Ochoco Investment LLC

Item 5 – Fees and Compensation

The fees applicable to Ochoco Partners are set forth in detail in its Limited Partnership Agreement.
The Adviser is generally paid a quarterly management fee, in advance, at the rate of 0.25% (equal
to 1.0% annually) of the beginning quarterly balance in the capital account of each limited partner
of the Fund. In addition, Ochoco GP, LLC (“Ochoco GP”), the general partner of the Fund and an
affiliate of the Adviser, receives an annual performance allocation equal to 20% of the amount by
which the net asset value in respect of each limited partner’s capital account (including realized
and unrealized gains and net of the management fee) exceeds a predetermined hurdle rate.

The hurdle rate used in determining the performance allocation for the Fund is set at 5% of the
balance of each limited partner’s capital account at the beginning of the year, with the exception
that the capital balance used to calculate the hurdle rate will never be less than the limited partner’s
initial capital contribution. The hurdle rate is cumulative from year to year: to the extent the
appreciation (net of the management fee or other applicable expenses) of the limited partner’s
capital balance does not exceed the hurdle rate during the annual measurement period, the

difference will be carried forward and become part of the limited partner’s loss carryforward (see
below).

The performance allocation is made at the end of each calendar year and when an investor
withdraws from the Fund. The performance allocation of net profits from each investor’s capital
account is subject to a loss carryforward limitation such that no performance allocation is made
until prior net losses allocated to such investor are recouped. The performance allocation is
adjusted to take into account distributions to and withdrawals by an investor.

The Adviser charges management and performance fees to separately managed accounts that are
largely similar to the management fees and performance allocation charged to the Fund. The
specific manner in which fees are charged is established in a client’s investment management
agreement. Generally, each client is charged a management fee based on the market value of the
client’s assets under management and a performance fee based on appreciation of the client’s assets
under management, subject to the hurdle rate. The Adviser or its affiliates may adjust fees at their
discretion.

All fees (including performance allocations) are subject to change. Clients understand and agree
that the fee schedule in effect for any account shall continue until thirty (30) days after the Adviser
has notified the client in writing of any change in the fee schedule that may be applicable to the
client’s account(s), at which time the new schedule will become effective, unless the client has
notified the Adviser that an account is not to be continued under the revised fee schedule. Fees and
performance allocation with respect to the Fund are handled in the same manner on an investor-
by-investor basis.

Separately managed account clients may elect to be billed for management and performance fees,
or to authorize us to deduct management fees and performance fees from their accounts through
an independent custodian. Clients may receive a refund of a pre-paid fee if they withdraw money
during the quarter or if the advisory contract is terminated prior to the end of the quarter.
Management fees are prorated for any period less than a full quarter and therefore the refund will
be equal to the management fee billed at the beginning of the quarter less the prorated management
fee for the period the money was managed. Fees are not negotiable and are intended to be the same
for all clients, whether the client is a private investment partnership or a separately managed
account.

In addition to paying advisory and performance fees to the Adviser, clients are subject to other
expenses such as brokerage commissions, custody of assets, clearing and settlement charges and
costs associated with foreign exchange transactions, among others. The Adviser’s current expense
policy is that clients will bear brokerage and other transactional expenses, custody fees and other
related expenses directly associated with the Adviser’s management of a client’s investment
portfolio. Non-portfolio expenses, including tax and audit, compliance expenses and any non-
routine or other extraordinary costs are borne by the Adviser. The Adviser reserves the right in the
future to modify these policies with proper advance notice to and with any necessary approval
from clients.

To the limited extent that expenses associated with the Adviser’s services are borne by the client,
the Adviser has no financial interest in such expense, provided that with respect to any “soft dollar”
arrangements established or entered into by the Adviser with any brokerage firm, the Adviser may
obtain products or services that qualify as “research and brokerage services” within the meaning
of Section 28(e) of the Securities Act of 1934, as amended.

Item 12 describes the factors that the Adviser considers in selecting brokers for client transactions
and determining the reasonableness of their compensation (e.g., commissions).

All management fees and performance allocations and fees are subject to negotiation at the
Adviser’s discretion. It is the Adviser’s general policy not to negotiate fees with clients.

