Sonoma West LLC

Fees and Compensation
Sonoma West charges most clients an annual investment management fee based on the
following schedule:

 Assets under management                                   Annual Fee
 On the first $2 million                                   1.00%
 Amounts in excess of $2 million & up to $5 million        0.85%
 Amounts in excess of $5 million & up to $10 million       0.75%
 Amounts in excess of $10 million                          0.50%

The firm is also following the practice of charging clients with assets in excess of $20m a fee of
0.25% (25 basis points) per annum excluding cash equivalent balances.

The basic hourly fee for non-discretionary accounts (primarily for individuals) is $400 per hour.
The total fees for such services will vary depending on the nature and complexity of each client’s
financial circumstances and the services authorized and performed.

Clients may direct the firm to maintain “unsupervised assets” within the portfolio for the
convenience of the client. The firm generally does not charge a management fee on
unsupervised assets and is not responsible for the supervision or suitability of such assets.

However, the firm may charge a fee on certain unsupervised assets such as the case when it is
asked to provide ongoing reporting or research on unsupervised private investments. To date, the
firm has not charged such fees to any clients. If it were, the firm would communicate this intention
in advance to the client and follow the provisions for fees specified in its standard advisory
agreement.

The firm may negotiate a different investment advisory fee arrangement with the client,
including a flat fee arrangement based on the nature of the client’s account.

The firm has negotiated lower fees for certain clients, such as charitable organizations or family
members and friends.

The firm charges fees quarterly in advance based on the total market value of the account value
at the end of the prior quarter. The initial quarterly fee for a new client is pro-rated based upon the
date the client’s assets are transferred to the firm’s management or as negotiated between the
firm and the client.

Most clients authorize t he firm to deduct fees automatically from their brokerage accounts,
but clients may request that the firm send quarterly invoices to be paid by check.

If a client terminates the investment management agreement with the firm in the middle of a
billing period, the firm will refund any unearned investment management fee to the client on a
pro-rata basis based upon the time remaining in the quarter.

In addition to investment management fees, clients bear trading costs and for certain
investments (i.e., private placements) the custodian may charge the client a nominal fee to
custody such investments.
To the extent that clients’ accounts are invested in mutual and exchange traded funds, these
funds pay a separate layer of management, trading, and administrative expenses.

Sonoma West believes its fees are competitive with those fees charged by other investment
advisors for comparable services. However, comparable services may be available from other
sources for lower fees than those charged by the firm.

Types of Clients
Sonoma West primarily provides customized investment management services to high-net-
worth individuals & associated trusts, estates, charitable organizations and other legal entities.
The firm’s minimum client size for new clients is generally $10,000,000 but this amount is
negotiable.

Methods of Analysis, Investment Strategies and Risk of Loss
The firm uses a variety of methods to evaluate the overall financial markets, asset classes and
various types of securities. The firm p er f or ms i ts own internal research and analysis as well as
receives research and analysis from third parties. Additionally, the firm reviews statements and
reports provided by other investment advisors that provide investment management services to
firm clients. This analysis varies depending on the security in question.

After developing an investment policy for each client, the firm creates an investment strategy.
This strategy integrates the client’s needs and goals with current developments in the economic
and financial markets.

The firm primarily invests for long time horizons. The firm’s investment philosophy is founded on
the premise that investors can build a strong, secure future by following a long-term investment
program, and by diversifying their investments across multiple asset classes and money
managers. However, market developments could cause the firm to sell securities more quickly.

Depending on a client’s investment objectives, the firm may engage in option writing. The use
of option writing poses additional risks that are discussed in detail with any clients who are
considering the use of these investment vehicles.

Mutual funds are an investment vehicle and the investment strategies, objectives and types of
securities utilized by mutual funds vary widely.

All mutual funds incur operating expenses in connection with the management of the
fund. Mutual funds pass some or all of these expenses through to their shareholders (the
individual investors in the funds) in the form of management fees. The management fees
charged vary from mutual fund to mutual fund. In addition, mutual funds charge shareholders
(individual investors in the funds) other types of fees such as a sales load or a transaction fee.
These charges also vary widely among funds.

The firm generally invests assets in no-load mutual funds. A “true” no-load mutual fund
assesses no Rule 12b-1 fee. Even though the firm invests in no-load funds, clients will still pay
management fees and expenses as charged by each mutual fund in which they are invested
in addition to those fees charged by the firm.

Closed end funds and other pooled investments vehicles have different expense structures.
Client is advised to consult with the firm regarding the various fee structures.

All investing involves a risk of loss and the investment strategy offered by t h e f i r m could lose
money over short or even long periods. Performance could be negatively impacted by a
number of different investment risks including but not limited to market risk, which is the chance
that overall markets will decline. Markets tend to move in cycles, with periods of rising prices and
periods of falling prices.