24 Appualoosa 51 John F. Kennedy Parkway, 2 Floor Short Hills, New Jersey 07078 (973) 701-7000 Fax: (973) 701-7055 To: Investors in funds managed by Appaloosa Management L.P. Subject Regulation M, Rule 105 Matter Date: March 25, 2010 ‘As you may have seen in today's Wall Street Journal, we have been contacted by the SEC with respect to ‘an alleged violation of Rule 106 of Regulation M. While the matter is stil under discussion with the SEC, wwe note that the monetary amounts involved are in no way material to Appaloosa, nor are there any allegations of intentional misconduct or unethical behavior by Appaloosa, The inquiry relates to a November 2008 secondary offering of Wells Fargo stock, and whether ‘Appaloosa's participation in that secondary offering was a violation of Rule 105 of Regulation M of the ‘Securities Exchange Act of 1934, Rule 105 prohibits the purchase of a security in a registered offering if the buyer has executed short sales in the same security over a prescribed restricted period prior to the offering. Rule 105 is intended to be a “bright line" rule which does not require any intent to defraud or knowing or reckless conduct, nor is there any issue as to any fraudulent intent or such conduct involved here. ‘Two funds advised by Appaloosa - Appaloosa Investment LP. | and Palomino Fund Ltd. - sold short 4,034,896 Wells Fargo shares between October 31 and November 5, 2008. After the short sales were made, the two funds purchased 125,000 Wells Fargo shares in the secondary offering announced by Wells Fargo after the close of the market on Novernber 5, 2008. The two Thoroughbred funds, ‘Thoroughbred Fund L.P. and Thoroughbred Master Ltd. (Thoroughbred Offshore Fund Ltd.), did not short Wells Fargo shares or participate in the secondary offering. ‘There is no assertion that Appaloosa knowingly acted to manipulate the market for Wells Fargo stock through its trading. In fact, Appaloosa first learned of the secondary offering after it was publicly announced (and after Appaloosa had executed the relevant short sales). Similarly, Appaloosa did not "cover" its Wells Fargo short position with shares purchased in the secondary offering; those shares were simply sold a week later. Appaloosa will continue to cooperate with the SEC and take remedial steps, as necessary, to ensure future compliance with Rule 105. We, of course, will advise investors of further developments. In the meantime, if you have any questions regarding this matter, please do not hesitate to contact us. PRIVILEGED AND HIGHLY CONFIDENTIAL