Applied Fundamental Research LLC

Fees and Compensation

                                                                                                Form ADV Part 2A, Item 5
A. Advisory Fees.

For AFR VP, AFR will receive a quarterly management fee (the “Management Fee”) at a fixed rate of 0.3125%
(1.25% per annum). AFR VP GP, LLC, the General Partner of AFR VP, is entitled to receive a performance
allocation from AFR VP at the end of each calendar year (the “Performance Allocation”). At the end of each fiscal
year, subject to the recovery of net losses allocated to the loss recovery account (as described below), the
General Partner will receive an allocation from the capital account of each limited partner in AFR VP (after
reduction for expenses and fees incurred by AFR VP) equal to 20% of the Net Increase for such fiscal year. The
“Net Increase” of a capital account shall mean the excess realized and unrealized net profits over realized and
unrealized net losses allocated to such capital account for such fiscal year (or other fiscal period, if applicable)
prior to giving effect to any Performance Allocation. In the event that there is any net depreciation allocated to
such Limited Partner’s Capital Account and carried forward from any prior year, the Performance Allocation shall
be reduced to 10% of the portion of each Limited Partner’s pro-rata share of the net realized and unrealized
appreciation in the value of the assets of AFR VP for such calendar year and each calendar year thereafter until
such time as there no longer exists any net depreciation allocated to such Limited Partner’s Capital Account
carried forward from any prior year. AFR VP will maintain a loss recovery account (sometimes referred to as a
“high water mark”) that corresponds to the capital account of each limited partner to calculate whether the General
Partner will be entitled to receive such a Performance Allocation. If an investor withdraws capital from AFR VP,
the amount of such investor’s high-water mark, if any, will be reduced in proportion to the amount of capital
withdrawn.

For AFR CV, AFR will receive a quarterly management fee (the “Management Fee”) at a fixed rate of 0.3125%
(1.25% per annum). AFR CV GP, LLC, the General Partner of AFR CV, is entitled to receive a performance
allocation from AFR CV at the end of each calendar year (the “Performance Allocation”) equal to 20% of the
portion of each Limited Partner’s pro-rata share of the net realized and unrealized appreciation in the value of
the assets of AFR CV for such calendar year that exceeds 105% of such Limited Partner’s Capital Account
balance as of December 31 of the prior year, or, if later in time, the Limited Partner’s Capital Account balance on
the date of their initial investment in the Fund (in such instance, the 105% hurdle rate shall be multiplied by a
fraction, the numerator if which is the days in the Performance Period in which an investment in the partnership
existed, and the denominator if which is 365); Provided, however, in the event that there is any net depreciation
allocated to such Limited Partner’s Capital Account and carried forward from any prior year, then the Performance
Allocation shall be reduced to 10% of the portion of each Limited Partner’s pro-rata share of the net realized and
unrealized appreciation in the value of the assets of the Fund for such calendar year and each calendar year
thereafter until such time as there no longer exists any net depreciation allocated to such Limited Partner’s Capital
Account carried forward from any prior year.

The Performance Allocation will also be calculated and payable as of the date of withdrawal with respect to any
capital that is withdrawn as of the end of any calendar quarter other than the end of a calendar year (and in such
instance, the 105% hurdle rate shall be multiplied by a fraction, the numerator if which is the days in the
Performance Period in which the withdrawn capital was an investment in the partnership, and the denominator if
which is 365). Any loss-carryforward will be adjusted fairly and equitably in proportion to withdrawals by a Limited
Partner.

In connection with its separately managed accounts, AFR may receive a management fee up to 2% of the assets
in each managed account plus a performance fee equal to a percentage of the net profits on the assets under its
management, as set forth in each managed account advisory agreement. This performance fee is generally 20%
of net profits.

Although AFR has entered into agreements providing for the fees or allocations described herein, AFR may
negotiate alternative fees or allocations on a client-by-client basis with other funds or separate account clients
that it manages in the future. The General Partners of the Funds also retain the ability to, in their sole discretion,
waive, reduce or rebate the Management Fee and/or Performance Allocation with respect to certain limited
partners of the Funds, including affiliates of the General Partners and/or AFR; provided, however, that no such
waiver, reduction or rebate will adversely impact any other limited partner in the Funds or cause them to bear a

higher portion of the Management Fee and/or Performance Allocation than they would otherwise bear absent
such waiver, reduction or rebate.

In cases where AFR acts as a sub-adviser, either directly or through an investment advisory client or a third-party
platform, the fees are generally negotiated between the parties and are based on a percentage of the relative
assets under management.

B. Payment of Fees

AFR deducts its Management Fee from the assets of the Funds quarterly in arrears. AFR deducts its Performance
Allocation from the assets of the Funds annually in arrears.

