Concorde Financial Corporation

Item 5: Fees & Compensation

     Concorde is compensated on a fee-only basis based on the Client and the specific activities
     undertaken, including investment management fees and hourly or retainer financial advisory
     fees.

     Our fees are negotiable and may vary from Client to Client and may be higher or lower than
     those indicated in the basic fee schedule below. Currently, we have Clients that are not on
     our standard fee schedule. Fee adjustments involve a number of factors, including the amount
     of total assets under management, the nature of the assets, the type of analysis required to
     manage the account, the length of the Client’s relationship with us, the level of service
     required by the Client and other factors.

     We also provide financial and business advice to CCC and OCC, on a consulting basis, for
     the benefit of private pooled investment vehicles managed by CCC or OCC in which some
     of our Clients invest. We receive fees from CCC and OCC for these consulting services in
     accordance with the terms of an agreement between the parties. See Section 10 for more
     details.

     For all Client accounts, we may invest cash balances in money market funds and may invest
     Client funds in mutual funds other than the Fund. In addition to the fees charged by us, each
     of the mutual funds in which Clients’ funds may be invested also pays its own investment
     advisory fees and expenses. To the extent that Clients invest in mutual funds other than the
     Fund, such Clients effectively will pay two levels of advisory fees, one for the management
     of their assets invested with the Adviser, and indirectly through the management fees assessed
     to the mutual fund by its investment adviser.

     The investment management fees are based on the rates in the fee schedule below calculated
     as a percentage of the daily average value 1 (as reasonably determined by us if a market quote
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     is not available) of the assets under management over the preceding quarter as determined as
     the close of business on the last day of each calendar quarter and are billed and payable in
     advance as of the commencement of each calendar quarter. Fees may be deducted from Client
     accounts or billed to the Client, depending upon their preference.

              •   1.00% per annum (1/4 per quarter) on the first $1,000,000 of assets
              •   .75% per annum (1/4 per quarter) on the next $1,000,000 of assets
              •   .50% per annum (1/4 per quarter) on assets in excess of $2,000,000

    Clients can request more information on the calculation methodology for this daily average figure.

Our investment management fees do not include other fees and expenses Clients may incur
such as brokerage commissions (discussed in Item 12), custodial costs and the expenses and
management fees that are internal to mutual funds. The Adviser does not receive any of these
other fees. Additionally, Clients do not pay asset management fees on shares of the Fund held
in their accounts. The Adviser does not charge Client accounts when account holders make
deposits or withdrawals.

Financial advisory fees are based on time spent at hourly rates indicated below and are billed
monthly after services are performed.

       •   Clerical and Administrative $150 per hour
       •   Analysis and Professional $200 to $300 per hour

Clients may terminate their agreements with the Adviser by giving us 30 days written notice.
Prepaid investment management fees will be refunded based on a daily prorating from the
beginning of the quarter to the date of termination, upon written request. Concorde reserves
the right to charge a one-time termination administrative fee equal to .5% of the value of the
assets under management at such time Concorde’s services are terminated.

The Adviser, at its own expense and without reimbursement from the Fund, furnishes office
space and all necessary office facilities, equipment and executive personnel for managing the
investments of the Fund. For such services, we receive a monthly fee based on the average
daily net assets of the Fund at the annual rate of .80%.

Generally, the Adviser aims to combine related Client accounts for fee billing purposes.

Neither the Adviser nor any of its supervised persons receives any compensation from the
sale of securities or other investment products.

Item 7: Types of Clients

We offer our services to a wide range of clients, including individuals, trusts, estates,
corporations, limited partnerships, limited liability companies, and investment companies.
We also provide investment consulting services to limited and general partnerships, on a
contract basis, for a related entity. See Item 10 for further information.

Private fund investors must meet the criteria of qualified investors and eligibility is not
determined by a minimum investment.

