reduction in his share of Fund nonrecourse liabilities.

If the tax basis of an investor should be reduced to zero, the amount of any distributions and any reduction in Fund nonrecourse liabilities will be treated as gain from the sale or exchange of the investor’s Units.

Subject to the other limitations discussed below, on his own federal income tax return an investor may deduct his share of the Fund’s tax loss to the extent of the tax basis for his Units. Fund 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 Internal Revenue Code Section 465, the amount of losses which may be claimed by an individual or a closely-held corporation from activities that are part of a trade or business or that are entered into for the production of income cannot exceed the amount which the investor has at risk with respect to such activities. A closely-held corporation is a corporation more than 50% 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 Fund losses and distributions. An investor’s at risk amount will be increased by his share of Fund income.

Passive Activity Losses; Portfolio Income.  Under the passive activity rules of Internal Revenue Code Section 469, certain taxpayers are required to segregate income and loss into three categories: active trade or business income or loss; passive activity income or loss; and portfolio income or loss. The passive activity rules apply to individuals, estates, trusts, personal service corporations and some closely held corporations (including S corporations). The passive activity rules generally allow taxpayers to deduct their passive activity losses only against their passive activity income, and portfolio income expenses only against portfolio income. Passive activity income does not include portfolio income such as interest, dividends and royalties, or active income such as ordinary income from salary and other types of compensation for personal services. A passive activity is one that involves the conduct of a trade or business in which the taxpayer does not materially participate.

The Fund expects that substantially all of its interest income and fees from lending activities will constitute portfolio income and expense. Portfolio income can only be reduced by portfolio expenses. However, the treatment of gains and losses from any lending activities will depend on whether the Fund is in the trade or business of lending. If it is, gains and losses could constitute passive activity gains or passive activity losses. The Fund will also generate portfolio income or expense from financial transactions, including interest earned on funds pending their investment and dividends received on Equity Interests.

Tax Consequences Respecting Equity Interests

The Internal Revenue Code includes a myriad of rules respecting the tax treatment of stock, stock options, stock warrants and similar items. A discussion of those provisions is beyond the scope of this prospectus. Investors should consult with their own tax advisors if they desire more information in that regard.

The Fund could have taxable income on the receipt of Equity Interests. However, the Fund’s receipt of Equity Interests will not provide cash for distribution to the investors. Any tax liability would be paid from an investor’s own funds (including any Fund distributions from other sources).

Whether the Fund’s receipt of Equity Interests will result in income recognition will depend upon various factors, including

whether or not the transfer of the Equity Interests by the Fund is subject to restriction, and
the nature of the Equity Interests. For example, the receipt of marketable stock for no payment would almost always result in the recognition of income.

These factors will also determine the amount of income, if any, and its character for purposes of the passive activity rules. See “Limitation on Deduction of Losses; Classification of Income as Portfolio” above.

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The Fund’s exercise of stock options, warrants and similar securities could result in the recognition of income.

Deductibility of Management Fees

The Fund will pay asset management fees for services to be rendered by ATEL. The Fund intends to deduct the asset management fees. It is possible that the IRS may challenge the deductibility of all or a portion of the asset management fees on the basis that

the amount thereof is excessive,
the Fund is not engaged in a trade or business,
all or a portion thereof is payment for other services performed by, or other value provided by, the recipient thereof, or
payments for such services is not deductible.

If such a challenge by the IRS were successful, the asserted deductions would be reduced or eliminated.

Disposition of Units

The amount of gain which an investor will realize upon the disposition of his Units will equal the excess of

the amount realized by the investor, over
the investor’s tax basis in the Units.

Conversely, the amount of loss which an investor will realize upon the disposition of his Units will equal the excess of

the investor’s tax basis, over
the amount realized for the Units.

The amount realized on the sale of the Units will include the investor’s share of any Fund liabilities. As a result, a disposition of Units may result in a tax liability in excess of the cash proceeds.

Such gain or loss generally will be capital gain or loss. In the case of an individual, any such gain will be subject to tax at a maximum rate of 15%, if the Units have been held for more than 12 months. However, any gain realized on the disposition of a Unit by an investor which is attributable to unrealized receivables or inventory items will be taxed at ordinary income rates.

Liquidation of the Fund

The Operating Agreement provides that on liquidation of the Fund any remaining assets will be sold. 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 Fund assets. 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 Units. 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.

Fund Elections

Section 754 of the Internal Revenue Code permits an entity such as the Fund to elect to adjust the tax basis of its property

upon the transfer of units by sale or exchange or on the death of a holder, and
upon the distribution of property by the fund to a holder.

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This is known as a Section 754 election. If the Fund were to make such an election, then transferees of Units would be treated, for the purpose of depreciation and gain, as though they had acquired a direct interest in Fund assets. Furthermore, under certain circumstances, the Fund would be required to make the foregoing adjustments.

A Section 754 election is complex. A Section 754 election increases the expense of tax accounting. As a result, ATEL does not intend to cause the Fund to make a Section 754 election, unless required to do so. If not, then an investor may have greater difficulty in selling his Units.

The Internal Revenue Code includes other elections. The Fund may make various 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.

Treatment of Gifts of Units

Generally, no gain or loss is recognized for federal income tax purposes as a result of a gift of property. There are exceptions to the general rule. If a gift of a Unit were made at a time when the investor’s allocable share of the Fund’s nonrecourse indebtedness exceeded the adjusted tax basis of his Unit, such investor would realize gain for federal income tax purposes upon the transfer of such Unit to the extent of such excess. A charitable contribution of Units also would result in income or gain to the extent that the transferor’s share of nonrecourse liabilities exceeded the adjusted tax basis in his Units. Gifts of Units may also result in gift tax liability pursuant to the rules applicable to all gifts of property.

Investment by Qualified Retirement Plans and IRAs

Qualified pension, profit-sharing, stock bonus plans, Keogh Plans and IRAs are generally exempt from taxation. A qualified retirement plan or an IRA will have tax liability to the extent that its unrelated business taxable income exceeds $1,000 during any fiscal year. Unrelated business taxable income (“UBTI”) is determined in accordance with Sections 511-514 of the Internal Revenue Code.

The Fund will be engaged in the business of acquisition lending. If the Fund is not deemed to be engaged in a trade or business for purposes of the UBTI rules, it will not generate UBTI. If the Fund is deemed to be engaged in a trade or business, its interest income and all expenses attributable thereto will be excluded from the calculation of UBTI under Code Section 512(b), unless Fund loans are “debt financed property” under the UBTI rules as discussed below. Income earned by the Fund not characterized as interest, which would include items such as processing and servicing fees, could constitute UBTI. Where a lender is able to establish that the fee is paid as compensation to the lender solely for the use or forbearance of money, the fee is considered to be interest. It is not necessary that the parties to a transaction label a payment made for the use of money as interest for it to be treated as interest. In order for such fees to be treated as interest, however, the fees must not be paid for any specific services that have been performed or will be performed in connection with the loan. A qualified retirement plan or IRA will be required to report its pro rata share of any Fund UBTI if and to the extent that the investor’s UBTI from all sources exceeds $1,000 in any taxable year.

The Fund will not borrow to acquire its Portfolio Assets and does not intend or expect to incur any indebtedness. The Fund anticipates that it would incur indebtedness only in the event that it is required to borrow for temporary working capital purposes. It may also engage in short term borrowing against committed cash flow due on its investments in order to provide an even rate of distributions and resulting capital account adjustments during its offering period. For purposes of section 514 and the regulations thereunder, the term “debt-financed property” means any property which is held to produce income and with respect to which there is acquisition indebtedness (determined without regard to whether the property is debt-financed property) at any time during the taxable year. The term “income” is not limited to recurring income but applies as well to gains from the disposition of property. Indebtedness is acquisition indebtedness if it was incurred directly or indirectly in connection with the acquisition or improvement of the asset. Accordingly, the Fund does not anticipate that it will have any such acquisition indebtedness, and does not anticipate that it will cause tax exempt Unit holders to realize UBTI from their investment in the Fund.

If a qualified retirement plan or IRA has unrelated business taxable income in excess of $1,000 for any year,

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it is subject to income tax on the excess, and
it is obligated to file a tax return for such year.

Notwithstanding the preceding, a charitable remainder trust that recognizes unrelated business taxable income will be subject to an excise tax equal to 100% of such 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 Units.

Fund Tax Returns and Tax Information

The Fund will adopt the calendar year as its tax year. The Fund’s Operating Agreement requires the Fund to provide tax information to the investors within 75 days after the close of each Fund 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 the Fund’s 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.

An investor will be required to inform the Fund of the sale or exchange of his Units 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.

The Fund will be required to inform the IRS of each such transfer. The failure of an investor or of the Fund to file these notices may result in substantial penalties. The Fund also must inform both the seller and the buyer of Units of the proportionate interest of the transferred Units in the unrealized receivables and inventory items of the Fund. 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 the Fund’s tax information returns. Any such 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 the Fund as well as items not related to the Fund.

The Internal Revenue 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. ATEL is the Fund’s 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 the Fund or an investor, substantial legal and accounting expenses and deficiency interest and penalties may be incurred. The Fund will not bear any expense that may be incurred by an investor in connection with:

the investor’s participation in an audit of the Fund,
the audit of his tax returns, or
the determination or redetermination of his tax liability even though resulting solely from adjustments to the Fund’s tax returns.

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Tax Shelters and Reportable Transactions

Under the American Jobs Creation Act of 2004, the rules requiring tax shelter registration have been repealed. Instead, “material advisers” to “reportable transactions” are required to file an information return for each reportable transaction. The information return must include a description of the transaction, a description of the potential tax benefits expected therefrom, and other information required by the Treasury Department. 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 Internal Revenue Code.

Under current Regulations, a “reportable transaction” is one which satisfies any of the following:

(a) A listed transaction, which 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 Internal Revenue Code Section 165 of at least (1) $10 million in any single year or $20 million in any combination of years for corporations; (2) $10 million in any single year or $20 million in any combination of years for partnerships that have only corporations as partners, or $2 million in any single year or $4 million in any combination of years for all other partnerships; (3) $2 million in any single year or $4 million 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 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 transaction of interest.

The Fund Manager does not believe that investment in the Fund will constitute a reportable transaction pursuant to the foregoing.

