H/N Management LLC

Item 5: Fees and Compensation

Pursuant to the written agreement, partnerships and other entities under management
generally pay a fixed fee of up to $90,000 per year, payable quarterly and in advance, for
management, administrative services, and clerical expenses. The fixed fee may be
increased or decreased at the sole discretion of the firm to reflect the share of the firm’s
resources devoted to the management of the client's account (subject to the condition that
the fixed fee cannot be increased to exceed 1% of the client's account).

Form ADV Part 2A/2B: Investment Adviser Brochure and Brochure Supplements              Page 3
H/N MANAGEMENT, LLC
v. 03/2011

In addition to the fixed fee, the firm and/or its principals may receive a carried interest as
manager of the partnership or other entity. The carried interest will be tied to each
individual portfolio investment by the entity, and the gain attributable to the carried
interest related to such investment will be distributed to the firm promptly following the
sale or other liquidation of such investment. The firm will be entitled to a carried interest
equal to 5% of the profits realized by the partnership on Ordinary Investments, defined as
investments other than in partnership or other entities and the firm will be entitled to a
carried interest equal to 10% of the profits realized by the partnership on Direct
Investments, defined as investments in partnerships or other entities. For more
information on the provisions of this fee please refer to the advisory agreement and/or
private placement memorandum.

These fees may be negotiable under certain circumstances, at the sole discretion of the
firm. Management fees are directly debited from the client accounts.

All accounts will incur additional expense from brokerage-based activities. Accordingly
clients should be aware that all custodial and execution fees remain separate and distinct
from those fees charged by the firm for its asset management services.

The firm and/or the client may terminate any account agreement, in whole or in part, at
any time with 30 days written notice. Upon termination, any fees paid in advance will be
prorated to the date of termination and any excess shall be refunded to the client. The
advisory agreement with the firm remains non-transferable unless consented-to in writing
by the client.

Item 7: Types of Clients

The firm provides investment advisory services to private equity partnerships, hedge
Funds and real estate partnerships. Principals of the firm also act as Managers of several
private investment entities organized as limited liability companies as follows:

                        NAME                                  MANAGER

                       HWI, LLC                               Carl D. Hess

               Anadon Construction, LLC                       Carl D. Hess

           HEM Private Equity Fund 2000, LLC      Carl D. Hess and David R. Nelson, Jr.

           HEM Private Equity Fund 2005, LLC      Carl D. Hess and David R. Nelson, Jr.

           Nelson Development Company, LLC                David R. Nelson, Jr.

                 Buckhorn Partners, LLC                   David R. Nelson, Jr.

             HEM Private Equity Fund 2008               H/N Management, LLC

             The Restaurant Collective, LLC       Carl D. Hess and David R. Nelson, Jr.

                 H/N Management, LLC              Carl D. Hess and David R. Nelson, Jr.

                HEM Partners Fund, LLC                  H/N Management, LLC

The firm requires clients to maintain a minimum account size of $10,000,000.00 for
Investment Management services. This minimum account size remains negotiable, under
certain circumstances, and at the sole discretion of the firm.