Item 8: Method of Analysis, Investment Strategies and Risk of Loss

The Adviser utilizes a value and income investment approach for growth and capital
preservation. Value investing focuses on identifying differences between the market's
perception and price of a company's stock and the intrinsic value that a knowledgeable investor
would place on the entire company as an ongoing enterprise. Intrinsic value typically takes
into consideration fundamental business factors such as a company's earning power, franchise
or brand value, proprietary market position and competitive advantages - which drive the long-
term performance of the company - and is assessed by analyzing the worth of such factors.
The market's perception can cause an undervaluation or overvaluation of a company relative
to its true intrinsic value, the appropriate value for the entire enterprise, due to a lack of
understanding or perhaps the inappropriate disfavor of an entire market sector. The
characteristics of our practical application of the value investment philosophy results in
portfolios that are spread over the spectrum of industries and capitalization (size), with a
typical holding period of two-four years (low turnover).

We use a variety of analytical, experience based, subjective methods to make value
investment decisions.

       •   For individual equities, we utilize fundamental analysis to determine the
           attractiveness of the security and potential for growth in value at current market
           prices.
       •   For managed money and mutual funds, we analyze the net historical track record,
           consistency of management personnel and investment restrictions in selecting the
           investment vehicle for a portion of the client’s assets in meeting part of the client’s
           investment policy.
       •   For fixed income securities, we review the credit quality and duration of the
           security for an appropriate fit for a part of the client’s investment policy.

Below is a summary of certain risks applicable to the Adviser’s advisory services and
investments outlined in Item 4. The summary is qualified in its entirety by the risk
factors set forth in each Client’s offering documents or similar account opening
documents. The past performance of the Adviser is not indicative of future results and
risk of loss should be considered.

The Risk of Loss

The Clients’ investments involve the risk of loss. Investors must be prepared to lose all
or substantially all of their investment. The Adviser and its affiliates are in no respects
responsible for the performance of the Clients, except to the extent of their obligation
to act in good faith and without fraud, gross negligence, or reckless or intentional
misconduct in respect of their duties to the Clients.

Market Disruptions

In recent years, the global financial markets have undergone pervasive and
fundamental disruptions which have led to extensive and unprecedented governmental

intervention. Such intervention has in certain cases been implemented on an
“emergency” basis, suddenly and substantially eliminating market participants’ ability
to continue to implement certain strategies or manage the risk of their outstanding
positions.

Market Risks in General

The success of the Clients’ investment program may be substantially and adversely
affected by general economic and market conditions, such as interest rates, availability
of credit, inflation rates, economic uncertainty, changes in laws, cyber theft and
terrorism, and national and international political circumstances. None of these
conditions is within the control of the Adviser and no assurances can be given that the
Adviser will anticipate these developments. These factors may affect the volatility and
liquidity of investments held by the Clients. Unexpected volatility or illiquidity could
impair the Clients’ profitability or result in losses.

Management of Multiple Clients

The Adviser will endeavor to act in a manner that it considers fair, reasonable and
equitable in allocating investment opportunities to Clients. Client accounts may
underperform other accounts that may be managed by the Adviser that use the same
or similar strategies. Each Client’s investment program is tailored to their specific
needs, risk tolerances, account value, investment mix, investment horizon, and other
factors that may materially alter each Client’s performance.

Reliance on Corporate Management and Financial Reporting

Many of the strategies implemented by the Adviser rely on the financial information
made available by the issuers in which the Clients invest. The Adviser has no ability
to independently verify the financial information disseminated by the issuers in which
the Clients invest and is dependent upon the integrity of both the management of these
issuers and the financial reporting process in general.

No Independent Verification of Market Information

The Adviser selects investments for the Clients on the basis of information and data
filed by issuers with various government regulators or made directly available to the
Adviser by such issuers or through other sources. Although the Adviser evaluates all
such information and data and seeks independent corroboration when the Adviser
considers it appropriate and when it is reasonably available, the Adviser is not in a
position to confirm the completeness, genuineness or accuracy of such information
and data.

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