Kahn Brothers Asset Management Corp

ITEM 5:        FEES AND COMPENSATION

We provide investment advisory and management services to the Partnership with full discretion.

As the Partnership’s investment adviser, we are compensated by a management fee that is based
upon a percentage of total portfolio assets in the Partnership’s portfolio at the time of assessment.
In our capacity as general partner, we may also receive a performance-based allocation or
incentive allocation that is calculated based on the investment performance of the Partnership’s
account over the period assessed. The Partnership pays these fees after the close of each
quarter. The timing of a Limited Partner withdrawal or redemption request does not affect how
these fees impact that Limited Partner’s capital account.

       Management Fee
Our management fee is assessed at the close of each fiscal quarter of the Partnership at a rate
of 1/16th of 1% of the Partnership’s total portfolio assets at the close of each fiscal quarter of the
Partnership before such fee is accrued. The management fee is deducted directly from the
Partnership’s account at its custodian, Pershing LLC. It is subject to negotiation and may change
in the future.

       Incentive Allocation
Our incentive allocation, if any, is determined at the end of each fiscal year of the Partnership. If
during the fiscal year, the net profits allocated to the capital account of a Limited Partner exceed
the net losses, there is a reallocation, as of the end of the fiscal year, to our capital account, of an
amount equal to 20% of the current year’s excess as adjusted for withdrawals and contributions
made during the fiscal year. The allocation is subject to a 6% performance hurdle rate on the
Limited Partner’s opening capital as adjusted for additional capital contributions and withdrawals.

       Partnership Expenses
Prior to joining the Partnership, all prospective Limited Partners receive the Governing Documents
and are made aware of the fee structure and the terms of the Partnership by us.

The Partnership will incur certain fees or expenses, including but not limited to, custodian fees or
mutual fund expenses charged by outside institutions in connection with the services offered by
us, in addition to other costs and expenses incurred in connection with the formation, operation,
and management of the Partnership.

The Partnership will incur separate brokerage commissions from its broker-dealer when securities
transactions occur. Currently, the Partnership uses an affiliated broker-dealer, Kahn Brothers
LLC, to transact securities trades. That broker-dealer charges a commission rate that has been
negotiated between the Partnership and us. All investors in the Partnership are made aware of
this arrangement and that commissions from the broker-dealer are higher than those charged by
many third-party unaffiliated broker dealers. Neither we nor the broker-dealer charges “mark-ups.”
For more information on the brokerage arrangement between the Partnership and Kahn Brothers
LLC, please refer to Item 12: Brokerage Practices.

We and our affiliated businesses do not provide our employees with special compensation for
promoting as a sales practice particular securities or investment products.

When acting as investment adviser or in other fiduciary capacities, we may hold or invest the
Partnership’s assets in mutual funds, money market funds, annuities or other pooled investments
(“Funds”). Such funds are generally bought and sold at net asset value, resulting in no direct sales
charge to the client account. The fund management companies and their affiliates charge various
commissions or management fees for their services, as described in their prospectuses. These
commissions and fees are separate from, and in addition to, the fees that you pay to us.

A portion of the commissions or fees charged by Fund management companies or their affiliates
for investments in certain share classes may be paid to our affiliated broker-dealer, Kahn Brothers
LLC, or to third-party service providers for administrative services. Such payments are governed

by Rule 12b-1 of the Investment Company Act of 1940, as amended. The fees (known as “12b-1
fees”) are generally less than 1.0% of the average annual share value of Fund shares. When 12b-
1 fees arise from fund assets, or assets held in the subaccounts of annuities, life insurance
policies or other similar products, they are retained or credited to Kahn Brothers LLC or our third-
party service providers, for our or their own account(s).

We invest the Partnership’s assets in Funds carried on Pershing’s platform. Currently, each Fund
carried on the platform in which we invest the Partnership’s assets has only a single share class
available on the platform. But in the event that we invest in Funds for which there are multiple
available share classes, we have a financial incentive to select those share classes that result in
higher compensation to our affiliated broker dealer through the payment of 12b-1 fees. This
creates a conflict of interest between us, the investment manager whose affiliate may receive fees
connected to a particular share class, and the Partnership and its investors, for whom the
recommendation or selection is being made. To mitigate such conflict of interest, we will take
measures to ensure the appropriateness of the Fund share class selection based upon the
Partnership’s investment objectives and any other appropriate considerations relevant to such
share class selection. In taking such measures, we will seek to place the Partnership in the Fund
share class with lower fees, absent extenuating factors that make a higher fee share class more
appropriate for the Partnership.

A Limited Partner is entitled to request a withdrawal of funds from its capital account as of the last
business day of each fiscal year upon 60 days’ prior written notice to us or by such other date and
...

ITEM 7:        TYPES OF CLIENTS

We provide investment advisory services to the Partnership, subject to our direction and control
as the General Partner and the investment adviser, and not individually to Limited Partners.
Limited Partners may include individuals and high net worth individuals and their families with
personal, retirement, trust, charitable, and other assets, and business and institutional clients, which
may include pension funds and profit sharing plans, foundations, endowments, investment
partnerships, and other types of institutional and corporate investors, among other types of investors
that meet the requirements to be accredited investors under U.S. securities laws.

All new Limited Partners are admitted into the Partnership at our sole discretion. Although we
have no formal restrictions on the size of new investments in the partnership, we prefer incoming
investors to have a minimum of mid-seven-figures in investable assets. We may waive this policy
at our sole discretion. Our policies and process to evaluate prospective investors are mindful of
the need to continue to provide our current investors with personalized service and valuable one-
on-one meetings with our investment management team.