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 such monetary penalty for failure to report, taxpayers subject to the reporting requirements of the Securities and Exchange Act of 1934 would be required to disclose in those reports such 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 Internal Revenue Code provides for uniform penalties at a flat rate of 20% 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% of the amount of the underpayment of tax attributable to the understatement. For most taxpayers, a substantial understatement occurs when the understated tax liability exceeds the greater of 10% of the correct tax required

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to be shown on the return or $5,000. For a corporation other than an S corporation or a personal holding corporation, a substantial understatement occurs when the understated tax liability exceeds the lesser of 10% of the correct tax required to be shown on the return (or if greater, $10,000), or $10,000,000.

In determining if a substantial understatement exists (or in calculating any resulting penalty), the tax attributable to a particular item will generally not be included if (i) there is, or was, substantial authority for the tax treatment of that item by the taxpayer, or (ii) the relevant facts affecting the item’s tax treatment were adequately disclosed in the return or in a statement attached to the return on the required IRS Form and there is a reasonable basis for the tax treatment. Treasury Regulations provide that substantial authority exists with respect to the treatment of an item only if the weight of the authority supporting the treatment is substantial in relation to the weight of authorities supporting contrary treatment. Regulations also provide that reasonable basis is a relatively high standard of tax reporting, that is significantly higher than not frivolous or not patently improper.

Neither the substantial authority nor the full disclosure exceptions are applicable to deductions attributable to investments in a tax shelter claimed by corporations. 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 Fund Manager does not believe that the principal purpose of the Fund is or will be the avoidance or evasion of federal income tax. If the Fund is found to be a “tax shelter” for purposes of Section 6662, the tax under Section 6662 would be operative unless, as required by Internal Revenue Code Section 6664, there was reasonable cause for taking the position relating to the understatement and the investor acted in good faith with respect to that position.

The foregoing provisions of Section 6662 do not apply, and the 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 avoidance transaction. Taxpayers who do not adequately disclose the transaction would be not be eligible for the reasonable cause exception and would be subject to a strict liability penalty equal to 30% of the understatement.

Interest rates for an underpayment of tax are set quarterly at the federal short-term rate plus 3%, except that the interest rate is set at the federal short-term rate plus 5% in the case of certain underpayments of tax by a C corporation. The rate for refunds on overpayments is set quarterly at the federal short-term rate plus 2%. Interest on underpayments or refunds is compounded daily. The Internal Revenue 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.

With regard to the tax consequences of an investment in Units, an investor’s use of counsel’s tax opinion letter is subject to the limitations of the Internal Revenue Code and Treasury Regulations as follows:

With respect to any material federal tax issue on which Derenthal&Dannhauser LLP has issued a “more likely than not” or more favorable opinion, its opinion may not be sufficient for an investor to use for the purpose of avoiding penalties relating to any substantial understatement of income tax under Section 6662(d) of the Internal Revenue Code.
ATEL has entered into a compensation arrangement with Derenthal&Dannhauser LLP to provide certain legal services to the Fund and its Affiliates, including its tax opinion letter. Consequently, tax counsel’s tax opinion letter was not written and cannot be used by an investor for the purpose of avoiding penalties relating to any reportable transaction understatement of income tax under Section 6662A of the Internal Revenue Code.

The limitations set forth above on an investor’s use of counsel’s tax opinion letter apply only for federal tax purposes. They do not apply to an investor’s right to rely on counsel’s tax opinion letter and the discussion in this “Federal Income Tax Consequences” section of this Prospectus under the federal securities laws.

Miscellaneous Fund Tax Aspects

Fees for the syndication of the Fund must be permanently capitalized.

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Fund organization fees must be capitalized and may be amortized over a 180-month period.
Fund start-up expenditures must be capitalized and may be amortized over a period of 180 months, beginning with the date on which the business begins.

U.S. Taxation of Foreign Persons

Special rules govern the U.S. federal income taxation of

nonresident alien individuals,
foreign corporations,
foreign partnerships, and
other foreign investors.

The rules are complex. No attempt is made herein to discuss the relevant rules. Foreign investors should consult their own tax advisors to fully determine the impact to them of United States federal, state and local income tax laws, including laws requiring withholding on Partnership income and/or distributions.

Future Federal Income Tax Changes

No one can predict what additional legislation, if any, may be proposed by

members of Congress
the current Administration, or
any subsequent administration.

No one can predict which proposals, if any, might ultimately be enacted. Moreover, no one can predict what changes may be made to existing Treasury Regulations, or what revisions may occur in IRS ruling policies. Any such changes may have a retroactive effect. Consequently, no assurance can be given that the federal income tax consequences of an investment in Units will continue to be as described in this Prospectus.

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. An investor’s distributive share of the income, gain or loss of the Fund 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, California and a number of other states in which the Fund may do business impose taxes on nonresident investors. The tax on nonresident investors generally is determined with reference to the pro rata share of Fund income derived from such states. Any tax losses associated with an investment in the Fund from operations in one state may not be available to offset income from other sources taxable in a different state.

California and a number of other 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. The Fund intends to withhold 7% of cash distributions to each investor, other than a tax exempt investor, who acquires more than 1,400 Units (representing a subscription of $14,000), unless the investor executes a representation that the investor will file a tax return in California. The Fund cannot estimate the percentage of its income that will be from other states which have adopted such withholding tax procedures. Therefore, the Fund cannot estimate the required withholding tax, if any.

Estate or inheritance taxes might be payable in any of the jurisdictions outlined above upon the death of an investor.

Investors may be subject to state tax rules which are less favorable than federal tax rules.

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Need for Independent Advice

The foregoing is not intended as a substitute for careful tax planning. The income tax consequences associated with an investment in the Fund are complex and certain of them will not be the same for all taxpayers. Accordingly, each prospective purchaser of Units is strongly urged to consult his own tax advisors with specific reference to his own tax situation.

ERISA CONSIDERATIONS

Prohibited Transactions Under ERISA and the Internal Revenue Code

Section 4975 of the Internal Revenue Code (which applies to all Qualified Plans and IRAs) and Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“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 Internal Revenue Code. “Disqualified persons” include fiduciaries of the Qualified Plan or IRA, officers, directors, Unit holders 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 Internal Revenue 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 Internal Revenue 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 the Fund’s assets were determined under ERISA or the Internal Revenue Code to be “plan assets” of Qualified Plans and/or IRAs holding Units, fiduciaries of such 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 the Fund might engage, including certain transactions with Affiliates of the Fund, might constitute prohibited transactions under the Internal Revenue Code and ERISA with respect to such Qualified Plans and IRAs, even if their acquisition of Units 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 Internal Revenue 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 a fiduciary to the qualified plan or IRA. ERISA and the Internal Revenue 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 the Units, which are undivided interests in the underlying assets of a collective investment entity such as the Fund, will not be treated as plan assets of qualified plan or IRA investors if:

the Units are deemed “publicly offered,” or
equity participation by benefit plan investors is not deemed “significant” because less than 25% of the Units are owned by qualified plans, IRAs and certain other employee benefit plans.

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To qualify for the publicly-offered exception, Units must be freely transferable, owned by at least 100 investors independent of the Manager and of one another, 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 the fiscal year during which the offering occurred. The Units are being sold as part of an offering registered under the Securities Act of 1933. Accordingly, whether Units will qualify for the publicly-offered exception will depend whether they are freely transferable within the meaning of the Department of Labor’s regulations.

Whether Units are freely transferable is a factual determination. However, the Manager believes that the limits on assigning Units and substitution of investors contained in the Operating Agreement fall within the scope of certain restrictions that are permitted by the Department of Labor regulations as consistent with the determination that securities are “freely transferable,” and that, based on these regulations, such restrictions should not cause a determination that the Units are not freely transferable.

In order to qualify for the exception for insignificant benefit plan equity participation described above, “benefit plan investors” must at all times hold less than 25% of the value of any class of equity interest in the entity. For this purpose, the value of any equity interests held by a person (other than a “benefit plan investor”) who has discretionary authority or control with respect to the assets of an entity or any person who provides investment advice for a fee (direct or indirect) with respect to such assets, or any affiliate of such a person, is disregarded. A “benefit plan investor” is any of the following:

any employee benefit plan (as defined in Section 3(3) of ERISA, which definition includes Qualified Plans), which is subject to the provisions of Title I of ERISA,
any plan described in Section 4975(e)(1) of the Internal Revenue Code (which description includes Qualified Plans and IRAs), and
any entity (such as a common or collective trust fund of a bank) whose underlying assets include plan assets by reason of a plan’s investment in the entity.

Whether the Fund’s assets will constitute “plan assets” will depend in large part on the Fund’s ability throughout its term to satisfy either the publicly-offered shares exception or the 25% ownership exception. The Manager will undertake to assure that the Fund at all times satisfies one or both of these exceptions.

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 Units 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 Units,
the investment will provide sufficient cash distributions in light of the Qualified Plan’s likely required benefit payments,
after an acquisition of Units, 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 Units 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 the Fund are sufficiently

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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 Internal Revenue Code’s prohibited transaction and other fiduciary duty rules.

SUMMARY OF THE OPERATING AGREEMENT

The Operating Agreement (attached as Exhibit B) is the governing instrument establishing the Fund’s right under the laws of the State of California to operate as a limited liability company, and contains the rules under which the Fund will be operated. Each subscriber for Units will execute the Operating Agreement by the subscriber’s execution of the Subscription Agreement (a specimen copy of which is attached to this Prospectus as Exhibit C) and tender of payment for the Units.

The following is a brief summary of the material provisions of the Operating Agreement. It is a summary only and it is recommended that each prospective investor review the Operating Agreement carefully in its entirety. Aspects of the Operating Agreement relating to allocations of Net Income, Net Loss and Distributions to Holders and reports to the Members are summarized elsewhere in this Prospectus (See the discussions in this Prospectus under the captions “Income, Losses and Distributions” above and “Reports to Holders” below.)

