Greenlight Capital Inc

Item 5.        Fees and Compensation

Management Fee and Performance Allocation

        We receive from the Capital Funds quarterly investment management fees (the
“Management Fee”) at an annual rate equal to 1.5% of the value of each investor’s investment,
valued and payable as of the beginning of each quarter (0.375% per quarter). The Management
Fee for capital contributions made, or shares purchased, during a calendar quarter will be
charged pro rata for the initial quarter of purchase. The Management Fee is also adjusted for
withdrawals or redemptions within a calendar quarter.

       In consideration for the Management Fee, we provide certain administrative services to
the Capital Funds, including, but not limited to, office space, furniture and utilities, computer
equipment and services, and secretarial, clerical and other personnel. The Management Fee may
exceed or may be less than the expenses borne by us on behalf of the Capital Funds.

        Our affiliate, DME Management GP, LLC, receives from the Capital Funds an annual
performance-based profit allocation (the “Performance Allocation”) in an amount equal to 20%
of the increase in the value of each investor’s investment, subject to a modified high water mark
described below. The Performance Allocation generally will be allocated at the end of each
fiscal year and immediately prior to withdrawals occurring prior to the end of any fiscal year.

        If at any time a loss occurs that results in the value of an investor’s capital being less than
the highest value of such capital at the close of any fiscal year since such investor’s admission to
the Capital Funds, or the initial amount of capital contributed by such investor to the relevant
Capital Fund (the “High Water Mark”), then the Performance Allocation with respect to such
investor shall be 10% of such investor’s allocable share of net profits, if any, until such time as
the value of such investor’s capital (gross of the Performance Allocation but net of all fees) is
equal to the sum of (a) the High Water Mark, plus (b) an additional amount equal to 150% of the
losses incurred by such investor (the sum of (a) plus (b) being the “Modified High Water
Mark”). After such investor reaches the Modified High Water Mark, the Performance

Allocation with respect to such investor will revert to 20%. Withdrawals by and distributions
made to an investor will result in a proportional reduction of the Modified High Water Mark.

        The Management Fee and the Performance Allocation may be waived, reduced or rebated
for any investor, including, without limitation, for investments we or our affiliates make and/or
for investments made by our employees and their family members.

Expenses

         The Capital Funds pay, whether directly or through reimbursement of us and our
affiliates, all costs and expenses related to its investments and operations, including each Capital
Fund’s pro rata share of such costs and expenses incurred, which costs and expenses include,
without limitation, brokerage and other transaction costs, data fees, clearing and settlement
charges, outsourced trading service expenses, trade break fees, research (including research-
related travel expenses incurred with respect to specific potential or existing investments) and
brokerage products and services (including market data terminals, risk management services and
order management systems) that fall within Section 28(e) of the U.S. Securities Exchange Act of
1934, as amended (the “Exchange Act”), legal fees and other expenses in connection with
conducting due diligence and negotiating the terms of investments (including investment-related
travel expenses incurred with respect to specific potential or existing investments), regardless of
whether such investments are consummated, custodial fees, administrator fees and expenses,
third party valuation services, expenses and costs of expert networks, expenses and costs of
obtaining surveys, analysis or other data sets from third parties related to prospective investments
or sectors in which the Capital Funds may invest, initial and variation margin, interest and
commitment fees on debit balances or borrowings, stock borrowing fees and proxy solicitation
expenses, legal costs and expenses, audit and tax preparation expenses, accounting fees,
insurance expenses including costs of any liability insurance and fidelity bonds obtained on
behalf of the Capital Funds or officers’ and directors’ insurance, directors’ fees and expenses,
indemnification expenses, government and regulatory costs and expenses (including filing and
license fees and preparation and submission of filings and licenses, including without limitation,
Form PF preparation and filing fees) in connection with specific investments or offering interests
in the Capital Funds, any issue or transfer taxes chargeable in connection with any securities
transactions, any entity level taxes and fees, costs of reporting and providing information to
investors (including updates to offering documents), costs of maintaining recognition as a
professional fund, costs of maintaining registered agents and registered offices, costs of litigation
or investigation involving the Capital Funds’ activities and fees of the administrator. A portion
of these operating expenses may be shared with other investment entities or accounts we and our
affiliates manage on an equitable basis as determined in our and our affiliate’s sole discretion.

        Neither our principals, members, managers, directors, officers and employees
(collectively, “supervised persons”) nor we accept any compensation for the sale of securities or
other investment products, including interests in the Capital Funds.

       For a further discussion of these and related items, see Item 12 (Brokerage Practices).

Item 7.          Types of Clients

       We provide investment advisory services to the Capital Funds. We may in the future
provide investment advisory services to additional clients including, but not limited to, other
pooled investment vehicles, corporations, trusts, institutions, high net worth individuals,
investment companies, pension plans, sovereign wealth funds, family offices, foundations and
endowments.

       For a further discussion of these and related items, see Item 4 (Advisory Business) and