Whitney R. Tilson and Glenn H.

Tongue Managing Partners

phone: 212 386 7160 fax: 240 368 0299 www.T2PartnersLLC.com

May 1, 2010 Dear Partner, Our fund declined 2.1% net in April vs. increases of 1.6% for the S&P 500, 1.5% for the Dow and 2.7% for the Nasdaq. Year to date, our fund is up 8.1% net vs. 7.1% for the S&P 500, 6.4% for the Dow and 8.8% for the Nasdaq. Our portfolio was weak across the board. All of our big three long positions declined: Berkshire Hathaway (-5.3%), General Growth Properties (-2.4%) and Iridium (-0.6%). Our only winners of note on the long side were Borders Group, which refinanced its debt and jumped 47.7%, Resource America (+23.1%) and American Express (+11.8%). It was ugly on the short side, driven by Ambac (up 171.2%), Palm (+54.4%), MBIA (+52.8%) and Netflix (+34.1%). A Few Brief Thoughts We are at the Berkshire Hathaway annual meeting this weekend, recharging our value investing batteries, as we do every year. Its a nice respite from the short-term-oriented investment herd among which we live in New York City (no disrespect to the many exceptional investors who live in NYC!). Weve been spoiled over the past year, beating a rapidly rising market despite having a lot of downside protection via our short book, thanks to exceptional performance by a handful of positions like General Growth, Huntsman and American Express. But as our short book has grown, it has been an increasing headwind, especially in the past two months as the S&P 500 has jumped 7.7%. So why dont we significantly reduce our short book? Weve given it a great deal of thought and have gone through each position, looking for one were willing to cover and cant find a single one. We believe our short book represents a win-win right now: it should provide excellent protection in the event of a general market downturn, but even if this doesnt occur we still think well make money on it (unless the market continues to go straight up in that case, it will continue to dampen our returns). It might interest you to know that the last time we felt this way was in late 2007, after wed taken years of pain on the short side and seriously considered covering most or all of our shorts. But after evaluating each position, we werent willing to cover things like MBIA, Ambac and Lehman Brothers around $70, or Allied Capital and Farmer Mac around $30 and thank goodness we didnt!

145 E. 57th Street, 10th Floor, New York, NY 10022

Overall, we remain cautious as there are many things that concern us most importantly, nearly eight million Americans are not paying their mortgages, persistently high un- (and under-) employment, and continued high levels of fiscal and monetary stimulus, leading to large deficits. In our opinion, we are in uncharted waters yet the stock market is priced as if the seas are calm and the skies are clear. As this chart shows, the market is currently trading at a 25% premium to historical levels, which makes no sense to us based on the fundamentals and is instead most likely explained by a combination of likely-to-be-short-term factors: great year-over-year comparisons (its easy to show growth vs. the near-Armageddon conditions a year ago), unsustainably low interest rates, excess liquidity, and momentum investing:

First and foremost, we are always focused on not losing money, so to protect our downside we are willing to risk not keeping up with a rising market if we have grave concerns about both valuations and fundamentals. Conclusion In their latest Kiplingers column, Why Companies Stumble, John Heins and Whitney discuss why great companies fall and highlight Berkshire Hathaway and Iridium. Thank you for your continued confidence in us and the fund. As always, we welcome your comments or questions, so please dont hesitate to call us at (212) 386-7160. Sincerely yours,

Whitney Tilson and Glenn Tongue

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The unaudited return for the T2 Accredited Fund versus major benchmarks (including reinvested dividends) is: April -2.6% -2.1% 1.6% 1.5% 2.7% Year-to-Date 10.1% 8.1% 7.1% 6.4% 8.8% Since Inception 252.0% 184.4% 17.7% 54.6% 15.2%

T2 Accredited Fund gross T2 Accredited Fund net S&P 500 Dow NASDAQ

Past performance is not indicative of future results. Please refer to the disclosure section at the end of this letter. The T2 Accredited Fund was launched on 1/1/99. Gains and losses among private placements are only reflected in the returns since inception.

T2 Accredited Fund Performance (Net) Since Inception

200 180 160 140 120 100 (%) 80 60 40 20 0
Jan-99 Sep-99 May-00 Jan-01 Sep-01 May-02 Jan-03 Sep-03 May-04 Jan-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10

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T2 Accredited Fund S&P 500

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T2 Accredited Fund, LP (the Fund) commenced operations on January 1, 1999. The Funds investment objective is to achieve long-term after-tax capital appreciation commensurate with moderate risk, primarily by investing with a long-term perspective in a concentrated portfolio of U.S. stocks. In carrying out the Partnerships investment objective, the Investment Manager, T2 Partners Management, LLC, seeks to buy stocks at a steep discount to intrinsic value such that there is low risk of capital loss and significant upside potential. The primary focus of the Investment Manager is on the long-term fortunes of the companies in the Partnerships portfolio or which are otherwise followed by the Investment Manager, relative to the prices of their stocks. There is no assurance that any securities discussed herein will remain in Funds portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed may not represent the Funds entire portfolio and in the aggregate may represent only a small percentage of an accounts portfolio holdings. It should not be assumed that any of the securities transactions, holdings or sectors discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein. All recommendations within the preceding 12 months or applicable period are available upon request. Performance results shown are for the T2 Accredited Fund, LP and are presented gross and net of incentive fees. Gross returns reflect the deduction of management fees, brokerage commissions, administrative expenses, and other operating expenses of the Fund. Gross returns will be reduced by accrued performance allocation or incentive fees, if any. Gross and net performance includes the reinvestment of all dividends, interest, and capital gains. Performance for the most recent month is an estimate. The fee schedule for the Investment Manager includes a 1.5% annual management fee and a 20% incentive fee allocation. For periods prior to June 1, 2004, the Investment Managers fee schedule included a 1% annual management fee and a 20% incentive fee allocation, subject to a 10% hurdle rate. In practice, the incentive fee is earned on an annual, not monthly, basis or upon a withdrawal from the Fund. Because some investors may have different fee arrangements and depending on the timing of a specific investment, net performance for an individual investor may vary from the net performance as stated herein. The return of the S&P 500 and other indices are included in the presentation. The volatility of these indices may be materially different from the volatility in the Fund. In addition, the Funds holdings differ significantly from the securities that comprise the indices. The indices have not been selected to represent appropriate benchmarks to compare an investors performance, but rather are disclosed to allow for comparison of the investors performance to that of certain wellknown and widely recognized indices. You cannot invest directly in these indices. Past results are no guarantee of future results and no representation is made that an investor will or is likely to achieve results similar to those shown. All investments involve risk including the loss of principal. This document is confidential and may not be distributed without the consent of the Investment Manager and does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product. Any such offer or solicitation may only be made by means of delivery of an approved confidential offering memorandum.
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