The Duties of the Manager

AGC 8 Managing Member, LLC is Manager of the Fund and has the exclusive management and control of all aspects of the business of the Fund. Affiliates of the Manager will perform certain asset acquisition, management and disposition services, as well as certain administrative services, for the Fund. In the course of its management, the Manager may, in its absolute discretion, acquire, hold title to, sell, or otherwise dispose of Portfolio Assets and interests therein when and upon such terms as it determines to be in the best interest of the Fund and employ such persons, including Affiliates of the Manager, as it deems necessary for the efficient operation of the Fund. However, prior to the sale or other disposition of Substantially All of the Assets of the Fund in any single 12-month period, except upon liquidation of the Fund, Holders owning more than 50% of the total outstanding Units must consent to such sale or other disposition.

In addition, Section 15.4 imposes a variety of other restrictions on the Manager’s authority in governing the Funds operations, including limits on transactions between the Manager and its Affiliates and the Fund, limits on Fund borrowing, and limits on Fund investments and reinvestment of cash flow. Among other things, Section 15.4 provides that the Manager may not (i) cause the Fund to loan any funds or property to any Manager or Affiliate of a Manager; (ii) cause the Fund to borrow from any of the Manager or its Affiliates on terms which provide for interest, financing charges or fees in excess of the amounts charged by unrelated lending institutions on comparable loans for the same purpose, or in excess of the lender’s cost of funds, or, in any event, to cause the Fund to obtain “permanent financing” (defined as financing with a term in excess of 12 months) from any such Person; (iii) commingle Fund cash or assets with those of any other Person; (iv) cause the Fund to make distributions in kind except to a liquidating trust; or (v) cause the Fund to pay, directly or indirectly, a commission or fee (except as otherwise expressly permitted under the Operating Agreement) to the Manager or its Affiliates in connection with the reinvestment or distribution of Cash Available for Distribution or of the proceeds of the resale, exchange or refinancing of Fund Portfolio Assets.

The Manager may not voluntarily withdraw from the Fund without the approval of Members holding more than 50% of the total outstanding Units entitled to vote. The Manager may be removed upon a vote of Holders owning more than 50% of the total outstanding Units entitled to vote. The effects of termination of the Manager, including the treatment of payments to, and the interest in the Fund of, the Manager upon termination are governed by Section 17.5 of the Operating Agreement attached as Exhibit B.

Liability of Holders

A Holder’s capital is subject to the risks of the Fund’s business. He is not permitted to take any part in the management or control of the business and he may not be required to contribute additional capital at any time. Under the California Act, a Holder will not be liable for Fund obligations in excess of his unreturned capital contribution and share of undistributed profits. Notwithstanding the foregoing, a Holder will be liable

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to the Fund in an amount equal to any Distribution made by the Fund to such Holder to the extent that, immediately after the Distribution is made, all liabilities of the Fund, other than liabilities to Members on account of their interest in the Fund and liabilities as to which recourse of creditors is limited to specified property of the Fund, exceed the fair value of the Fund assets, provided that the fair value of any property that is subject to a liability as to which recourse of creditors is so limited is included in the Fund assets only to the extent that the fair value of the property exceeds such liability.

Term and Dissolution

The Fund was formed on December 8, 2011 and will continue until it has liquidated all of its assets or if other specified contingencies occur, as described in the following paragraph. The Fund intends to liquidate its assets and distribute the proceeds thereof beginning after the Reinvestment Period expires (at the end of the sixth calendar year following the year in which the offering of Units terminates) with final liquidation expected to occur approximately ten years after the termination of the offering of Units. A Holder may not withdraw from the Fund prior to dissolution, but may assign his Units to others or may, under certain circumstances, request that the Fund repurchase his Units. See “Repurchase of Units” below under this caption.

The contingencies whereupon the Fund may be dissolved are as follows:

The Fund becomes insolvent or bankrupt;
The removal, adjudication of bankruptcy, insolvency, disability or incompetence or dissolution or death of the Manager unless (i) there is a remaining Manager, and the remaining Manager, within 45 days of the date of such event, elects to continue the business of the Fund or (ii) if, upon removal of the last remaining Manager, the Members holding in excess of 50% of the outstanding Units elect a successor Manager prior to the effective date of removal and such successor Manager elects to continue the business of the Fund;
An election to dissolve upon the vote of Members owning more than 50% of the total outstanding Units; or
The disposition of all assets of the Fund and the receipt by the Fund of the proceeds of such disposition.

In order to effect an orderly liquidation of the Fund’s assets in its liquidation stage, the Manager may cause the Fund to sell Portfolio Assets to a liquidating trust, or to the Manager or an Affiliate (other than another investor program), either in its own name, or as a trustee of a liquidating trust, provided that, in any sale to the Manager or an affiliate, all of the following conditions have been met:

the Fund has obtained, at its cost, two independent appraisals of the fair market value of the item or items of Portfolio Assets to be sold;
the sales price of the Portfolio Assets is at least equal to the average of the two appraised values;
the original cost of the Portfolio Assets sold in this manner does not represent in excess of 10% of the original cost of all Portfolio Assets acquired by the Fund during the term of the Fund;
such sale is effected in the best interests of the Fund and its Members for purposes of facilitating liquidation; and
the Portfolio Assets so sold is not resold to another investor program sponsored by the Manager or its Affiliates.

Voting Rights of Members

In any vote of the Members, each Member will be entitled to cast one vote for each Unit which such Member owns as of the date designated as the record date for such vote. Notwithstanding the foregoing, Units held by the Manager or any Affiliate of the Manager will not be entitled to vote, and will not be deemed to be “outstanding” for purposes of any vote, upon matters which involve a conflict between the interests of the Manager and the Fund, including, but not limited to, any vote on the proposed removal or withdrawal of the

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Manager as Manager or any proposed amendment to the Operating Agreement which would expand or extend the rights, authorities or powers of the Manager. The Members have the right, by vote of Members owning more than 50% of the total outstanding Units, to vote upon:

(a) Removal or voluntary withdrawal of the Manager;

(b) Election of a successor Manager;

(c) Termination and dissolution of the Fund;

(d) Amendment of the Operating Agreement, provided such amendment is not for the purpose of reflecting the addition or substitution of Members, the reduction of Capital Accounts or for any other purposes prohibited under the Operating Agreement as described below;

(e) The sale or other disposition of Substantially All of the Assets in a single sale, or in multiple sales in the same twelve-month period, except in the orderly liquidation and winding up of the business of the Fund in the ordinary course of business; and

(f) The extension of the term of the Fund.

Without the consent of the Members to be adversely affected by the amendment, the Operating Agreement may not be amended so as to

convert a Holder into a Manager;
modify the limited liability of a Holder;
alter the interest of the Members in Net Income, Net Loss and Distributions; or
affect the status of the Fund as a partnership for federal income tax purposes.

Dissenters’ Rights and Limitations on Mergers and Roll-ups

Section 16.7 of the Operating Agreement provides that Members holding not less than 90% of the outstanding Units must approve any proposal that involves an acquisition, conversion, merger or consolidation transaction in which the Holders are issued new securities in the resulting entity. The rights of any dissenting Holders will be as provided under Section 16.7 and Sections 17600 through 17613 of the California Act. Such provisions generally give a dissenting Member the right, subject to certain procedural requirements, to require that the company repurchase the dissenting Member’s interest at a price equal to its fair market value.

Meetings

The Manager may at any time call a meeting of the Members or a vote of the Members without a meeting, on matters on which they are entitled to vote, and shall call such meeting or for a vote without a meeting following receipt of a written request therefore of Members holding 10% or more of the total outstanding Units. Upon such written request of Members holding 10% or more of the total outstanding Units, such Members may propose a vote by all Members on any matter on which Members are entitled to vote under the Operating Agreement.

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Books of Account and Records

The Manager is responsible for keeping books of account and records of the Fund reflecting all of the contributions to the capital of the Fund and all of the expenses and transactions of the Fund. Such books of account and records will include the following:

(i) A current list of the full name and last known business or residence address of each Member set forth in alphabetical order together with the Capital Contribution, the Units held and the share in Net Income and Net Loss of each Member;

(ii) A copy of the articles of organization and all amendments;

(iii) Copies of the Fund’s federal, state and local income tax or information returns and reports, if any, for the six most recent taxable years;

(iv) Copies of the original of the Operating Agreement and all amendments;

(v) Financial statements of the Fund for the six most recent fiscal years; and

(vi) The Fund’s books and records for at least the current and past three fiscal years.

Such books of account and records will be kept at the principal place of business of the Fund in the State of California, and each Member and his authorized representatives shall have, at all times during reasonable business hours, free access to and the right to inspect and copy at their expense such books of account and all records of the Fund. Upon the request of a Member, the Manager shall promptly deliver to such Member at the expense of the Fund a copy of the information described in (i), (ii) and (iv) above. In the event a Member is required to compel the Manager to produce the foregoing records as a result of the Manager’s breach of its obligation to deliver such information, the Manager shall reimburse the Member for all reasonable costs actually incurred in compelling production.

Status of Units

Each Unit will be fully paid and non-assessable and all Units have equal voting and other rights, except as noted above with respect to the voting of Units held by the Manager or its Affiliates.

Transferability of Units

The Fund may charge a reasonable transfer fee for processing requests for transfer of Units, and may condition the effectiveness of any proposed transfer of Units or an interest in Units on such representations, warranties, opinions of counsel, and other assurances as it considers appropriate as to:

(i) such assignment or transfer not resulting, in the opinion of counsel for the Fund, in the Fund being considered to have terminated within the meaning of Section 708 of the Code;

(ii) the transferee not being a minor or an incompetent;

(iii) the transfer or assignment not violating federal or state securities laws;

(iv) the transferor or the transferee not holding Units representing a Capital Contribution of less than $5,000;

(v) such assignee or transferee being a Citizen of the United States;

(vi) such assignment or transfer not constituting a transfer “on a secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code or otherwise adversely affecting the tax status of the Fund;

(vii) such assignment or transfer not causing Fund assets to be deemed Plan Assets under ERISA; and

(viii) the transferor filing with the Fund a duly executed and acknowledged counterpart of the instrument effecting such assignment or transfer, which instrument evidences the written acceptance by

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the assignee or transferee of all of the terms and provisions of the Operating Agreement, contains a representation that such assignment or transfer was made in accordance with all applicable laws and regulations (including any investor suitability requirements) and in all other respects is satisfactory in form and substance to the Manager.

