Bayou City Energy Management LLC

Item 5 – Fees and Compensation

A.    Describe how you are compensated for your advisory services. Provide your fee
schedule. Disclose whether the fees are negotiable.

Generally, BCEM or an affiliate receives fees and compensation in exchange for advisory services
provided to the Funds, including management fees, carried interest, additional compensation in
connection with management services performed for the portfolio companies of the Funds and
reimbursements from portfolio companies for certain expenses advanced on their behalf. The Funds
are also responsible for bearing certain expenses as detailed below and in each Fund’s Governing
Documents. The following is a general description of fees and compensation of the Funds. At times,
fees and expenses differ from one Fund to another, as well as among investors in the same Fund.
Each investor should refer to the Governing Documents of the applicable Fund for a complete
understanding of how BCEM is compensated for its advisory services; the information contained
herein is a summary only and is qualified in its entirety by such documents.

Management and Other Fees

BCEM charges certain Funds a management fee (the “Management Fee”), generally 2% per annum
of non-affiliated investor’s commitments. The Management Fee charged to each Fund is described
in full detail in the relevant Fund’s Governing Documents and more briefly below. Management Fees

are initially calculated based upon each investor’s committed capital for the period of time during
which each Fund is making investments or until BCEM or its affiliates begins to accrue Management
Fees from a successor fund (whichever is earlier); thereafter, the Management Fee is calculated based
on the cost basis of portfolio investments held by the Funds (excluding temporary investments and
portfolio investments that have been completely and permanently written off). The amount of
Management Fees generally will not correspond with the net asset value of individual investments,
aggregate investments in a portfolio company or of a Fund, including following the stepdown date,
and will not be reduced in connection with any write-downs except in the case of investments that
have been permanently written down. Permanent write-down determinations are made in the
discretion of the valuation committee in accordance with the relevant Governing Documents and the
Firm’s valuation policy. Except where the Governing Documents expressly provide to the contrary,
Management Fees will not be reduced (in whole or in part) in the case of partial distributions, partial
sales, reorganizations, restructurings, roll-over investments or similar transaction, in each case in
circumstances that do not result in the complete disposition of the relevant Fund’s interest therein,
and even in cases where the value of such Fund’s investment or ownership percentage in a portfolio
company has been reduced as a result of such transaction. In addition, Management Fees generally
will not be reimbursed or refunded under the Governing Documents in the event of realizations,
dispositions or partial write-downs that occur partway through the relevant calculation period.
Further, where there has been a partial disposition or permanent write-down of a Fund’s investment
and the fair market value of the investment following such event exceeds the total amount of the
Fund’s investment contributions relating to the investment, the Governing Documents do not require
Management Fees after the stepdown date to be reduced. In most circumstances, the post step-down
Management Fee base will include capitalized transaction-specific fees and expenses of unrealized
investments, including transaction fees charged by BCEM in connection with the investment, as
applicable. The inclusion of such fees and expenses poses a conflict of interest in that it results in a
higher Management Fee than if such transaction fees and expenses were not capitalized into the asset
base.

Assessed quarterly in advance, Management Fees are collected through a capital call, through a draw-
down on the Fund’s line of credit or offset against a distribution to investors. All Management Fees
were negotiated with investors during the fundraising period of the applicable Fund and are not
subject to negotiation thereafter. Generally, investors participating in a subsequent closing after the
initial closing of a Fund are responsible for paying the Management Fee as of the date of the initial
closing of such Fund, plus interest, as applicable. Management Fees are also payable during term
extensions unless otherwise notified to investors.

The General Partners are permitted, in their sole discretion, to reduce or waive all or a portion of the
Management Fee. Management Fees differ from one Fund to another, as well as among investors in
the same Fund. Such differences can arise from the size of an investor’s commitment to a Fund,
provisions of side letter agreements or other negotiated terms. With the exception of one Co-
Investment Fund, investors who participate in a Co-Investment Fund are not charged a Management
Fee (although these investors generally pay their pro rata share of certain Fund expenses). Investors

in the Affiliate Funds do not pay Management Fees (although these investors similarly generally pay
their pro rata share of certain Fund expenses). For more specific information on the Management
Fees for each Fund, please refer to such Fund’s Governing Documents.

Management Fees are permitted to be reduced by, as applicable: (i) the amount of fees paid by a Fund
to entities or persons acting as a placement agent in connection with the offer and sale of interests in
such Fund; (ii) costs incurred by BCEM in connection with the organization of a Fund that exceed a
limit specified in such Fund’s Governing Documents (as further described under “Organizational
Expenses” in Item 5.C, below); (iii) External Fees (as defined below); and (iv) termination and break-
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Item 7 – Types of Clients

Describe the types of clients to whom you generally provide investment advice, such
as individuals, trusts, investment companies, or pension plans. If you have any requirements
for opening or maintaining an account, such as a minimum account size, disclose the
requirements.

