LFM Capital LLC

Item 5 – Fees and Compensation

As a general matter, compensation is negotiable and varies, but typically the LFM Funds pay
to their respective general partner or an affiliate thereof an annual management fee and a
performance-based fee. The Longhorn Fund and the Co-Investment Fund do not pay a

management fee or performance-based fee to their respective general partner or any affiliate
thereof.

Management Fee

During the investment period, the LFM Funds pay to their respective general partner or an
affiliate thereof an annual management fee equal to 2.00% per annum of the aggregate
capital commitments of the Limited Partners that are not affiliated with LFM Capital (the
“Investor Limited Partners”), payable quarterly in advance. After the expiration of the
investment period or upon activation of a successor fund, management fees equal to 2.00%
per annum of Actively Invested Capital, are charged to Investor Limited Partners. The
Longhorn Fund and the Co-Investment Fund do not pay any management fees to their
respective general partner or any affiliate thereof.

Portfolio Company Fees and Management Fee Offsets

The LFM Funds have adopted a management fee reduction equal to 100% of the Investor
Limited Partners’ portion of any transaction, monitoring, break-up, success or directors’ fees
paid by their respective portfolio companies during any calendar year (“Portfolio Company
Remuneration”) after aggregate management fee and Portfolio Company Remuneration to
their respective general partner and its affiliates, net of expenses, exceeds a threshold
amount described in each of the LFM Funds’ current Governing Documents, provided,
however, that the Management Fee will not be reduced below zero. Further, the
Management Fee shall not be reduced by any arms-length service fees received by the
respective general partner, its partners or its affiliates from any portfolio company of the
LFM Funds in connection with consulting or management services provided to such portfolio
companies.

Item 7 – Types of Clients

LFM Capital provides discretionary and non-discretionary investment advisory services to
private investment funds organized and sponsored by the firm. Fund investors doing
business with LFM Capital include endowments, other institutions and high net worth
individuals.

LFM Capital provides portfolio management services to the Funds. The Funds are organized
as limited partnerships. The Funds are not considered to be an “investment company” as
defined under the Investment Company Act of 1940, as amended (the “Investment Company
Act”), pursuant to exemptions under Section 3(c)(1) or 3(c)(7) of the Investment Company
Act.

Each Investor in the Funds must meet certain eligibility provisions. Interests in the Funds
are only available to qualified investors as defined in Rule 205-3 under the Advisers Act
(“Qualified Clients”).

In general, the minimum investment in the Fund is $5,000,000, with the general partner of
each fund reserving the right to accept capital commitments of lesser amounts at its
discretion. The Longhorn Fund and the Co-Investment Fund do not have minimum
investment amounts. The general partner of each fund may, in its discretion, reject any
subscription that is tendered.