Lazard Alternatives LLC

Item 5 – Fees and Compensation

For Funds, advisory fees are generally based upon the fee schedules set forth in the respective offering
memorandum. Typically, Lazard Alternatives receives a fixed annual advisory fee in the range of
between 0.75% and 1.50% of assets under management and a performance fee based on capital
appreciation equal to between 10% and 15%. For separate accounts, fees are negotiable, but would
typically be within the same range. The 1099 Fund is also subject to a .05% distribution fee and .25%
servicing fee in addition to a 1.50% advisory fee.

Depending on the specific Fund, Funds managed by Lazard Alternatives generally require a minimum
investment of between $500,000 and $1 million, subject to the right of the Fund to waive such minimum.

Lazard Alternatives generally requires a minimum investment of $25 million to establish a separately
managed advisory account.

In the event of a termination of the advisory agreement or redemption of proceeds from a Fund, the asset-
based fee for the calendar quarter in which the termination or redemption occurs will be pro-rated and
refunded. Similarly, the performance-based fee is only charged on the capital appreciation through the
date of the termination or redemption.
Description of Services Covered by Advisory Fees
Fees generally cover investment advice, account servicing, access to the portfolio management team and
review of client information. Each Fund bears all transaction costs and other account and service charges.
Periodic meetings are held with many clients at which Lazard Alternatives’ current economic outlook,
investment strategy, and views on various industries and specific companies are presented. These
services are a regular part of the investment management and advisory services Lazard Alternatives
provides to its clients. Lazard Alternatives does not charge a special fee for consultation services.
Lower fees for comparable services may be available from other sources.
Ability to Deduct Fees
In general, Lazard Alternatives will instruct each Fund’s custodian or administrator to deduct its
management or advisory fee on a quarterly basis.
Potential Conflicts of Interest Relating to Compensation Arrangements
Client service representatives and other employees and employees of affiliates may receive incentive
compensation, a portion of which may be attributable to the sale of the Funds, mutual fund shares or other
funds. The receipt of incentive compensation creates a potential conflict of interest in that an employee
may have an incentive to recommend a product for a client based on the ability to receive the incentive
compensation, rather than the client’s needs. However each of Lazard Alternatives and LAM have
adopted policies and procedures designed to prevent breach of its fiduciary responsibilities. Each
employee of LAM and Lazard Alternatives is required to comply with such policies and procedures, and
each employee is required to act in the best interest of clients. As Lazard Alternatives only serves as an
investment manager to private funds or funds where eligibility is limited to certain types of investors, this
potential conflict of interest is not generally applicable.

Item 7 – Types of Clients

As noted above, Lazard Alternatives manages three Funds, one of which is registered with the SEC under
the 1940 Act and the 1933 Act. Generally, Lazard Alternatives is entitled to: (i) a fixed advisory fee,
payable quarterly in advance at the beginning of each calendar quarter, based on the assets under
management as of the last business day of the previous calendar quarter; and (ii) a performance fee,

generally paid on an annual basis following the end of each fiscal year, equal to a portion of appreciation
in the assets under management, each as described in the offering memorandum or prospectus and
investment management agreement for the respective Fund or in the investment management agreement
for the client.