Nierenberg Investment Management Company LLC

Item 5 - Fees and Compensation

   A. We are compensated by a management fee that is based upon a percentage of net asset
      value of the Clients and performance-based allocations. The fees and allocations are
      generally non-negotiable.

       Management Fees

       Each of the Clients pays a quarterly management fee in advance.

       Investors in the D3 Funds are generally designated as Old Limited Partners or New Limited
       Partners. Old Limited Partners include limited partners who invested in any of the Funds

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    prior to February 28, 2003. New Limited Partners generally include all other limited
    partners.

    The management fee payable by the D3 Funds is calculated differently for the Old Limited
    Partners and the New Limited Partners. In calculating the management fees, the net asset
    value of the Funds will not include any portion of the net asset value attributable to certain
    investors that are not subject to a management fee.

    For the D3 Funds, the quarterly management fee payable by Old Limited Partners is
    determined by calculating:

    (i)     the product of (A) .00375 and (B) the portion of the net asset value of the Funds
            on a combined basis up to but not exceeding $15 million; plus

    (ii)    the product of (A) .0025 and (B) the portion of the net asset value of the Funds on
            a combined basis that is in excess of $15 million and not exceeding $30 million;
            plus

    (iii)   the product of (A) .001875 and (B) the portion of the net asset value of the Funds
            that is in excess of $30 million; and

    (iv)    multiplying the sum of (i), (ii), and (iii) by a fraction, the numerator of which is
            the net asset value of the Funds attributable to the accounts of the Old Limited
            Partners with respect to the Fund for which the calculation is being applied, the
            denominator of which is the net asset value of the combined Funds. The resulting
            amount is the “Old Limited Partner Management Fee.”

    The Old Limited Partner Management Fee for any fiscal quarter is allocated among Old
    Limited Partners in proportion to their capital account balances as of the first day of such
    fiscal quarter.

    The quarterly management fee payable by each New Limited Partner in the D3 Funds is
    equal to 0.0025 multiplied by the net asset value of such New Limited Partner’s capital
    account.

    For the Benedict Value Fund, the quarterly management fee payable is as follows:

    (i) 0.25% (approximately 1.0% per annum) with respect to Tranche A Interests; and

    (ii) 0.5% (approximately 2.0% per annum) with respect to Tranche B Interests.

    Once paid, the Management Fee shall be non-refundable, except that it will be prorated for
    less than full calendar quarters and appropriately adjusted for purchases or withdrawals.
    All or part of the Management Fee applicable to any Limited Partner (including, without
    limitation, affiliates, or employees of the General Partner) may be waived, reduced or
    rebated by the General Partner from time to time in its discretion without notice to, or the
    consent of, the other Limited Partners.

    The managed account pays a quarterly management fee in the amount of 0.0025 multiplied
    by the net asset value of the equity position and 0.00125 multiplied by the balance of cash
    and cash equivalents.

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Item 7 - Types of Clients

We primarily provide investment advice to clients who are private investment funds and other
managed accounts. Investors in the Funds are generally high net worth individuals and institutional
investors that qualify as “accredited investors” (as defined in Rule 501 under the Securities Act of
1933, as amended) and “qualified clients” (as defined under the Investment Advisers Act of 1940,
as amended (the “Advisers Act”)). Investors in the Bulldog Fund must also qualify as “qualified
purchasers” (as defined under the Investment Company Act of 1940, as amended). The minimum
investment in the D3 Funds is generally $500,000. The minimum investment in the Benedict Fund
is generally $250,000. The General Partner to each Fund has the discretion to waive or reduce each
minimum.

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