From: Mario Giannini [mailto:mgiannini@hamiltonlane.

com]

Sent: Thursday, March 06, 2008 8:51 AM

To: Harris, Britt; MacDonell, Allen

Subject: Jim Lee

Britt and Allen:

I sat down with Jim Lee the other day in NY. It was a good discussion and all macro about how public pension funds look at things or do things and what other funds are doing or thinking. We talked a lot about the political or headline risk around pubic funds and ways funds get ahead of that. The only specific "deal" discussion was on Encap and Encap's thoughts regarding Hamilton Lane's response time.

He is, as you know, a very strong supporter of your programs and initiatives and was extremely complimentary of what you are doing.

That's it.

Mario

Meeting Memorandum

EnCap Energy Infrastructure Fund, L.P.

To:

From:

Date: status:

Investment Committee Due Diligence November 10, 2008 Internal Use Only

Meeting Date:

GP Attendees:

HL Attendees:

October 29, 2008

EnCap: Martin Phillips and Gary Petersen Flatrock Energy: Bill Waldrip and Billy Lemmons Mike Kelly and Drew Kolb

Meeting Conclusions:

• The Flatrock professionals are very well connected within the midstream industry and are experienced in advising and evaluating midstream investments.

• EnCap has a strong prior track record but their expertise is in the upstream sector. For this reason, the Flatrock team will be responsible for the origination of investment opportunities and day-to-day activities. The EnCap professionals will only spend 10%-15% of their time on the Fund.

• EnCap and Flatrock have worked together in the past but this is the first time Flatrock will be working exclusively alongside of EnCap. Although the organizations will be working together, the teams will stay separate of one another and each will perfrom their respective roles. The team's cohesiveness is unknown at this point.

• The General Partner has recently made midstream investments using capital from Fund VII. Upon closing EEIF, the General Partner will sell two-thirds of each midstream Fund VII investment to EEIF at cost, while keeping one-third of each investment in Fund VII.

Fund Information:

General Partner:

Fund:

Firm Inception:

Target Size:

Hard Cap:

Strategy:

Transaction Range:

Investment Range:

No. of Investments:

Geography:

Team:

Locations:

Industries:

Competitors:

Closing Schedule:

Target Returns:

EnCap Investments L.P. ("EnCap")

EnCap Energy Infrastructure Fund, L.P. ("EEIF") 1988

$750 million Not Provided

Energy Infrastructure Growth Capital Not Provided

$25 million - $75 million Not Provided

North America

19 EnCap Investment Professionals, 10 Flatrock Investment Professionals 1 EnCap IR Professional, 5 EnCap Administrative Employees

San Antonio TX, Houston, TX, Dallas, TX, and Edmond, OK

Midstream Oil and Gas

Not Provided

First Close: November 2008; Final Close: March 2009 25% IRR anda 2.0x on invested capital

The attached report is intended solely for the clients and employees of Hamilton Lane.

It contains confidential and proprietary Hamilton Lane information.

Meeting Memorandum

EnCap Energy Infrastructure Fund, L.P.

Prior Funds:

''fiQfaf eommitmenf~

, ~SMMl ~,

, '

Private Equity Fund I 1994 $105
Private Equity Fund II 1996 115
Private Equity Fund III 1997 480
Private Equity Fund IV 2001 525
Private Equity Fund V 2004 825
Private Equity Fund VI 2006 1,500
Private Equity Fund VII 2007 2,500 • EEIF will be EnCap's first fund dedicated to midstream investments. EnCap's Prior Funds have focused on upstream investments.

Contact:

Hallie Kim, the General Partner, 713-659-6100

Key Terms:

Investment Period: 5 years

Fund Term: 10 years; + two one-year extensions

Management Fee: Investment Period: 2% of committed capital

Post-Investment Period: 1.5% of invested capital

Fee Offset: 100%

Carry/Hurdle: 20% / 8% preferred return

GP Commitment: 2%

Key Person: Not Provided

Organization:

• EnCap has generally sought investment opportunities in the upstream sector of the oil and gas industry and has limited experience with midstream investments. As such, EnCap has entered into an agreement with Fiotrock Energy Advisors, LLC ("Fiatrock"j, a midstream advisory firm.

• Flatrock has effectively terminated its advisory business, and the Flatrock team is expected to devote substantially all of its time investing and managing EEIF.

• EnCap and Flatrock have entered into a three fund commitment.

• EnCap and Flatrock are the sole managing members of the General Partner.

• EnCap owns 70% of the General Partner and holds four of the seven seats on the investment committee. Flatrock owns 30% of the General Partner, holds three of the seven seats on the investment committee and will manage the day-to-day operations.

• Flatrock is expected to hire one or two additional investment professionals.

The attached report is intended solely for the clients and employees of Hamilton Lane.

It contains confidential and proprietary Hamilton Lane information. 2

Meeting Memorandum

EnCap Energy Infrastructure Fund, L.P.