In connection with state securities laws restrictions on transfer, Section 260.141.11 of the Rules of the California Commissioner of Corporations states:

(a) The issuer of any security upon which a restriction on transfer has been imposed pursuant to Section 260.141.10 or 260.534 of the Rules of the California Corporations Commissioner shall cause a copy of this section to be delivered to each issuee or transferee of such security at the time the certificate evidencing the security is delivered to the issuee or transferee.

(b) It is unlawful for the holder of any such security to consummate a sale or transfer of such security, or any interest therein, without the prior written consent of the Commissioner (until this condition is removed pursuant to Section 260.141.12 of the Rules of the California Corporations Commissioner), except: (1) to the issuer; (2) pursuant to the order or process of any court; (3) to any person described in Subdivision (i) of Section 25102 of the Corporations Code of the State of California or Section 260.105.14 of the Rules of the California Corporations Commissioner; (4) to the transferor’s ancestors, descendants, or spouse, or any custodian or trustee for the account of the transferor or the transferor’s ancestors, descendants, or spouse; or to a transferee by a trustee or custodian for the account of the transferee or the transferee’s ancestors, descendants, or spouse; (5) to holders of securities of the same class of the same issuer; (6) by way of gift or donation inter vivos or on death; (7) by or through a broker-dealer licensed under the Corporations Code of the State of California (either acting as such or as a finder) to a resident of a foreign state, territory, or country who is neither domiciled in the State of California to the knowledge of the broker-dealer, nor actually present in the State of California if the sale of such securities is not in violation of any securities law of the foreign state, territory, or country concerned; (8) to a broker-dealer licensed under the Corporations Code of the State of California in a principal transaction, or as an underwriter or member of an underwriting syndicate or selling group; (9) if the interest sold or transferred is a pledge or other lien given by the purchaser to the seller upon a sale of the security for which the California Corporations Commissioner’s written consent is obtained or is not required under Section 260.141.11 of the Rules of the California Corporations Commissioner; (10) by way of a sale qualified under Section 25111, 25112, 25113, or 25121 of the Corporations Code of the State of California, of the securities to be transferred, provided that no order under Section 25140 or subdivision (a) of Section 25143 of the Corporations Code of the State of California is in effect with respect to such qualification; (11) by a corporation to a wholly-owned subsidiary of such corporation, or by a wholly-owned subsidiary of a corporation to such corporation; (12) by way of an exchange qualified under Section 25111, 25112, or 25113 of the Corporations Code of the State of California, provided that no order under Section 25140 or subdivision (a) of Section 25143 of the Corporations Code of the State of California is in effect with respect to such qualification; (13) between residents of foreign states, territories, or countries who are neither domiciled nor actually present in the State of California; (14) to the California State Controller pursuant to the Unclaimed Property Law or to the administrator of the unclaimed property law of another state; or (15) by the California State Controller pursuant to the Unclaimed Property Law or by the administrator of the unclaimed property law of another state if, in either such case, such person (i) discloses to potential purchasers at the sale that transfer of the securities is restricted under Section 260.141.11 of the Rules of the California Corporations Commissioner, (ii) delivers to each purchaser a copy of Section 260.141.11 of the Rules of the California Corporations Commissioner, and (iii) advises the California Corporations Commissioner of the name of each purchaser; (16) by a trustee to a successor trustee when such transfer does not involve a change in the beneficial ownership of the securities; provided that any such transfer is on the condition that any certificate evidencing the security issued to such transferee shall contain the legend required by Section 260.141.11 of the Rules of the California Corporations Commissioner; or (17) by way of an offer

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and sale of outstanding securities in an issuer transaction that is subject to the qualification requirement of Section 25110 of the Corporations Code but exempt from that qualification requirement by subdivision (f) of Section 25102; provided that any such transfer is on the condition that any certificate evidencing the security issued to such transferee shall contain the legend required by this section.

(c) The certificates representing such securities subject to such a restriction on transfer, whether upon initial issuance or upon any transfer thereof, shall bear on their face a legend, prominently stamped or printed thereon in capital letters of not less than 10-point size, reading as follows:

“IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER’S RULES.”

Any assignment, sale, exchange or other transfer in contravention of any of the provisions of the Operating Agreement shall be void and ineffectual, and shall not bind or be recognized by the Fund.

An Assignee of Record will be entitled to receive allocations and Distributions from the Fund attributable to the Units acquired by reason of such assignment from and after the effective date of the assignment of such Units to him; provided, however, the Fund and the Manager will be entitled to treat the assignor of such Units as the absolute owner thereof in all respects, and will incur no liability for allocations of Net Income, Net Loss or Distributions, or transmittal of reports and notices requested to be given to Holders which are made in good faith to such assignor until such time as the written instrument of assignment has been received by the Fund and recorded on its books and the effective date of an assignment of Units has passed. The effective date of an assignment of Units and the date on which the Assignee shall be deemed an Assignee of Record shall be the first day of the month following the later of (i) the date set forth on the written instrument of assignment, or (ii) the date on which the Fund has actual notice of the assignment.

All costs and expenses incurred by the Fund in connection with the transfer of a Unit shall be paid by the transferring Holder.

An Assignee may only be substituted as a Member in the place of the assignor with the prior consent of the Manager, which consent may be withheld in the Manager’s sole discretion. Any substituted Member must also agree to be bound by the provisions of the Operating Agreement. The Manager shall cause the Operating Agreement to be amended to reflect the substitution of Members at least once in each fiscal quarter.

The Manager will, with respect to any Units owned by it, enjoy all of the rights, other than the right to request that the Fund repurchase any such Units, and be subject to all of the obligations and duties of a Member, except as noted above under “Voting Rights of Members.”

Repurchase of Units

The Manager may, in its discretion and on such terms as it deems appropriate, repurchase Units upon the request of a Unit holder in the event that it deems such repurchase in the best interests of the Fund, but the Fund is in no event required to make any such repurchase. No such repurchase may be effected if it would impair the capital of the Fund or cause the Fund or any remaining Unit holder to suffer a material adverse tax consequence. It is the Fund’s intention that any voluntary redemption would be for a price equal to the original capital invested in the redeemed Units less the amount of cash distributed on the Units prior to redemption and less the amount of commissions paid to broker dealers on the investment in Units, unless such commissions are refunded by such broker dealers. The Fund may, however, redeem Units on any other terms it may deem appropriate and in the best interests of the Fund under the circumstances surrounding the redemption. Unit Holders will have no right to any redemption. There will be no appraisal of Units, no fixed order for redemption, with redemption in the discretion of the Manager in the exercise of its fiduciary duty, and no redemption of any Units held by the Manager and its Affiliates until all Member requests have been met. Only available Fund cash flow and reserves will be used to redeem Units. Redemption of a Member’s Units will be deemed a disposition of the investment and the consequences of dispositions of Units are discussed under “Federal Income Tax Consequences — Disposition of Units” above in this Prospectus. There are no time

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periods for consideration of redemption requests, though the Manager will attempt to respond promptly to any inquiry in this regard. There is no procedure for allocating funds for multiple requests, and no specific formal procedure for requesting redemption, though all such requests must be in writing.

Where the Manager receives requests for repurchase, it may, as noted above, accept or reject the request in its sole discretion. However, it will be the Manager’s policy to give priority to requests, regardless of when each request is received, based on the following considerations in order:

first, to cases of investor hardship (e.g. to meet requests for liquidity arising from death, major medical expense, family emergency, disability, a material loss of family income or similar unexpected liquidity demands);
second, to provide liquidity necessary for IRAs or qualified plans to make mandatory distributions; and
third, to all other repurchase requests.

Upon any repurchase of Units by the Fund, the Units will be canceled and will no longer be deemed to represent an interest in the Fund, and the interests of all other Unit holders will be adjusted accordingly.

Indemnification of the Manager

The Operating Agreement provides that the Manager and its affiliates who perform services for the Fund will be indemnified against any liability or loss arising out of any act or omission by any such Person when acting in connection with the business of the Fund, provided that such Person determines in good faith that its conduct was in the best interest of the Fund and, provided further, that its conduct did not constitute fraud, negligence, breach of fiduciary duty or misconduct. The Operating Agreement also provides that, to the extent permitted by law, the Fund will indemnify the Manager against liability and related expenses (including attorneys’ fees) incurred in dealing with third parties, provided that the conduct of the Manager is consistent with the standards described in the preceding sentence. A successful claim for such indemnification would deplete the Fund’s capital assets by the amount paid.

The Manager will not be indemnified against liabilities arising under the Securities Act of 1933. Furthermore, the Manager has agreed to indemnify the Fund against any loss or liability it may incur as a result of any violation of state or federal securities laws by the Manager or its Affiliates. The Fund will not pay for any insurance covering liability of the Manager or any other persons for actions or omissions for which indemnification is not permitted by the Operating Agreement, provided, however, that this will not preclude the naming of the Manager or any Affiliates as additional insured parties on policies obtained for the benefit of the Fund to the extent that there is no additional cost to the Fund.

The Manager will have fiduciary responsibility for the safekeeping and use of all funds and assets of the Fund.

PLAN OF DISTRIBUTION

Distribution

The Units will be offered and sold on a “best efforts minimum/maximum” basis through ATEL Securities Corporation (the “Dealer Manager”), a broker-dealer which is an Affiliate of the Manager (see “Conflicts of Interest” and “Management”), and through other participating broker-dealers who are members of the Financial Industry Regulatory Authority (“FINRA”). The Dealer Manager will manage the selling group and provide certain wholesaling services. Although the Dealer Manager may participate in the offering on the same basis as other broker-dealers, it has not in the past effected, nor does it anticipate in this offering directly effecting, any significant sales of the Units. The Dealer Manager will only directly effect sales of Units in those jurisdictions in which it and its personnel are licensed to do so.

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The Dealer Manager is a wholly-owned subsidiary of ATEL formed solely to manage offerings sponsored by ATEL and its Affiliates. No other broker dealer has or will have any material relationship with the Fund other than acting as a participating broker dealer in this offering through an underwriting agreement entered into with the Dealer Manager. The Dealer Manager will be an underwriter with respect to the offering of Units and all compensation received by the Dealer Manager in connection with the offering will be underwriting compensation.

