Valeo Ventures Management LLC

Item 5           Fees and Compensation

   A. The Firm’s annual investment management fee is the lesser of 1.75% of assets under
      management or a fixed fee of $2,000,000 and payable on a quarterly basis, in advance.

         From time to time, the Firm may agree to amend its fee structure and rates or may reduce
         or waive any of its fees. Clients will be responsible for the fee contained in their applicable
         agreement, as amended from time to time. Based on our pricing arrangements, the Firm’s
         clients can pay different fees for the same or similar services. The services provided to any
         client could be available from other investment advisers at a lower (or higher) rate. All
         clients and prospective clients should be guided accordingly.

   B. Clients will receive an invoice approximately twenty days prior to the start of each fiscal
      quarter. Payment is due upon receipt of the invoice.

   C. Clients may incur certain charges imposed by accountants, custodians, brokers, attorneys,
      third-party investment products and other third parties, such as fees charged by other
      managers, custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire
      transfer and electronic fund fees, other fees and taxes related to brokerage and custodian
      accounts and securities transactions, and certain other expenses.

   D. All invoiced fees are due by the first day of the fiscal quarter.

   E. Neither Valeo nor any of its associated persons accept compensation from the sale of
      securities or other investment products.

Item 7           Types of Clients

         Our clients are generally corporations and other businesses. We do not have any minimum
         asset requirements or minimum fees, but we do reserve the right to accept or reject any
         client.