Organization (cont'd):

Senior Partners:

David Miller Encap Principal! Co- 20
founder
Gary Petersen Encap Principal! Co- 20
founder
Martin Phillips Encap Principal 19
Robert Zorich Encap Principal! Co- 20
founder
Dennis Jaggi Flatrock Executive VP ! 7
Senior Portner
William Lemmons, Jr. Flatrock Executive VP ! 6
Senior Portner William Waldrip

Flatrock President! Senior Portner! Founder

• President of PMC Reserve Acquisition Company (1988-1996)

• Co-CEO of MAZE Exploration (1981-1988)

• Senior VP of the Corporate Finance Division of the Energy Banking

Group for Republic Bank (1985-1988)

• Executive VP for Nicklos Oil and Gas Company (1979-1984).

• Senior VP in the Energy Banking Group of NationsBank (1987-1989).

• Senior VP of Trust Company of the West, a pension fund manager

• Co-CEO and co-founder of MAZE Exploration.

• COO for Enogex

• VP and Regional Manager with Delhi Pipeline Corporation (1981- 1997).

• VP with Enron Corporation (1992-2002)

• Project Development Engineer for Texas Oil & Gas Corporation (1989- 1992).

7

• COO for the Lewis Energy Group (1998-2000)

• Heldvorious positions at Delhi Pipeline Corporation (1980-1997).

Track Record:

• EnCap's Prior Funds have consisted mainly of investments in the upstream sector.

• EnCap's track record within the midstream space includes four transactions totaling $103.2 million of capital invested for realized proceeds of $208.1 million and unrealized value of $396.3 million, generating a 5.9x ROI and a 63.8% Gross IRR.

Private Equity Fund I 1994 $104 $196 $0 1.9x 32%
Private Equity Fund II 1996 115 142 0 1.2x 7%
Private Equity Fund III 1997 A A A rw,", 326 2.9x 31%
...... " 70V
Private Equity Fund IV 2001 529 1,365 157 2.9x 101%
Private Equity Fund V 2004 792 404 1.261 2.1x 50%
Private Equity Fund VI 2006 610 134 637 1.3x 32%
Private Equity Fund VII 2007 207 3 236 1.2x N/A
Total $2,801 $3,225 $2,617 2.b: NfA • Flatrock has not invested capital through a fund structure in the past, but does have a track record of investing capital on behalf of large midstream companies.

The attached report is intended solely for the clients and employees of Hamilton Lane.

It contains confidential and proprietary Hamilton Lane information. 3

Meeting Memorandum

EnCap Energy Infrastructure Fund, L.P.

Track Record (cont'd):

t ' " ' " , , , ' " , Frdflioc~ EaerQ¥ ~d:Vjso"s. (15(;)

, , , Prior lnveSfment !'enorlnance

: " As of 0[>127108

DJ Bosin Gathering and Processing 1996 $10 $20 $60 8.0x 58%
Southt'.:;cst 0/iex!so Gathering end Processing 1997 130 148 450 4.6x 55%
Oklohorno Gathering ond Processing 2001 40 27 90 2.9x 35%
Barnett Sho!e & Rockies GoHieririg and Processing 2004 235 635 0 2.7x 56%
Totol $415 $830 $600 3.4)( 54% Strategy & Market:

• EEIF seeks to be a lead investor in midstream oil and gas opportunities. In most cases EEIF will be the sole investor and have board control.

• EEIF will provide growth capital to proven midstream management teams but on occasion will buy a business and restructure management.

• The Flatrock team will be responsible for the origination of investment opportunities stemming from their prior midstream relationships developed over the past 30 years.

• According to the General Partner, deal flow is expected to originate from 50 upstream-focused companies that EnCap currently is invested in. These companies are actively investing in opportunities across the oil and gas provinces of North America and many of these opportunities require midstream and infrastructure investment.

• EEIF's capital will be used to invest in greenfield development projects or used to make acquisitions.

• EnCap invests differently than a typical private equity fund in that it commits capital to each investment through tranches rather than in one lump sum at the beginning of the investment. The General Partner believes that this allows EnCap to exit from a poorly performing investment and reduces the entire risk of the portfolio.

Recommendation:

Decline the investment opportunity.

The attached report is intended solely for the clients and employees of Hamilton Lane.

It contains confidential and proprietary Hamilton Lane information. 4

Meeting Memorandum

EnCap Energy Infrastructure Fund, L.P.

GPRS:

EnCap Energy Infrastructure Fund, loP.

Criteria Team

Track Record Competitive Positioning

Weighted Average

Score 3.3 3.5 4.0

3.6

The GPRS is a proprietary model developed by Hamilton Lane to evaluate each General Partner and provide a means to compare one fund to another on a more quantitative basis. Each of the three categories (Team, Track Record, and Competitive Positioning) is comprised of several subcategories which are weighted and totaled to create an overall value for the fund. The ratings for each category and subcategory are 1 through 5, with 5 being the best.

The attached report is intended solely for the clients and employees of Hamilton Lane.

It contains confidential and proprietary Hamilton Lane information. 5

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