Pinyon Asset Management LP

Item 5: Fees and Compensation
Pinyon typically receives a management fee of 1.5% per annum, paid quarterly, in advance,
based on the net assets of each Fund (without accrual of the incentive allocation) as of the first
day of the quarter. If additional contributions are made to a Fund during the quarter, the
management fee will be prorated and charged at the time of such contribution. The management
fee will be prorated for any period that is less than a full fiscal quarter.

Furthermore, any prepaid but unearned management fee will be refunded to an investor in the
applicable Fund. The Adviser generally determines the amount of the relevant refund on a pro
rata basis, based upon the portion of the relevant period during which it provided services.

In addition to the management fee, the Funds typically pay an incentive allocation of 20% of the
net profits subject to a high watermark. The incentive allocation is payable as of the end of each
Fund’s fiscal year or as of an investor’s redemption date.

Incentive allocation arrangements may create an incentive for Pinyon to make investments on
behalf of the Funds that are riskier or more speculative than would be the case in the absence of
such compensation. In addition, calculation of incentive allocation earned is, in part, based on
unrealized gains that may never materialize.

In addition to the Adviser’s fees, investors will bear indirectly the fees and expenses charged to
the Funds. Each Fund sets forth its specific fee structure (including how it charges fees) along
with the additional operational expenses in its governing documents. Fees and expenses that are
typically borne by the Funds generally include, without limitation, fees paid to the Adviser and
to the Fund’s administrator, independent directors’ fees, legal, accounting, auditing (including
financial statements) and other professional expenses, insurance (including D&O insurance),
administration, administrative fees and expenses, research expenses (including research-related
travel) and investment expenses such as commissions, trading and portfolio services and support,
interest on margin accounts and other indebtedness, taxes, custodial fees, bank service fees and
other expenses related to the purchase, sale or transmittal of the Fund’s assets as shall be
determined by the applicable Fund in its sole discretion. The brokerage fees and expenses are
also discussed in more detail in Item 12 “Brokerage Practices” below. The Funds are organized
in a “master-feeder” structure, so the Feeder Funds will bear a pro-rata share of the expenses
associated with the Master Fund. Investors should review all fees charged by the Adviser and its
affiliates, custodians and brokers and others to fully understand the total amount of fees to be
paid. Fees and expenses paid to third parties in connection with the acquisition or disposition of
investments are borne by the Funds.

Notwithstanding the general fee structure described above, Pinyon has negotiated different fee
structures with certain investors. Such negotiations and agreements are governed by separate
agreements commonly referred to as “side letters”. The side letter provisions, which are not
found in the Funds’ organizational or offering documents, entitle certain investors to different
terms and conditions related to fees, reporting, liquidity, and notifications, among other terms.
The Adviser reserves the right, but does not have the obligation, to negotiate or waive fees as
well as other investor terms and conditions.

If, for any reason, an investor wishes to redeem from the Funds, the investor must provide prior
written notice in accordance with the terms of governing documents of the relevant Fund.

Item 7: Types of Clients
Pinyon’s clients are currently the Funds, which are unregistered pooled investment vehicles. The
Funds consist of a Delaware limited partnership and two Cayman Islands exempted companies
which Pinyon and its related parties control. Although Pinyon is a registered investment adviser,
the Funds rely on rules promulgated under the United States federal securities laws that exempt
privately offered investment vehicles from registering as investment companies.

Investment in the Funds is limited to investors that meet certain financial sophistication
requirements. Investors in the Funds must be (i) “accredited investors” within the meaning of
Regulation D under the Securities Act; and (ii) “qualified purchasers” within the meaning of the
Investment Company Act. Prospective investors may be required to meet additional suitability
requirements. Investors considering investment in the Funds should consult with their own
investment, tax and/or legal consultants prior to investing.

The minimum subscription that will be accepted from a new investor in either of the Feeder
Funds is $2,000,000, with any amount in excess thereof to be subscribed in increments of
$100,000. The General Partner or directors of each Fund, in their sole discretion, may waive or
reduce these minimums.

Pinyon does not currently manage any separate accounts, but Pinyon may, without notice, elect
to manage separate accounts for individual or institutional clients.

Co-Investment
Where appropriate, Pinyon may provide certain investors in a Fund or third parties the
opportunity to co-invest through a co-invest fund organized by Pinyon in specific investments
that may or may not also be held in the Master Fund, taking into account the Master Fund’s
investment limitations, the size of the investment opportunity and the demand among potential
co-investors.

Pinyon may arrange for the organization of a new limited partnership or other type of entity to
serve as a co-investment entity. Pinyon will allocate the available investment among the Master
Fund, the co-invest fund and any other third parties as it may in its sole discretion determine.

Alternative Investment Vehicles
Alternative investment vehicles may be used whenever Pinyon determines in good faith that for
legal, tax, regulatory or other reasons it is in the best interests of any or all of its investors that all
or any portion of a particular investment be made through an investment structure outside of
such Fund. Participants in such investments are generally required to make all or a portion of
their investments through such alternative investment vehicle, which invests on a parallel basis
with or in lieu of the applicable Fund, and are required to make capital contributions directly to
each such alternative investment vehicle to the same extent, for the same purposes and on the
same terms and conditions as investors are typically required to make capital contributions to
such Fund. Each such investor has the same economic interest in all material respects in the
investment made through an alternative investment vehicle as such investors would have if such
investment had been made solely by the applicable Fund, and the other terms of such alternative

investment vehicle are generally substantially identical in all material respects to those of such
Fund, to the extent applicable.