The minimum offering amount is $1,200,000 (120,000 Units) and the maximum is $75,000,000 (7,500,000 Units). The minimum subscription is 500 Units ($5,000). Additional investments may subsequently be made in a minimum amount of 50 Units ($500), and additional one-Unit ($10) increments.The broker-dealers are not obligated to obtain any subscriptions, and there is no assurance that any Units will be sold.

Subscriptions will be effective only on acceptance by the Manager and the right is reserved to reject any subscription in whole or in part. The Fund will advise the subscriber of the acceptance or rejection of the subscription as soon as practicable after receipt of the subscription, but in no event more than 30 days following receipt. The Subscription Agreement provided to the investor for execution must be accompanied by a copy of this Prospectus, and each subscriber has the right to cancel his or her subscription during a period of five business days after the subscriber has submitted the executed Subscription Agreement to the broker-dealer through which the Units are sold, and the Fund will promptly refund the amount of any such canceled subscription. The Fund and/or the selling broker-dealer will send each investor a written confirmation of the acceptance of the investor’s subscription for Units upon admission to the Fund.

The offering will terminate on a date not later than two years from the date of this Prospectus. The offering of Units after the end of one year from the date hereof will be subject to renewal or re-qualification in all those jurisdictions requiring such renewal or re-qualification. However, the offering may be terminated at any time by the Manager. If subscriptions for a minimum of 120,000 Units have not been received and accepted prior to a date one year from the date hereof, all funds received will be promptly returned without deduction together with any interest earned thereon.

Selling Compensation and Certain Expenses

The Dealer Manager will receive selling commissions in an amount equal to 9% of the Gross Proceeds, and will reallow to participating broker-dealers selling commissions equal to 7% of the Gross Proceeds attributable to Units sold by them. Out of the 2% of the selling commissions retained by the Dealer Manager, it will pay wholesaling compensation in the form of salaries and commissions to its personnel.

The Fund, the Manager, or its affiliates, will pay or reimburse the Dealer Manager and participating dealers, or will otherwise bear, a portion of “underwriters’ expenses” incurred in connection with the offering. Such payments or reimbursements will constitute additional selling compensation. The amounts characterized as “underwriters’ expenses” will represent actual out of pocket expenses incurred in connection with the distribution, and in the aggregate will not exceed an amount up to 1% of the Gross Proceeds. These underwriters’ expenses include amounts paid by the Fund, the Manager or its Affiliates to the Dealer Manager and participating broker dealers relating to sales seminar costs and expenses; advertising and promotion expenses; travel, food and lodging costs; telephone expenses; non accountable due diligence expense reimbursements; and an allocable portion of the Dealer Manager’s salary expenses and legal fees borne by the Manager or its Affiliates. A portion of such expenses may also be paid by the Dealer Manager to one or more participating dealers out of the 2% commissions retained by the Dealer Manager, in the form of expense reimbursements, marketing allowances and the like. All of such amounts paid to the Dealer Manager or participating broker dealers, all underwriters’ expenses borne on behalf of the Dealer Manager or any participating broker dealer by the Fund or any other party on its behalf, and all selling commissions are together deemed “underwriting compensation” paid in connection with the offering. The total of all underwriting compensation, including sales commissions, wholesaling salaries and commissions, retail and wholesaling expense reimbursements, seminar expenses and any other underwriters’ expenses or other forms of compensation paid to or for the Dealer Manager or participating broker-dealers, will not exceed 10% of the Gross Proceeds.

In addition to payment of selling commissions and other items of selling compensation, the Fund may pay or reimburse participating broker-dealers for accountable expenses incurred in connection with bona fide due

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diligence activities upon presentation of detailed, itemized invoices for such bona fide due diligence expenses. Bona fide due diligence expenses will include actual costs incurred by broker-dealers to review the business, financial statements, transactions, and investments of ATEL and its prior programs to determine the accuracy and completeness of information provided in this Prospectus, the suitability of the investment for their clients and the integrity and management expertise of ATEL and its personnel. Costs may include telephone, postage and similar communication costs incurred in communicating with ATEL personnel, and ATEL’s outside accountants and counsel in this pursuit; travel and lodging costs incurred in visiting the ATEL offices, reviewing ATEL’s books and records and interviewing key ATEL personnel; the cost of outside counsel, accountants and other due diligence investigation specialists engaged by the broker-dealer; and the internal costs of time and materials expended by broker-dealer personnel in this due diligence effort. ATEL will require full itemized documentation of any claimed due diligence expenditure and will determine whether the expenditure can be fairly allocated to bona fide due diligence investigation before permitting reimbursement.

The Manager has agreed to indemnify the participating broker-dealers, including the Dealer Manager, against certain liabilities arising under the Securities Act of 1933, as amended.

The Fund will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of Units.

Escrow Arrangements

Until the minimum number of subscriptions are received and the initial subscribers are admitted to the Fund, subscription checks will be made payable to, and subscription funds will be held in an escrow account at, U.S. Bank, National Association, San Francisco, California (the “Bank”). Until such time all participating broker-dealers will forward subscription checks to the Dealer Manager promptly but in no event later than noon of the next business day following receipt thereof, and the Dealer Manager will forward such subscriptions to the bank escrow agent promptly, but in no event later than noon of the second business day following receipt thereof by the Dealer Manager.

Subscription proceeds held in the escrow account will be invested in United States government securities, including Treasury bills, securities issued or guaranteed by United States government agencies, certificates of deposit and time or demand deposits in banks and savings and loan associations which are insured by United States government agencies or deposits in members of the Federal Home Loan Bank System, as directed by the Manager. Subscribers may not withdraw funds from the escrow account. Upon the earlier of termination of the offering or satisfaction of the escrow condition, any interest which accrues on funds held in escrow will be distributed to subscribers and allocated among them on the basis of the respective amounts of the subscriptions and the number of days that such amounts were on deposit in the escrow account.

Notwithstanding the foregoing, subscriptions received from Pennsylvania subscribers will be placed in a separate escrow account and will not be counted toward satisfaction of the minimum escrow condition. Instead, such Pennsylvania subscriptions will be released to the Fund only at such time as total subscription proceeds received by the Fund from all subscribers, including the escrowed Pennsylvania subscriptions, equal not less than $3.75 million in Gross Proceeds.

The Capital Contributions of the initial subscribers will be transferred from escrow to the Fund at any time after subscriptions for the minimum of 120,000 Units have been accepted by the Manager and received and collected by the bank escrow agent, and such subscribers will be admitted to the Fund within 15 days thereafter. Subsequent subscribers will have their subscriptions accepted or rejected within 30 days after receipt. Investors whose subscriptions are accepted will be admitted to the Fund promptly after such acceptance, but not later than 30 days thereafter. Rejected subscription funds will be promptly returned. If a minimum of $1,200,000 in cash subscriptions for Units is not received by a date one year from the date of this Prospectus, or if the offering is otherwise terminated prior to such minimum funding, all subscription proceeds deposited in the escrow account will be promptly returned to investors together with any interest earned on such proceeds during the escrow period.

The Bank’s sole role in this offering is that of escrow holder and as such it has not reviewed any of the offering materials and makes no representations whatsoever as to the nature of this offering or its compliance or lack thereof with any applicable state or federal laws, rules or regulations. The Bank neither endorses,

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recommends nor guarantees the purchase, value or repayment or any other aspect of an investment in the Units. The Bank does not represent the interests of the Members or potential investors. Its duties are limited as expressly set forth in the Escrow Agreement and interested parties may request a copy of the Escrow Agreement from the Manager. Pursuant to the terms of the Escrow Agreement, the Fund has directed the Bank to distribute to the subscribers any interest earned on funds held in escrow as described above under this caption.

Investments by Certain Persons

The Manager and its Affiliates may, but do not currently intend to, acquire such number of Units as they determine. Except as noted below, any Units purchased by the Manager or its Affiliates will be purchased on the same terms as the other Units offered hereby. Such Units will be acquired solely for investment and not with a view to or for distribution. Any Units acquired by the Manager or its Affiliates and participating broker dealers or their affiliates will not be applied to the requirement that a minimum of 120,000 Units be purchased by all subscribers.

The Manager, the Dealer Manager or the broker-dealers engaged by the Dealer Manager to sell the Units, or any of their Affiliates or employees, may purchase Units in this offering net of the 7% retail selling commissions at a per Unit price of $9.30. In addition, clients of an investment advisor which is registered under the Investment Advisors Act of 1940 may also purchase Units with reduced selling commissions if

the client has been advised by such advisor over a continuous course of time on investments other than the purchase of Units,
the client is not being charged by the advisor or its Affiliates, other than as described herein, for the advice rendered by such advisor specifically in connection with the purchase of Units,
the investment advisor enters into an appropriate agreement with the Dealer Manager undertaking to comply with all securities laws relating to the offering of Units and representing the suitability for such clients of an investment in Units, and
either (i) the investment advisor is an Affiliate of a broker-dealer, and the transaction has the express approval of such broker-dealer Affiliate, or (ii) the investment advisor is not affiliated with any broker dealer and the Dealer Manager agrees to act as broker of record for the investment advisor’s client with respect to the investment in Units.

In no event will the net contribution to the Fund by such persons be less than $9.30 per Unit. The Dealer Manager may require that any investor claiming the right to purchase on the foregoing terms demonstrate the basis for such right through reasonable documentation and certification. Sales to any such purchasers on such terms would be for investment purposes only, and the Fund and the Manager would not recognize any attempted transfer of such Units unless the Manager is satisfied that the original purchase was not made with a view to distribution of the securities and that any proposed transfer was in compliance with all applicable laws and regulations, including the FINRA Rules of Fair Practice.

State Requirements

In addition to the investor suitability and minimum investment standards established by the Fund and described under “Who Should Invest” above, the securities administrators of certain states have imposed more restrictive standards on investments in Units effected within their jurisdictions. Any such additional requirements imposed after the date of this Prospectus will be reflected in a supplement hereto, and investors are urged to review any such supplement to ascertain whether more restrictive standards are applicable to their investment.

REPORTS TO HOLDERS

The Fund fiscal year will be the calendar year; provided, however, that the Manager may, subject to the approval of applicable taxing authorities, adopt another fiscal year if they deem it to be in the Fund’s best interest.

