Brightstone Capital Management LLC

Item 5: Fees and Compensation

Brightstone charges a Management Fee equal to 1.00% per annum of the Investment Account
Assets net liquidation value. The Management fee is calculated based on an annualized percentage
of one per percent (1.00%) of net liquidation value calculated monthly as 1/12th of 1.00% and paid
monthly in arrears as of the last day of the calendar month. The computation of the Management
Fee is to be made as of the end of each calendar month and one hundred percent (100%) of the

Management Fee shall be paid immediately thereafter. A pro rata Management Fee is charged to
Clients on any amounts permitted to be invested or withdrawn during any calendar month. The
Management Fee is automatically charged to the Client's account by the Custodian, provided that
the Client has signed and returned written Client authorization, as soon as practicable following
the end of each applicable period.

The Custodian delivers an account statement to the Client at least quarterly, showing all
disbursements, including advisory fees, deducted from the account. The Client is encouraged to
review all account statements for accuracy. It is the responsibility of the Client and not the
Custodian to ensure the fees are calculated correctly.

The average daily balance is calculated by taking the sum of a Client’s account balance at the end
of each day of the billing cycle divided by the number of days in the billing cycle. Brightstone
maintains and/or has access to, a record of a Client’s account balance for each day in the billing
cycle. These fees are generally negotiable and the final fee schedule is attached as Exhibit II of the
IAC.

Item 6: Performance-Based Fee

Brightstone does not charge Clients a performance-based incentive fee.

Item 7: Types of Clients

Brightstone generally provides advisory services to the following types of Clients:

           ❖   High-Net-Worth Individuals
           ❖   Individuals
           ❖   Institutional Clients
           ❖   Corporations or Other Businesses
           ❖   Insurance Companies

The minimum account size that shall be accepted by Brightstone is two hundred and fifty thousand
U.S. dollars (USD $250,000) and the Client may add to or withdraw funds from its investment
account in increments of twenty-five thousand U.S. dollars (USD $25,000) at any time, with no
minimum subsequent investment amount. Brightstone can waive the minimum account size in its
sole discretion.

Item 8: Method of Analysis, Investment Strategies, and Risk of Loss

Brightstone’s core strategy involves the construction of a “Smart Beta Portfolio” on behalf of its
Clients. This is accomplished through strategically timed investments in exchange traded funds
(ETFs). Leverage is used sparingly and from time-to-time options spreads are used to hedge
positions. Brightstone looks to identify times when the broad market is undervalued and the

potential for upward moves is greater than normal. Various macro and technical indicators are
used set to manage entry and exits from portfolio positions.

Accuracy of Public Information Risk. Brightstone selects investments, in part, on the basis of
information and data filed by issuers with various government regulators or made publicly
available by the issuers or through sources other than the issuers. Although Brightstone evaluates
this information and data and ordinarily seeks independent corroboration as appropriate and
reasonably available, Brightstone is not in a position to confirm the completeness, genuineness or
accuracy of such information and data, and in some cases, complete and accurate information is
not available.

Short Selling. Brightstone’s investment strategy will involve seeking to profit from securities
believed to be overvalued by entering into short sale positions, both directly and indirectly through
the use options, ETFs, and other trading instruments. When Brightstone effects a short sale in a
Client’s account, the Client may be obligated to leave the proceeds thereof with the custodian and
also deposit with the custodian an amount of cash or other securities that is sufficient under any
applicable margin or similar regulations to collateralize its obligation to replace the borrowed
securities that have been sold. Short selling involves selling securities which are not owned by the
short seller and borrowing them for delivery to the purchaser, with an obligation to replace the
borrowed securities. Short selling allows the Client to profit from a decline in market price to the
extent such decline exceeds the transaction costs and the costs of borrowing the securities. In
certain cases, a short sale creates the risk of a theoretically unlimited loss, in that the price of the
underlying security could theoretically increase without limit, thus increasing the cost to the Client
of buying those securities to cover the short position. There can be no assurance that the Client
will be able to maintain the ability to borrow securities. In such cases, the Client can be “bought
in” (i.e., forced to repurchase securities in the open market to return to the lender). There also can
be no assurance that the securities necessary to cover a short position will be available for purchase
at or near prices quoted in the market. Purchasing securities to close out a short position can itself
cause the price of the securities to rise further, thereby exacerbating the loss. Any gain resulting
from a short sale will be decreased (and any loss will be increased) by the transaction costs incurred
in connection with the short sale.

Leverage and Financing Risk. Brightstone believes that the use of leverage may enable the Client
to achieve a higher rate of return. While leverage presents opportunities for increasing the Client’s
total return, it has the effect of potentially increasing losses as well. Accordingly, any event which
adversely affects the value of an investment by the Client would be magnified to the extent the
Client is leveraged. The cumulative effect of the use of leverage by Brightstone in a Client’s
account in a market that moves adversely to the Client’s investments could result in a substantial
loss to the Client which would be greater than if the Client were not leveraged. The use of leverage
may create interest expenses for the Client, which can exceed the investment return from the
borrowed funds. To the extent the investment return derived from securities purchased with
borrowed funds exceeds the interest the Client will have to pay, the Client’s investment return will
be greater than if leverage were not used. Conversely, if the investment returns from the assets

acquired with borrowed funds is not sufficient to cover the cost of leveraging, the investment return
of the Client will be less than if leverage were not used.

In general, the anticipated use of short-term margin borrowings results in certain additional risks
to the Client. For example, should the securities pledged to brokers to secure the Client’s margin
accounts decline in value, the Client could be subject to a “margin call,” pursuant to which the
Client must either deposit additional funds or securities with the broker, or suffer mandatory
liquidation of the pledged Securities to compensate for the decline in value, which could result in
substantial losses. In the event of a sudden drop in the value of the Client’s assets, the Client might
not be able to liquidate assets quickly enough to satisfy its margin requirements.

Uninvested Assets. Assets not invested in securities or deposited as margin or paid as premiums
generally will be invested in money market instruments, including, without limitation, Treasury
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