Crown Advisors Management Inc

Item 5. Fees and Compensation

Crown charges the Fund an annual fee of 1.0% of assets under management, which amount is
payable in quarterly installments at the end of each calendar quarter based on the net market value

                                   Crown Advisors Management, Inc.

of the Funds’ account on the date the fee accrues and becomes payable. Crown is also allocated
from each investor of the Fund a performance allocation equal to 20% of the net profits (including
both realized and unrealized gains and losses) otherwise allocable to such investor. Performance
allocations are assessed in arrears on an annual basis and are only applied to the portion of profits
that exceed the cumulative losses previously allocated to the Fund. Crown complies with Rule
205-3 under the Investment Advisers Act of 1940, to the extent required by applicable law.
Performance allocations may create an incentive for Crown to make more risky and speculative
investments than it would otherwise make.

Crown deducts management fees and performance allocations directly from the Fund. Some
investors in the Fund are family and related accounts; they are charged fees.

Accounts that invest in mutual funds also pay, indirectly, investment advisory fees to the managers
of those funds. Crown believes that its fees are competitive with fees charged by other investment
advisers for comparable services. Comparable services may be available, however, from other
sources for lower fees.

The disclosure in this Item 5, together with the disclosure in Item 12, allow a plan that is subject
to the Employee Retirement Income Security Act of 1974 and that invests in an investment limited
partnership of which Crown is general partner, to use the “alternative reporting option” to report
Crown’s compensation as “eligible indirect compensation” on the Schedule C of the plan’s Form
5500 Annual Return/Report of Employee Benefit Plan.

Relationships with Crown’s clients are terminable on the expiration or earlier termination of the
applicable Fund document and, with respect to the Fund, the dissolution of the Fund or Crown’s
withdrawal as general partner of the Fund. Each limited partner of the Fund may withdraw from
the Fund on specified prior written notice on the last business day of any calendar quarter in
accordance with the terms of the Fund documents.

In all cases, expenses, the pro rata portion of the management fee, and the performance allocation
through the date of termination are charged to the account. However, an investor who withdraws
from the Fund on a date other than the last business day of a quarter (if so permitted by Crown)
does not receive a refund of the management fee previously paid.

Each account is responsible for its own costs and expenses, including trading costs and expenses
(such as brokerage commissions, expenses related to short sales, and clearing and settlement
charges), ongoing legal, the fees and expenses charged by any fund administrator for its
accounting, bookkeeping and other services. Crown bears its own operating, general,
administrative and overhead costs and expenses, other than the expenses described above. All or
part of these costs and expenses may be paid, however, by securities brokerage firms that execute
clients’ securities trades, as discussed in Item 12 below.

                                   Crown Advisors Management, Inc.

Item 7. Types of Clients

Crown provides investment advice to the Fund. Investors in the Fund must be accredited investors
and “qualified clients.” Investors in the Fund must have a net worth of at least $2,100,000 and are
required to invest a minimum of $200,000. Crown may waive this minimum investment amount
at its discretion.