Gate City Capital Management LLC

ITEM 5 – FEES AND COMPENSATION

The Fund

GCCM or its affiliates generally receive management fees and incentive allocations in connection with the
investment management services provided to the Fund. Compensation payable to GCCM by the Fund and
its investors are set forth at the time of the establishment of the Fund. The Fund’s Offering Documents
include a complete discussion of applicable fees paid by investors in the Fund.

Fund Management Fees

The Fund ordinarily will pay Gate City a management fee, monthly in advance, in an amount equal to 0.125%
of the net asset value of each capital account as of the beginning of each calendar month (approximately 1.5%
annually). The management fee is charged against a capital account regardless of whether such capital
account increases or decreases in value over time. GCCM may agree to a different management fee
arrangement in respect of the capital account of a member, or waive or reduce the management fee in respect
of any capital account of a member, in its discretion. This will not entitle the member that holds such account,
or any other member, to such a different arrangement, waiver or reduction in respect of any other capital
account.

Incentive Allocation

As of the end of each year, the Fund ordinarily will debit from each capital account, and will credit to the
capital account of GCCM, an incentive allocation in an amount equal to fifteen percent (15%) of the Net New
Profit of such capital account balance (adjusting for the amount of any withdrawals or distributions from the
Fund from such account during that time). Net New Profit is any amount by which the net asset value of a
capital account exceeds (x) the High Water Mark for such Account, which is (a) for the initial incentive
allocation calculation date the amount of the initial capital contribution that established such Account and (b)
for each subsequent incentive allocation calculation date is the greater of (i) the aggregate net asset value of
such capital account immediately after the most recent Incentive Allocation Calculation Date (adjusting for
the amount of any withdrawals or distributions from such account since such date) and (ii) the prior high
water mark (adjusting for the amount of any withdrawals or distributions from such account since the date of
the prior high water mark) plus (y) in either case, the Hurdle Amount which is an annualized ten percent
(10%) return on the High Water Mark. The Hurdle Amount will be equitably adjusted to take into account the
effect of investments made after the start of a calendar year or redemptions made during the calendar year. For
the avoidance of doubt, the Hurdle Amount is not cumulative.

A similar allocation will be made to GCCM in the event of a withdrawal or distribution from a capital account
before the end of a calendar year, in an amount equal to the product of the amount described above times a
fraction the numerator of which is the amount of such withdrawal and the denominator of which is the balance
of such account immediately before such withdrawal. In that case, the High Water Mark for such Account will
be appropriately adjusted downward to reflect such withdrawal.

If a capital withdrawal is made or required to be made from a capital account at a time when the net asset
value of the account is at or below its High Water Mark, the High Water Mark for such account will be
decreased pro rata (in the same proportion as the amount of the withdrawal bears to the balance of such
account immediately before such withdrawal).

The determination of the Incentive Allocation is binding and conclusive on the Members. Although the High
Water Mark for a capital account carries forward from year to year until exceeded, GCCM is not required to
“repay” any Incentive Allocation allocated to it in the event such Account subsequently experiences losses.

Because the Fund will establish a separate capital account for each separate capital contribution a member
makes to the Fund, the determination of whether an account has experienced Net New Profits will be made
with respect to each account. Thus, it is possible that, depending on the various times at which an investor
makes capital contributions and the timing of the Fund’s profits and losses, one or more of such investor’s
capital accounts could experience Net New Profit, while the value of other capital accounts held by such
investor could be below the High Water Mark for such accounts, with the result that the member may bear an
Incentive Allocation even where it has experienced a loss on its overall investment.

Gate City may agree to a different Incentive Allocation arrangement in respect of any capital account of a
member, or waive or reduce the Incentive Allocation in respect of any particular capital account, in its
discretion. This will not entitle the Member that holds such account, or any other member, to such a different
arrangement, waiver or reduction in respect of any other capital account.

Expenses

The Fund’s organizational costs and expenses, together with offering costs and expenses incurred in
connection with the offer and sale of interests did not exceed $50,000. GCCM bore these expenses.

The Fund is also responsible for the following expenses. The Fund’s custodial, administrative, legal,
accounting, auditing, record-keeping, appraisal, tax form preparation, compliance and consulting costs and
expenses (including costs and expenses associated with obtaining systems and other information designed to
facilitate Fund accounting or record-keeping, including related hardware and software) and the fees, costs,
and expenses of third-party service providers (these administrative fees described in subsection (ii) will be
capped at 0.30% of the Fund’s NAV per calendar year and will not be assessed unless the NAV of the Fund
exceeds $5,000,000 during the calendar year); (iii) costs and expenses incurred in connection with the
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ITEM 7 – TYPES OF CLIENTS

As discussed above in Item 4, “Advisory Business,” GCCM offers investment advisory services to the Fund
and certain other managed accounts. Investments in the Fund generally are limited to investors that are
“accredited investors” within the meaning of Regulation D under the Securities Act. To invest in the Fund,
an investor generally must invest a minimum of $100,000, although lesser amounts may be accepted at our
discretion. The Fund’s Offering Documents include a complete discussion of the minimum initial
subscription amounts, investor eligibility requirements, and other terms of investment. Clients and investors
in the Fund may include, among others, high net worth individuals, banks, trusts, endowments, foundations,
corporations, partnerships, sovereign wealth funds, insurance companies, certain employee benefit plans and
limited liability companies. Additionally, employees and other persons associated with GCCM and/or its
affiliates may invest in the Fund.

GCCM generally requires a minimum account size of $1,000,000 for the establishment of a separately
managed account. GCCM may waive this requirement in its discretion. Investments in separately
managed accounts are limited to institutional investors.