The Manager shall have prepared and distributed to the Holders at least annually, at Fund expense, financial statements (each of which shall include a balance sheet, statement of income or loss, statement of

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Members’ equity, and statement of cash flow) prepared in accordance with generally accepted accounting principles and accompanied by a report thereon containing an opinion of an independent certified public accounting firm. Such opinion shall also state that reported “Cash Available for Distribution” is consistent with the definition of Cash Available for Distribution in the Operating Agreement. Copies of such statements and report shall be distributed to each Holder within 120 days after the close of each taxable year of the Fund.

The Manager shall have prepared and distributed to the Holders at least annually, at Fund expense: (i) a statement of cash flow, (ii) Fund information necessary in the preparation of the Holders’ and Assignees’ federal income tax returns; (iii) a report of the business of the Fund, which shall include a status report for each portfolio investment which individually represents at least 10% of the Fund’s total investment portfolio indicating: (a) the condition of the Portfolio Assets, (b) how the Portfolio Assets are being held by the Fund as of the end of the year, (c) the remaining term of each Portfolio Asset financing transaction, (d) the projected status of Portfolio Assets for the next year, and (e) such other information relevant to the value or use of the Portfolio Assets as the Manager deems appropriate, including the method used as basis for valuation; (iv) a statement as to the compensation received by the Manager and its Affiliates from the Fund during the year, which statement shall set forth the services rendered or to be rendered by the Manager and its Affiliates and the amount of fees received; (v) a report identifying Distributions from: (a) Cash Available for Distribution for that year, (b) Cash Available for Distribution of prior years held in reserves, (c) Net Disposition Proceeds, and (d) Cash from Reserve Account and other sources; and (vi) a special report prepared in accordance with the American Institute of Certified Public Accountants United States Auditing Standards relating to special reports, containing an opinion of an independent certified public accounting firm, to report the breakdown of the costs reimbursed by the Fund to the Manager or its Affiliates. Such special report shall at a minimum provide: (a) a review of the time records of individual employees, the costs of whose services were reimbursed, and (b) a review of the specific nature of the work performed by each such employee. The additional costs of such special report shall be itemized by the auditors among all programs sponsored by the Manager and its Affiliates on a program-by-program basis and may be reimbursed to the Manager or its Affiliates to the extent that such reimbursement, when added to the cost for administrative services rendered, does not exceed the competitive rate for comparable services performed by independent parties in the same geographic location.

In addition to the foregoing information in annual reports, the Manager will disclose in each annual report filed with the Commission or distributed to investors pursuant to Section 13(a) of the Securities Exchange Act of 1934 an estimated value per Unit as of the end of the year that is the subject of the report, the method by which the value has been estimated, and the date of the data used to develop the estimated value.

Copies of the reports hereunder shall be distributed to each Holder within 120 days after the close of each taxable year of the Fund; provided, however, that all Fund information necessary in the preparation of the Holders’ and Assignees’ federal income tax returns shall be distributed to each Holder and Assignee not later than 75 days after the close of each taxable year of the Fund. The Manager shall have prepared quarterly, at Fund expense, commencing with the first full quarter after the Closing Date: (i) a statement as to the compensation received by the Manager during such quarter from the Fund which statement shall set forth the services rendered or to be rendered by the Manager during such quarter from the Fund and the amount of fees received, and (ii) other relevant information. Copies of such statements shall be distributed to each Holder within 60 days after the end of each quarterly period.

The Manager shall have prepared, at Fund expense, a quarterly report covering each of the first three quarters of Fund operations in each calendar year, unaudited financial statements (each of which shall include a balance sheet, statement of income or loss for said quarterly period and statement of Cash Available for Distribution and Net Disposition Proceeds for said quarterly period) and a statement of other pertinent information regarding the Fund and its activities during the quarterly period covered by the report. Copies of such statements and other pertinent information shall be distributed to each Holder within 60 days after the close of the quarterly period covered by the report of the Fund.

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The Manager shall have prepared, at Fund expense, after the end of each quarter in which Portfolio Assets are acquired and until the Net Proceeds are fully invested or returned to investors, a notice which shall describe therein: (i) a statement of the actual purchase price of the Portfolio Assets, including the terms of the purchase, (ii) a statement of the total amount of cash expended by the Fund to acquire such items of Portfolio Assets (including and itemizing all commissions, fees, expenses and the name of each payee), and (iii) a statement of the amount of proceeds in the Fund which remain unexpended or uncommitted. Copies of such notice shall be distributed to each Holder within 60 days after the end of such quarter. If deemed appropriate by the Manager such notice may be prepared and distributed to each Holder more frequently than quarterly.

The Manager, at Fund expense, shall cause income tax returns for the Fund to be prepared and timely filed with appropriate authorities.

The Manager, at Fund expense, shall cause to be prepared and timely filed with appropriate federal and state regulatory and administrative bodies, all reports required to be filed with such entities under then current applicable laws, rules and regulations. Such reports shall be prepared on the accounting or reporting basis required by such regulatory bodies. Any Holder shall be provided with a copy of any such report upon request without expense to him. Reports filed with the Securities and Exchange Commission, including all annual, quarterly and current reports, are available to be viewed and retrieved without charge on the Commission’s electronic data gathering and retrieval (EDGAR) system, at its internet web site at http://www.sec.gov, and can be accessed with a search under the Fund’s name. Copies of such reports as filed with government agencies may also be requested directly from the Fund at the Fund’s web site, mailing address, telephone number and/or electronic mail address, in each case as provided in the quarterly and annual reports to be delivered to investors as described above.

SUPPLEMENTAL SALES MATERIAL

In addition to and apart from this Prospectus, the Fund may use certain sales material in connection with the offering of Units. In certain jurisdictions such sales material may not be available. This material will include information relating to this offering, the Manager and its Affiliates and brochures and articles and publications concerning growth capital investments, acquisition financing and other asset financing.

The Fund will use only sales material which has been approved by such appropriate regulatory bodies as may be required. The offering is made only by means of this Prospectus. Although the information contained in such sales material does not conflict with any of the information contained in this Prospectus, and is required to present a balanced discussion of the risks and rewards of investing in the Fund, such material does not purport to be complete, and should not be considered as part of this Prospectus or the registration statement of which this Prospectus is a part, or as incorporated by reference in this Prospectus or said registration statement or as forming the basis of the offering of Units which are offered hereby.

LEGAL OPINIONS

The legality of the Units has been passed upon and the statements under the caption “Income Tax Consequences” as they relate to federal income tax matters have been reviewed and passed upon by Derenthal & Dannhauser LLP, Oakland, California.

EXPERTS

Moss Adams LLP, independent registered public accounting firm, have audited the Fund’s balance sheet as of December 13, 2011, and the related statements of changes in members’ capital and cash flows for the period from December 8, 2011 (date of inception) through December 13, 2011, as set forth in their report. The Fund has included the financial statement in the prospectus in reliance on Moss Adams LLP’s report, given on their authority as experts in accounting and auditing.

Moss Adams LLP, independent certified public accountants, have audited the balance sheet of AGC 8 Managing Member, LLC as of December 13, 2011, as set forth in their report. The Fund has included the balance sheet in the prospectus in reliance on Moss Adams LLP’s report, given on their authority as experts in accounting and auditing.

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FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements concerning the Fund’s objectives, plans, intentions, strategies, expectations, and predictions concerning the Fund’s future investment activities, results of operations and other future events or conditions based on views and opinions of the 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,” “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 such forward-looking statements, due to a variety of factors, some of which may be beyond the control of the Fund. See “RISK FACTORS” and “MANAGEMENT — Conflicts of Interest” for a discussion of certain material factors which could cause the actual results or activities or actual events or conditions to differ from those anticipated. Although estimates and assumptions concerning potential investments are believed by the Manager to be reasonable, such 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.

ADDITIONAL INFORMATION

The Fund has filed with the Securities and Exchange Commission, Washington, D.C., a registration statement under the Securities Act of 1933, as amended, with respect to the Units offered pursuant to this Prospectus. For further information, reference is made to the registration statement and the exhibits thereto which are available for inspection at no fee in the principal office of the Commission and its Public Reference Room at 100 F Street, N.E. Washington, D.C. 20549. The Fund is subject to the informational requirements of the Securities Exchange Act of 1934 and in accordance therewith files annual, quarterly and current reports and other information with the Securities and Exchange Commission. Such reports, the registration statement and other information are available for inspection and copying at the above address, and are also available to be viewed and retrieved without charge on the Commission’s electronic data gathering and retrieval (EDGAR) system, at its internet web site at http:// www.sec.gov. In addition, photostatic copies of the material containing this information may be obtained from the Commission upon paying of the fees prescribed by the rules and regulations of the Commission. This Prospectus contains a fair summary of the material provisions of the exhibits filed with the Commission. This Prospectus does not knowingly contain any untrue statement of a material fact or omit to state any material fact required to be stated herein or necessary to make the statements herein not misleading.

GLOSSARY

The following terms used in this Prospectus shall (unless otherwise expressly provided herein or unless the context otherwise requires) have the following respective meanings:

“Acquisition Expenses” shall mean expenses including, but not limited to, legal fees and expenses, travel and communication expenses, costs of appraisals, accounting fees and expenses, and miscellaneous expenses relating to selection and acquisition of Portfolio Assets, whether or not acquired.

“Acquisition Fees” shall mean the total of all fees and commissions paid by any party in connection with the initial purchase or manufacture of Portfolio Assets and the acquisition of other investments. Included in the computation of such fees or commissions shall be any commission, selection fee, financing fee, nonrecurring management fee, or any fee of a similar nature, however designated.

“Adjusted Capital Contribution” shall mean, as of any date, the original Capital Contribution attributable to the Units held by any person on or before such date, as decreased (but not below zero) by the amount which (i) all Distributions from Cash Available for Distribution with respect to such Units on or before the date of determination pursuant to any provision of this Agreement exceed (ii) the Priority Distribution attributable to such Units for such period.

“Affiliate” of a Person shall mean

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any Person directly or indirectly controlling, controlled by or under common control with such Person;
any Person owning or controlling 10% or more of the outstanding voting securities or beneficial interests of such Person;
any officer, director, trustee or partner of such Person; and
if such Person is an officer, director, trustee, partner or holder of 10% or more of the voting securities or beneficial interests of such Person, any other company for which such Person acts in such capacity. However, such term shall not include a Person who is a partner in a partnership or joint venture with the Fund if such Person is not otherwise an Affiliate.