AFR does not deduct fees from its separately managed account clients’ assets. AFR’s management fee is
payable quarterly in arrears, and any performance fee is payable annually in arrears.

C. Additional Fees and Expenses
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Types of Clients

                                                                                               Form ADV Part 2A, Item 7

AFR currently provides investment advisory services to the Funds and may from time to time provide such
services to separately managed accounts held by high-net-worth individuals, trusts, estates, charitable
organizations, pension plans, corporations, limited partnerships, limited liability companies, and similar entities.

Investment advice is provided directly to the Funds, subject to the discretion and control of the General Partners
and not individually to the investors in the Funds. Interests in the Funds are offered pursuant to applicable
exemptions from registration under the Investment Company Act of 1940 and the Securities Act of 1933.
Investors in the Funds may include, but are not limited to, high net worth individuals, family offices, fund of hedge
funds, endowments, foundations, trusts, estates, charitable organizations, pension plans, limited partnerships,
limited liability companies and similar entities.

The minimum initial investment in both AFR VP and AFR CV is $500,000. The General Partners, in their sole
discretion, may accept subscriptions of a lesser amount. The minimum initial investment for a separately
managed account is $1,000,000, provided that AFR may waive this limitation in its sole discretion.

                  Methods of Analysis, Investment Strategies and Risk of Loss

                                                                                                 Form ADV Part 2A, Item 8

A. Methods of Analysis and Investment Strategies

The Firm employs an opportunistic value investment strategy combined with rigorous fundamental due-
diligence to identify and analyze businesses whose securities or obligations are priced at a substantial discount
to AFR’s estimates of their intrinsic value. Investments will be made when AFR believes that securities hold a
compelling combination of margin of safety and potential return when compared to the risk associated with an
investment. AFR will seek to identify opportunities where prices reflect a clear margin of safety when compared
to their intrinsic value. Asset prices may deviate from fair value for a host of reasons, including forced selling as
a result of institutional restrictions, market illiquidity, uncertainty surrounding a change in a business or industry,
security conversions, restructurings, or other complexities or uncertainties.

AFR will invest its clients’ assets opportunistically in various securities and other financial instruments across
sectors, and asset classes with an emphasis on public markets. AFR may purchase or otherwise acquire
and/or sell for its clients, inter alia, equities, debt, bonds, private positions, preferred stocks, derivatives and
loans.

Investing in securities involves a high degree of investment risk, including the risk that the entire amount
invested may be lost, which risk clients should be prepared to bear. AFR will make investments using strategies
and financial techniques with significant risk characteristics. No guarantee is made that the client’s investment
objectives will be realized. Below is a list of potential investment risk factors that are reportable in this brochure.
There is no guarantee that this is a complete list of the risks, that AFR will be able to control investment risks
or that the risks will not aggregate in a manner adverse to the Firm’s clients.

B. Risk Factors

Investment and Trading Risks: Investment in securities involves a high degree of risk, including the risk that
the entire amount invested may be lost. No guarantee or representation is made that AFR’s investment
program will be successful. AFR will be investing substantially all of its clients’ assets in securities, some of
which may be particularly sensitive to economic, market, industry and other variable conditions. The markets in
which AFR expects to invest have in recent years experienced significant volatility and losses. No assurance
can be given as to when or whether adverse events might occur that could cause immediate and significant
losses to a client’s account.

Undervalued Securities: AFR’s investment strategy focuses on investing in companies or instruments that it
believes are undervalued. Opportunities in undervalued securities arise from market inefficiencies or due to a
lack of wide recognition of the potential impact (positive or negative) that specific events or trends may have on
the value of a security. The identification of investment opportunities in undervalued securities is a difficult task,
and there is no assurance that such opportunities will be successfully
recognized or acquired. While investments in undervalued securities offer opportunities for above average
capital appreciation, these investments involve a high degree of financial risk and can result in
substantial losses.

Investments in High Yield and Distressed Securities: AFR may invest in “below investment grade”
securities and obligations of domestic and non-U.S. issuers in weak financial condition, experiencing poor
operating results, having substantial capital needs or negative net worth, facing special competitive or product
obsolescence or other problems, including companies involved in bankruptcy or other reorganization and
liquidation proceedings. These securities are likely to be particularly risky investments although they also may
offer the potential for correspondingly high returns. Some of these securities may not be publicly traded, and it
therefore may be difficult to obtain information as to the true condition of such issuers or to buy or sell these
securities. Additionally, in certain periods, there may be little or no liquidity in markets for these securities. The
public market prices of distressed securities may be subject to abrupt and erratic market movements and above
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