Blue Chip Finance LLC

Item 5 – Fees and Compensation
Basic fee schedule:

Adviser typically receives an annual management fee, between 0 .70% to 1.50% of the net asset
value of the Account for Non-Discretionary Accounts and Discretionary Accounts. Adviser may
enter into flat fee arrangements from time to time, typically for administrative services provided to
clients or client Accounts. Adviser may also provide sub-advisory and administrative services for a
flat fee based upon actual cost, which is outlined and established via sub-advisory/administrative
services agreement. All fees are negotiable.

The specific manner in which fees are charged by Adviser is established in each client’s written
agreement with Adviser. Generally, and pursuant to contract, fees for the management of Accounts
will be based upon a percentage of the total assets in the account (including margined assets).

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   Basic Fee Schedule (Discretionary & Non-Discretionary)
                                                  AUM
             Account Value                   Fee Percentage
            Over $10,000,001                     0.70%
       $5,000,001 to $10,000,000                 0.85%
        $1,000,001 to $5,000,000                 1.00%
         $250,001 to $1,000,000                  1.50%

Other Fees:

Fixed Fees

BCF may also provide Advisory and Portfolio Management Services to Institutional Clients. In
some cases, these clients are required to pay only fixed fees to third party Advisers, such as BCF.
Fixed fees may or may not have a correlation with the clients’ Assets Under Management (AUM)
by BCF. Fees for these Clients are based on the scope of each project and discussed with and
approved by the client in writing prior to the commencement of advisory activities by BCF.

Hourly Fees

Certain advisory services may be billed at an hourly rate, at the request of the client. An Hourly Fee
Schedule will be provided to the client prior to the engagement. The standard Hourly Fee is $250.00
/hr.

Performance Fees

BCF may charge a Performance Fee, in addition to Management Fees, to certain Qualified Clients
as defined in SEC Rule 205-3. This fee will be a percentage of any gains in the client account
during that period, to be determined with each specific client but never to surpass 20% of the
performance per quarter.

Accounts that Blue Chip Finance LLC currently manages may charge both a performance based fee
and a management fee. Because not all accounts are charged consistently, the performance-based
fee arrangements may create an incentive for Blue Chip Finance LLC to favor certain accounts over
other accounts. Performance based fee arrangements may create an incentive for Blue Chip Finance
LLC to recommend investments which may be riskier or more speculative than those which would
be recommended under a different fee arrangement. Such fee arrangements may also create an
incentive to favor higher fee-paying accounts over other accounts in the allocation of investment
opportunities. Blue Chip Finance LLC has procedures designed and implemented to ensure that all
clients are treated fairly and equally, and to prevent this conflict from influencing the allocation of
investment opportunities among clients.

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Calculation and Deduction of Advisory Fees

With respect to accounts that Adviser manages on a discretionary basis, including the specialized
discretionary programs, clients are generally required to authorize Adviser to directly debit
management fees from client accounts quarterly. Fees for investment advisory services and other
non-discretionary programs are billed to clients, although frequently clients pre-authorize their
custodians to automatically deduct the fees from the client’s account and to make payment to
Adviser. Management fees are deducted or billed, as applicable, quarterly.

A client may pay more or less fees than similar clients depending on the particular circumstances of
the client, size, additional or differing levels of servicing or as otherwise agreed with specific
clients. Clients that negotiate fees, including a flat fee, may end up paying a higher fee than that set
forth above as a result of fluctuations in the client’s assets under management and account
performance.

In the event the Adviser bills fees in advance, refunds are given on a prorated basis, based on the
number of days remaining in a quarter at the point of termination. The fee refunded will be the
balance of the fees collected in advance minus the daily rate* times the number of days in the
quarter up to and including the day of termination. (*The daily rate is calculated by dividing the
quarterly AUM fee by the number of days in the termination quarter). Clients may terminate their
contracts without penalty within 5 business days of signing the advisory contract. Advisory fees are
withdrawn directly from the client’s accounts with client written authorization.

Additional Fee Information

Clients may authorize the Adviser to directly debit management fees from client accounts on a
quarterly basis. In such instances, management fees are prorated for each contribution and
withdrawal made during the applicable calendar quarter. Accounts initiated or terminated during a
calendar quarter will be charged a prorated fee.

Alternatively, in some instances, clients may receive an invoice for fees, in which it may choose to
pay BCF directly for its billed fees for the relevant period.

Adviser’s fees are exclusive of brokerage commissions, transaction fees, and other related costs and
expenses which shall be incurred directly by the client. Clients may incur certain charges imposed
by custodians, brokers, and other third parties such as fees charged by fund managers, custodial
...

Item 7 - Types of Clients

BCF provides asset and/or portfolio management services to high net worth individuals,
corporations, institutions and other entities. The minimum dollar value for establishing an Account
is generally $1,000,000. Initial investments of a lesser amount may be accepted at Adviser’s
discretion.

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