“Asset Management Fee” shall mean the fee payable to the Manager and its Affiliates under the provisions of Section 8.2 of the Operating Agreement.

“Assignee” shall mean a Person who has acquired a beneficial interest in one or more Units from a third party but who is neither a substituted Holder nor an Assignee of Record.

“Assignee of Record” shall mean an Assignee who has acquired a beneficial interest in one or more Units whose ownership has been recorded on the books of the Fund and which ownership is the subject of a written instrument of assignment, the effective date of which assignment has passed.

“ATEL” shall mean ATEL Capital Group and its Affiliates, including the Manager.

“California Act” shall mean the Beverly-Killea Limited Liability Company Act, Title 2.5, Chapters 1-15, of the California Corporations Code, as it may be amended from time to time.

“Capital Account” shall mean, with respect to any Member, such Member’s Capital Account determined in accordance with Section 6.7 of the Operating Agreement.

“Capital Contributions” shall mean the original gross purchase price of the Units contributed by each Member to the capital of the Fund for his interest in the Fund, which amount shall be attributed to Units in the hands ov a subsequent Holder.

“Carried Interest” shall mean the allocable share of Fund Distributions payable to the Manager pursuant to Section 10.4 of the Agreement, for which cash consideration has neither been paid nor is to be paid.

“Cash Available for Distribution” shall mean Cash Flow plus cash funds available for distribution from Fund reserves less amounts set aside for restoration or creation of reserves.

“Cash Flow” shall mean Fund cash provided from operations, without deduction for depreciation, but after deducting cash used to pay all other expenses, debt payments, capital improvements and replacements (other than cash withdrawn from reserves).

“Cash from Reserve Account” shall mean that portion of the Net Proceeds not utilized in the acquisition of Portfolio Assets, including cash maintained according to the provisions of Section 9.4 of the Operating Agreement.

“Closing Date” shall mean such date designated by the Manager for the termination of the offering of Units, but not later than ________, 2014 (a date two years from the date of this Prospectus). Extension of the offering beyond one year from the date of the Prospectus shall be subject to the qualification of the offering for any such extension in those jurisdictions which may limit the offering period to one year. “Initial Closing Date” shall mean the date on which subscribers for Units, other than the initial Holder, are first admitted to the Fund as Holders. “Final Closing Date” shall mean the last date on which subscribers for Units are admitted to the Fund as Holders.

“Code” shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent federal revenue laws.

“Distributions” shall mean any cash distributed to Holders and the Manager arising from their respective interests in the Fund.

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Equity Interests” shall mean warrants, options or other rights to purchase equity securities issued by financing customers of the Fund, equity securities purchased upon exercise of such rights, or equity securities purchased outright by the Fund from the issuers.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“Front-End Fees” shall mean fees and expenses paid by any party for any services rendered during the Fund’s organization and acquisition phase including Organization and Offering Expenses, leasing fees, Acquisition Fees, Acquisition Expenses, and any 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.

“Fund” shall mean ATEL Growth Capital Fund 8, LLC, LLC, the California limited liability company created under the Operating Agreement.

“Fund Minimum Gain” shall have the meaning set forth in Regulations Section 1.704-2(d)(1).

“Gross Financing Revenues” shall mean all amounts derived by the Fund from the Portfolio Assets, including, without limitation, all loan and debt service payments received, lease payments and other financing revenues, but excluding security deposits paid by lessees and Net Disposition Proceeds.

“Gross Proceeds” shall mean the aggregate total of the Capital Contributions of the initial and all of the additional Holders.

“Holders” shall mean owners of Units who are either Members or Assignees of Record, and reference to a “Holder” shall be to any one of them. The Manager shall not be considered to be a Holder except to the extent it also owns Units.

“IRA” shall mean an individual retirement account qualifying under Section 408 of the Code.

“Investment in Equipment” shall mean the amount of Gross Proceeds actually paid or allocated to acquire Portfolio Assets by the Fund, including the principal amount advanced to a borrower by the Fund in any secured loan transaction, any amount of Gross Proceeds reserved pursuant to Section 9.4 of the Operating Agreement up to a maximum of 3% of Gross Proceeds and other cash payments such as interest and taxes, but excluding Front-End Fees.

“Management Fee Limit” means the limit on fees calculated pursuant to Section 8.3 of the Operating Agreement.

“Manager” shall mean AGC 8 Managing Member, LLC (“ATEL”), a Nevada limited liability company, or any other Person or Persons which succeed it in such capacity. The Manager is referred to throughout the Prospectus as “ATEL” or the “Manager.”

“Members” shall mean the initial member of the Fund and any other Persons who are admitted to the Fund as additional or substituted members. Reference to a “Member” shall refer to any one of them.

“Net Disposition Proceeds” shall mean the net proceeds realized by the Fund from sale, refinancing or other disposition of the Fund’s Portfolio Assets, including insurance proceeds or indemnity payments arising from the loss or destruction of Portfolio Assets, after payment of all liabilities to which the Portfolio Assets are subject and all expenses related to the transaction.

“Net Income” or “Net Loss” shall mean the taxable income or taxable loss of the Fund as determined for federal income tax purposes, computed by taking into account each item of Fund income, gain, loss, deduction or credit not already included in the computation of taxable income and taxable loss, but does not mean Distributions.

“Net Proceeds” shall mean the total Gross Proceeds less Organization and Offering Expenses.

“Net Worth” shall mean the excess of total assets over total liabilities as determined by generally accepted accounting principles, except that if any of such assets have been depreciated, then the amount of

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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.

“Operating Agreement” or “Agreement” shall mean the Limited Liability Company Operating Agreement of ATEL Growth Capital Fund 8, LLC, as it may be amended from time to time.

“Organization and Offering Expenses” shall mean those expenses incurred in connection with preparing the Fund for registration and subsequently offering and distributing Units to the public, including selling commissions and all advertising expenses except advertising expenses related to the Portfolio Assets.

Person” shall mean any natural person, partnership, corporation, association or other legal entity.

“Portfolio Assets” shall mean all tangible and intangible rights and interests, acquired, held and owned by the Fund for investment purposes, including without limitation its rights, whether direct or indirect, in all personal and real property, trusts, joint ventures, leases, loans, collateral, chattel paper, options, warrants, securities and other Equity Interests and contract rights.

“Priority Return” means an amount equal to, for any calendar year or other period with respect to the Units held by any Person, the average Adjusted Capital Contribution with respect to such Units during such period multiplied by 8% per annum (calculated on a cumulative basis, compounded daily, from the last day of the calendar quarter in which the Capital Contribution of the initial purchaser of such Units was received by the Fund and pro-rated for any fraction of a calendar year for which such calculation is made).

“Promotional Interest” shall mean the share of Distributions of Cash Available for Distribution and Net Disposition Proceeds payable to the Manager and its Affiliates under the provisions of Section 10.4 of the Operating Agreement.

“Prospectus” shall mean the final prospectus filed in connection with the registration of the Units with the Securities and Exchange Commission on Form S-1, as amended, together with any supplement thereto which may be subsequently filed with such Commission.

“Purchase Price of Portfolio Assets” shall mean the price paid upon the purchase or sale of a particular item of Portfolio Assets, including the amount of Acquisition Fees and all liens and mortgages on the Portfolio Assets, but excluding points and prepaid interest.

“Qualified Plan” shall mean employee trusts (or employer individual retirement accounts), Keogh Plans and corporate retirement plans qualifying under Section 401(a) of the Code.

“Regulations” or “Treasury Regulations” shall mean the income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Reinvestment Period” shall mean the period commencing with the Initial Closing Date and ending six calendar years after the Final Closing Date occurs.

“Roll-Up” shall mean a transaction involving the acquisition, merger, conversion or consolidation, either directly or indirectly, of the Fund and the issuance of securities of a Roll-Up Entity. Such term does not include:

(a) any transaction if the securities of the Fund have been for at least twelve months traded through the National Association of Securities Dealers, Inc. Automated Quotation National Market System; or

(b) a transaction involving the conversion to corporate, trust or association form of only the Fund, if, as a consequence of the transaction, there will be no significant adverse change in any of the following

(i) the Members’ voting rights;

(ii) the term of existence of the Fund;

(iii) the terms of compensation of the Manager and its Affiliates; or

(iv) the Fund’s investment objectives.

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“Roll-Up Entity” means the partnership, trust, corporation or other entity that would be created or would survive after the successful completion of a proposed Roll-Up transaction.

“Service” shall mean the United States Internal Revenue Service or its successor.

“Sponsor” shall mean any Person directly or indirectly instrumental in organizing, wholly or in part, a Program or any Person who will manage or participate in the management of a Program, and any Affiliate of any such Person. Sponsor does not include the Program itself or a Person whose only relation with the Program is that of an independent Portfolio Assets manager and whose only compensation is as such. Sponsor does not include wholly independent third parties such as attorneys, accountants and underwriters whose only compensation is for professional services rendered in connection with the offering of Program interests.

“Substantially All of the Assets” shall mean, unless the context otherwise dictates, portfolio investments representing 66  2/3% or more of the net book value of all portfolio investments as of the end of the most recently completed fiscal quarter.

“Unit” shall mean the interest in the Fund representing a Capital Contribution in the amount of $10 and shall entitle the Holder thereof to the rights herein provided.

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FINANCIAL STATEMENTS

Set forth below are the following financial statements:

 
ATEL GROWTH CAPITAL FUND 8, LLC
        
Report of Moss Adams, LLP, Independent Registered Public Accounting Firm     F-2  
Balance Sheet as at December 13, 2011     F-3  
Statement of Changes in Member's Capital for the Period from December 8, 2011 (Date of Inception) through December 13, 2011     F-4  
Statement of Cash Flows for the period from December 8, 2011 (Date of Inception) through December 13, 2011     F-5  
Notes to Financial Statements .     F-6  
AGC 8 MANAGING MEMBER, LLC
        
Report of Moss Adams, LLP, Independent Certified Public Accountants .     F-8  
Balance Sheet as at December 13, 2011     F-9  
Notes to Balance Sheet     F-10  

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Member of
ATEL GROWTH CAPITAL FUND 8, LLC

We have audited the accompanying balance sheet of ATEL Growth Capital Fund 8, LLC (a development stage enterprise) (the “Fund”) as of December 13, 2011 and the related statements of changes in member's capital and cash flows for the period from December 8, 2011 (date of inception) through December 13, 2011. These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 financial statements are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of ATEL Growth Capital Fund 8, LLC (a development stage enterprise) (the “Fund”) at December 13, 2011 and its cash flow for the period from December 8, 2011 (date of inception) through December 13, 2011, in conformity with U.S. generally accepted accounting principles.