Item 7 – Types of Clients

Ochoco Investment provides portfolio management services to Ochoco Partners, a private
investment partnership, as well as qualified clients with separately managed accounts. Qualified
clients could include individuals, foundations, and IRAs, among others. The Adviser only provides
investment management services to separately managed accounts that are Qualified Clients as
defined by Rule 204-3 of the Investment Advisers Act of 1940 (“Advisers Act”).

Item 8 – Method of Analysis, Investment Strategies and Risk of Loss

Our primary strategy is to purchase undervalued common stock in a limited number of foreign and
domestic companies with good economics, strong management teams and promising growth
potential. We like to purchase common stock at an attractive price relative to the underlying
company’s long-term earnings potential. We typically invest with a time horizon of 3-5+ years,
although circumstances vary and in certain situations our investment horizon may be shorter.

Because the qualities that we seek when purchasing commons stocks are highly sought after, we
believe we are more likely to find investment opportunities in out-of-favor companies where the
business is fundamentally sound but the short-term outlook is poor and therefore the business is
available at a depressed valuation. We place a relatively high degree of importance on company
management and believe that management actions can often serve as a catalyst for value realization
by improving or otherwise optimizing business operations, investing in new products or services
likely to generate future growth and ultimately enhancing the long-term earnings potential of the
business.

We invest in the common stock of companies of any size, but we spend more of our time on
companies with smaller market capitalizations where we believe there is less likelihood of interest
from institutional investors due to size and liquidity constraints.

We will be concentrated. We invest in a limited number of securities and generally target a
portfolio of 10-15 positions, with the majority of the portfolio invested in 5-10 core positions.

Our research of common stocks typically involves the study of general and trade-related news
(newspapers, magazines, trade publications, etc.), analyzing a company’s financial reports,
attending industry conferences, analyst meetings and trade shows, interviewing management and
obtaining information from industry sources including competitors, suppliers, customers, etc.

In addition to our primary activity of investing in common stocks, we also consider other types of
investment opportunities and may from time to time invest in a variety of other securities and
assets including warrants, options, debt securities, real estate, loans secured by real estate or other
tangible property, and private businesses or other private equity investments. We analyze these
securities with the same value-oriented approach it uses to analyze common stock investments,
and seeks to purchase these securities at a discount to their value as determined by asset values,
cash flows or earnings potential.

The material risks relating to our investment strategy and methods of analysis include the
following:

   •   Market Risk. Securities in which the Adviser invests on behalf of its clients will fluctuate
       as the markets for those securities fluctuate. The prices of these securities will decline,
       perhaps severely, over short-term or long-term periods. Performance of individual
       securities can vary widely.

   •   Investment Manager Risk. Our investment decisions may cause our strategy to
       underperform broad market indices. We may be incorrect in assessing a particular industry
       or a company, including the anticipated earnings growth of a company. Our estimates of
       underlying value may prove optimistic. We may not buy chosen securities at the lowest
       possible prices or sell securities at the highest possible prices.

   •   Holding Period Risk. The Adviser typically invests with a time horizon of 3-5+ years. This
       approach may bring risks to the portfolio. For example, we may not take advantage of
       short-term gains in a security that could be profitable to a client. In addition, if our
       predictions are incorrect, a security may decline sharply in value before the security is sold.

   •   Concentration Risk. Client accounts will be concentrated in a limited number of securities
       with a target portfolio of 10-15 positions and the majority of the portfolio invested in 5-10
       core positions. Consequently, client portfolios are subject to more rapid change in value
       than would be the case if the Adviser were to maintain a wider diversification among types
       of securities and other instruments, countries or industry sectors.

   •   Small-to-Medium Sized Company Risk. We will invest in equity securities of small-to-
       medium sized companies that we believe have potential for capital appreciation
       significantly greater than that of the market averages. Such companies may have limited
       product lines, markets, or financial resources and may be dependent on a limited
       management group. Securities of small-to-medium sized companies may be traded in OTC
       markets. Many OTC securities trade less frequently and in smaller volumes than exchange-
       listed securities and we may experience some difficulty in acquiring or disposing of
       positions in these securities at prevailing market prices.

As described above, the Adviser primarily invests in equity securities of U.S. and non-U.S. issuers.
We may also invest in other securities, instruments and assets, including warrants, options, debt
securities, real estate, loans secured by real estate or other tangible property, and private businesses
or other private equity investments. The following risks are those most commonly associated with
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