ABS Investment Management LLC

Item 5 – Fees and Compensation
The specific manner in which fees are charged by the Adviser is established in a client’s written
agreement with the Adviser.

The RIC charges a monthly management fee amounting to an annual management fee of 1%.
The Mutual Fund charges a .95% annual management fee. For its other Clients, the Adviser
generally charges a quarterly management fee computed at an annual rate of 1% of assets under
management as described in the relevant offering documentation and/or investment management
agreements. In addition, performance fees are charged at a rate of up to 10%, in accordance with
Rule 205-3 of the Investment Advisors Act of 1940. The Adviser will generally bill its management
fees on a quarterly basis and performance fees on an annual basis as set forth in governing
documents, including offering documents, management agreements and/or other governing
documents, as applicable, for each Client. Clients may elect to be billed in advance or arrears
each calendar quarter. Clients may also elect to be billed directly for fees or in most cases, the
third-party administrator is authorized to directly debit fees from client accounts. Management
fees shall be prorated for each capital contribution and withdrawal made during the applicable
calendar quarter. Accounts initiated during a calendar quarter will be charged a prorated fee.
Account termination terms generally coincide with fee calculation dates so that management fee
refunds are generally not appropriate. However, if such a circumstance were to arise,
management fees would be refunded based on the proportionate time the assets were managed
during the management fee calculation period.

Investors may withdraw from the Mutual Fund or the CIT on a daily basis. Investors may withdraw
from the RIC, Partnerships or Funds as described in the offering documents and/or investment
management agreements with up to 90 days’ notice and generally on a quarterly basis. Early
redemption charges may apply within the first 36 months of investment and may be waived at the
discretion of the Adviser. As described in the Partnerships and Funds’ offering material, the
Adviser has the right to negotiate different fee arrangements (including waiving or reducing
performance based and/or asset-based fees as well as applying different calculation
methodologies for such fees) at its discretion. Different fee arrangements may be achieved by
creating different share classes, through the use of side letters or by adding/subtracting in kind
shares to modify the impact of fees that otherwise would have been charged.

As more fully described in each of the Mutual Fund’s, CIT’s, RIC’s, Partnerships’ and Funds’
offering materials, the products also bear additional expenses associated with organizing,
administering and continually offering the product. It is important to note that all Clients bear, in
addition to their own expenses, their proportionate share of the expenses of Investment Funds in
which they may be invested. As such, expenses may directly or indirectly include, among other
things, brokerage commissions; any exchange fees incurred or costs related to trading in various
markets, such as filing, registration, licensing, taxes, surcharges and other trading and investment
related costs; costs and fees related to data feeds, software and systems used in the operations,
accounting, portfolio management and risk management; research and market data fees, data
feed for portfolio securities, data and software used for research (and any exchange fees related
thereto), travel expenses (including transportation, lodging and meals) relating to investment
research and due diligence on Fund Managers and other advisers; fees and expenses incurred
in connection with the risk management systems and processes (including software); fees and
expenses of proxy research and voting services legal and auditing fees and expenses;
accounting, fund administration, trade execution services and other service provider fees and
expenses; fees, compensation and expenses of Fund Managers of Investment Funds;
transactional fees; custodian and safekeeping fees and other custody fees and expenses; bank
service fees; interest in margin accounts; insurance or bonding premiums (including such
premiums with respect to the Adviser and/or any of their principals, partners and officers);
expenses incurred with respect to the preparation of annual reports and other financial and/or tax
information; management fees (if any); swap termination expenses; borrowing costs, including
leverage costs and investment related costs; withholding and transfer taxes; government charges;
bank charges; costs of preparing and mailing reports to investors, background checks, directors
fees, and other ongoing operational. Any or all of the expenses listed in this paragraph may be
expenses that are shared by multiple entities, which may include multiple Partnerships or Funds
as well as ABS. When an expense is allocated across multiple entities, ABS endeavors to make
the allocation in an equitable manner, as determined by ABS in its sole judgment, and pursuant
to any guidelines or restrictions, to the extent applicable, set forth in the offering documents of the
Fund(s) to which the expense is being allocated. The Partnership, Funds and Managed Accounts
will generally bear expenses in connection with their investment activities, to the extent applicable,
which may include custodial fees and transactional costs. Please see Item 12 below for a more
detailed discussion of brokerage expenses and practices. The Adviser may waive its
management fee and/or reimburse expenses to limit total annual operating expenses for certain
portfolios.

Further, a Client portfolio may be subject to an incentive fee for its investment in a particular
Investment Fund even though the portfolio may have experienced a net loss with respect to the
portfolio’s aggregate investments in Investment Funds generally.

Item 7 – Types of Clients
The Adviser generally provides advisory services to the RIC, Mutual Fund, CIT, Managed
Accounts, Partnerships and Funds. The RIC, CIT, Partnerships and Funds will be comprised of
investors who range between “accredited investors” as that term is defined in Rule 501 of
Regulation D of the Securities Act of 1933, as amended and “qualified purchasers” pursuant to
Section 2(a)(51) of the Investment Company Act. The limited partners of the Partnerships, the
Fund investors and the Managed Accounts will consist primarily of banks or thrift organizations,
corporate and public pension plans, endowments, foundations, high net worth individuals or other
business entities not listed above. The Adviser or its owners generally maintain an investment in
the Partnerships and/or the Funds

The Funds, Partnerships, Managed Accounts, Mutual Fund and RIC are generally subject to
minimum investment requirements ranging from $100,000 to $100,000,000, although in certain
instances such minimums can be waived at the sole discretion of the Adviser.

Any Fund or Partnership investor or Managed Account owner subject to a performance fee must
also be a “qualified client” as defined by Section 205 of the Advisers Act. While “qualified
purchasers” (as defined above) are presumed to also meet the “qualified client” standard,
“accredited investors” (as defined above) may or may not also meet the definition of “qualified
client.”