/s/ Moss Adams LLP

San Francisco, California
December 19, 2011

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ATEL GROWTH CAPITAL FUND 8, LLC
(a development stage enterprise)

BALANCE SHEET
AS AT DECEMBER 13, 2011

 
ASSETS
        
Cash   $   500  
MEMBER'S CAPITAL
        
Member's capital   $ 500  

See accompanying notes to financial statements

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ATEL GROWTH CAPITAL FUND 8, LLC
(a development stage enterprise)

STATEMENT OF CHANGES IN MEMBER'S CAPITAL
FOR THE PERIOD FROM DECEMBER 8, 2011 (Date of Inception)
THROUGH DECEMBER 13, 2011

       
  Other Members   Managing
Member
  Total
     Units   Amount
Member's capital as of December 8, 2011
(Date of inception)
        $     $     $  
Capital contribution         —          —         500         500  
Balance, December 13, 2011         $     $ 500     $ 500  

See accompanying notes to financial statements

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ATEL GROWTH CAPITAL FUND 8, LLC
(a development stage enterprise)

STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM DECEMBER 8, 2011 (Date of Inception)
THROUGH DECEMBER 13, 2011

 
Financing activities
        
Capital contributions received   $ 500  
Net cash provided by financial activities   $   500  
Cash at beginning of period      
Cash at end of period   $ 500  

See accompanying notes to financial statements

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ATEL GROWTH CAPITAL FUND 8, LLC
(a development stage enterprise)
  
NOTES TO FINANCIAL STATEMENTS
December 13, 2011

Note l — Organization and Limited Liability Company Matters

Organization — ATEL Growth Capital Fund 8, LLC (a development stage enterprise) (the “Fund”) was formed under the laws of the state of California on December 8, 2011 for the purpose of providing acquisition financing of capital equipment for emerging growth companies and established privately held companies without publicly traded securities. The Fund may continue until it is terminated in accordance with the operating agreement. Contributions in the amount of $500 were received as of December 13, 2011, which represented the initial member's capital investment. As a limited liability company, the liability of any individual member for the obligations of the Fund is limited to the extent of capital contributions to the Fund by the individual member.

As of December 13, 2011, the Fund had not commenced operations other than those relating to organizational matters. The Fund, or Managing Member on behalf of the Fund, has and will continue to incur costs in connection with the organization, registration and issuance of the limited liability company units (Units). The amount of such costs to be borne by the Fund is limited by certain provisions of the ATEL Growth Capital Fund 8, LLC limited liability company operating agreement dated December 13, 2011 (the “Operating Agreement”).

Note 2 — Summary of Significant Accounting Policies

Cash — Cash is maintained in a non-interest bearing checking account.

Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America 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 balance sheet. Actual results could differ from the estimates.

Income Taxes — The Fund does not provide for income taxes as all income and losses are the liability of the individual members and are allocated to the members for inclusion in their individual tax returns.

Subsequent Events — Subsequent events are events or transactions that occur after the balance sheet date but before the date the financial statements are available to be issued. Subsequent events that provide additional evidence about conditions that existed at the balance sheet date are considered in the preparation of the financial statements presented herein. Subsequent events that occur after the balance sheet date that do not provide evidence about the conditions that existed as of the balance sheet date are considered for disclosure based upon their significance in relation to the Company’s financial statements taken as a whole. The Company has evaluated all events subsequent to December 13, 2011, the date of the audited balance sheet, through December 19, 2011, which is the date the audited balance sheet was available for issuance.

Note 3 — Member's Capital

As of December 13, 2011, 50 Units ($500) were issued and outstanding. The Fund is authorized to issue up to 7,500,000 additional Units.

An amount equal to 5% of all Distributions of Cash Available for Distribution and Net Disposition Proceeds will be allocated to the Manager as the carried interest. An amount equal to (i) an additional 5% of all Distributions from Cash Available for Distribution and 1% of all Distributions of Net Disposition Proceeds will be paid to the Manager as a promotional interest until investors have received total distributions in amounts equal to their Capital Contributions plus an amount equal to a priority return; and (ii) then 15% of all subsequent distributions will be allocated to the Manager as a promotional interest. Distributions not allocated to the Manager as carried or promotional interests will be allocated and paid to the unitholders.

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ATEL GROWTH CAPITAL FUND 8, LLC
(a development stage enterprise)
  
NOTES TO FINANCIAL STATEMENTS
December 13, 2011

Note 4 — Commitments and Management

The terms of the Operating Agreement provide that the Managing Member and/or affiliates are entitled to receive certain fees, in addition to the allocations described above, which are more fully described in Section 8 of the Operating Agreement. Additional fees to management include fees for asset management and administration.

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Member of
AGC 8 Managing Member, LLC

We have audited the accompanying balance sheet of AGC 8 Managing Member, LLC (the “Company”) as of December 13, 2011. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the balance sheet is free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion the balance sheet referred to above present fairly, in all material respects, the financial position of AGC 8 Managing Member, LLC as of December 13, 2011, in conformity with accounting principles generally accepted in the United States of America.

/s/ Moss Adams LLP

San Francisco, California
December 19, 2011

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AGC 8 MANAGING MEMBER, LLC
  
BALANCE SHEET
AS AT DECEMBER 13, 2011

 
  December 13,
2011
ASSETS
 
Cash   $ 999,500  
Investment in ATEL Growth Capital Fund 8, LLC     500  
Total assets   $ 1,000,000  
MEMBER'S EQUITY
 
Commitments and Contingencies      
Member's equity   $ 1,000,000  

See accompanying notes to balance sheet

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AGC 8 MANAGING MEMBER, LLC
  
NOTES TO BALANCE SHEET
DECEMBER 13, 2011

Note l — Organization and Summary of Significant Accounting Policies

Organization — AGC 8 Managing Member, LLC (the “Company”)was formed under the laws of Nevada on December 13, 2011 to manage entities in the business of providing acquisition financing of capital equipment for emerging growth companies and established privately held companies without publicly traded securities.

The Company is a wholly-owned subsidiary of ATEL Management Services, LLC (the “managing member”).

The Company organizes and sponsors limited liability companies (the “Funds”) for the purpose of organizing and sponsoring limited liability companies engaged in equipment and venture financing. It also acts as a managing member of the Funds. Through these Funds, the Company derives various fees and also receives reimbursements for expenses incurred on behalf of these entities, of which certain fees and expenses reimbursements are allocated to the Company and the balance is allocated to various other affiliated companies. The basis for determination of the types and amounts of these fees and reimbursements are provided in agreements with the various Funds.

A portion of the fees mentioned above are subordinated to the other members' full recovery of their initial invested capital contributions plus a specific return on their investments. No earnings or equity interests from such subordinated interests have been recognized to date.

The Company will continue in full force and effect until such time as the member elects to dissolve the Company or the Company is otherwise dissolved. As a limited liability company, the liability of the individual member for the obligations of the Company is limited to the extent of capital contributions to the Company by the individual members.

Basis of Presentation — The accompanying balance sheet has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Cash — Cash is maintained in a non-interest bearing checking account.

Investment in Funds — The Company's investments in the Funds are reflected net of cumulative distributions.

Use of Estimates — The preparation of the balance sheet in conformity with accounting principles generally accepted in the United States of America 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 balance sheet. Actual results could differ from those estimates.

Income Taxes — The Company does not provide for income taxes as all income and losses are the liability of the member and are allocated to the member for inclusion in their individual tax returns.

The Company has no uncertain tax positions based on the criteria established under FASB Accounting Standards Codification 740-10, whereby the effect of the uncertainty would be recorded if the outcome was considered probable and was reasonably estimable.

Subsequent Events — Subsequent events are events or transactions that occur after the balance sheet date but before the date the financial statements are available to be issued. Subsequent events that provide additional evidence about conditions that existed at the balance sheet date are considered in the preparation of the financial statements presented herein. Subsequent events that occur after the balance sheet date that do not provide evidence about the conditions that existed as of the balance sheet date are considered for disclosure based upon their significance in relation to the Company’s financial statements taken as a whole. The Company has evaluated all events subsequent to December 13, 2011, the date of the audited balance sheet, through December 19, 2011, which is the date the audited balance sheet was available for issuance.

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AGC 8 MANAGING MEMBER, LLC
  
NOTES TO BALANCE SHEET
DECEMBER 13, 2011

Note 2 — Member's Capital, Distribution and Compensation

The respective Fund under management, ATEL Growth Capital Fund 8, LLC (the “AGC 8”), is authorized under their Operating Agreements to issue up to 7,500,000 units to other members of the Funds.

All distributions will be made by the Company to its managing member.

Note 3 — Fair value measurements

Fair value measurements and disclosures are based on a fair value hierarchy as determined by significant inputs used to measure fair value. The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, generally on a national exchange.

Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market.

Level 3 — Valuation is modeled using significant inputs that are unobservable in the market. These unobservable inputs reflect the Company's own estimates of assumptions that market participants would use in pricing the asset or liability.

At December 13, 2011, the Company had no assets or liabilities that require measurement at fair value on a recurring or non-recurring basis.

The following disclosure of the estimated fair value of financial instruments is made in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification. Fair value estimates, methods and assumptions, set forth below for the Company's balance sheets, are made solely to comply with the requirements of the Financial Instruments Topic and should be read in conjunction with the Company's balance sheets and related notes.

The Company has determined the estimated fair value amounts by using market information and valuation methodologies that it considers appropriate and consistent with the fair value accounting guidance. Considerable judgment is required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize or has realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

At December 13, 2011, the only financial instrument reflected on the Company's balance sheet is its cash. Such cash approximates fair value because of the liquidity and short-term maturity of this instrument.

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EXHIBIT A

PRIOR PERFORMANCE INFORMATION