BCEM provides investment advice to the Funds. With the exception of the Affiliate Funds, the Funds
generally limit their investors to persons or institutions who are: (i) “accredited investors” as defined
in the Securities Act of 1933, as amended (“Securities Act”) and, as applicable based on the Fund,
either (ii) “qualified purchasers” or “knowledgeable employees,” each as defined in the Investment
Company Act, or (iii) “qualified clients,” as defined under the Advisers Act. The Funds are not
registered or required to be registered under the Investment Company Act; are not made available to
the general public; their securities are not registered or required to be registered under the Securities
Act and Fund interests are privately placed to qualified investors. Qualified investors include
individuals or entities to which Fund interests are permitted to be sold, which generally includes (i) in
the United States, people or organizations who meet certain net worth, income and/or financial
sophistication requirements as described above or (ii) in other countries, as permitted by the relevant
securities laws in such jurisdiction and in compliance with any foreign offering provisions applicable
to BCEM and/or the Funds. Investors in the Funds must also meet certain other suitability and net
worth qualifications prior to making an investment in the Funds. The Funds typically require capital

commitments from each investor of at least $1.5 to $2.5 million, depending on the Fund, although
commitments of less than these amounts have been accepted in the discretion of the applicable Fund’s
General Partner.

Examples of the types of investors participating in the Funds generally include high net worth
individuals, banks or thrift institutions, other investment entities, university endowments, sovereign
wealth funds, fund of funds, family offices, pension and profit-sharing plans, trusts, estates or
charitable organizations or other corporations or business entities and also include, directly or
indirectly, principals or other employees of BCEM and its affiliates and members of their families, or
other service providers retained by the Firm.

On occasion, BCEM offers co-investment opportunities for certain investors to invest alongside a
Fund in certain Fund portfolio companies. As referenced in Item 4, above, co-investments have been
structured either as (i) a Co-Investment Fund or (ii) a direct investment by certain investors into a
portfolio company or its holding or operating company. When structured as a Co-Investment Fund,
BCEM considers the investment to be a Fund client, identifies the Fund in its Form ADV Part 1,
Schedule D, Section 7.B.(1), obtains an audit for the Fund, reserves the right to assess a Management
Fee and/or Carried Interest on such Co-Investment Fund and includes the amount of assets of such
Fund in the Firm’s regulatory assets under management. In the case of direct co-investments, BCEM
does not consider the investment to be a Fund or a client, does not act as the investment manager to
the co-investment portion of the investment, does not charge Management Fees or Carried Interest
to the investment, does not have custody of the investment or include the amount of assets of the co-
investment in the Firm’s regulatory assets under management. In such direct co-investment
opportunities, BCEM will perform management, advisory and other services for the portfolio
companies in which these co-investors invest, generally at no cost to such co-investors except
portfolio company fees and expenses (which such fees and expenses are recorded at the portfolio
company).

Co-investment opportunities arise when BCEM has the opportunity for an investment in an existing
or prospective portfolio company and determines that (i) an investment requires additional capital,
(ii) all or a portion of the applicable opportunity is not required to be offered to a Fund, (iii) the full
investment opportunity is not appropriate for a Fund, whether due to concentration restrictions
contained in the Fund’s Governing Documents or otherwise or (iv) BCEM believes the Fund will
benefit from the participation of the co-investor(s). Such determinations are based on the provisions
of the applicable Governing Documents, side letter agreements, agreements with lenders and other
third parties and such other factors as BCEM will consider in its sole discretion, including those
specified in its policies on investment allocation and co-investments. In exercising its discretion in
allocating co-investment opportunities, BCEM considers certain factors such as: (i) the aggregate
amount of co-investment available; (ii) BCEM’s assessment of which potential co-investors are willing
and able to pursue and complete the particular co-investment if offered, and BCEM’s understanding
of the nature and/or size of opportunities in which the potential co-investor is particularly interested;
(iii) BCEM’s views as to whether the involvement of any particular potential co-investor(s) could

directly or indirectly benefit a Fund generally, a Fund’s pursuit of and investment in the particular
portfolio company opportunity and/or the future business, activities or prospects of the portfolio
company; (iv) any relevant considerations made known to BCEM by the portfolio company
management team; and (v) any further legal, regulatory or tax considerations, timing issues and other
special considerations arising as a result of the industry, sector, business or activities of the portfolio
company that can affect or be affected by allocation decisions.
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