Echinus Advisors LLC

ITEM 5: FEES AND COMPENSATION

        The offering documents for the Funds set forth the specific fees and other material terms
regarding an investment in the Funds. The Funds offer interests or shares (depending upon the
fund) in various classes, each with different management fees, performance allocations and lock-
ups.
        All investors in the Domestic Fund and Offshore Fund generally pay a non-refundable
management fee to Echinus Advisors which ranges by class of interests or shares from one (1%)
percent to two (2%) percent per annum. The management fee for the Domestic Fund and Offshore
Fund is charged on a pro-rated monthly basis, in advance, based on the net assets attributable to
each of the investors. Investors pay the management fee on the first day of each month. No portion
of the management fee is refundable if an investor withdraws during a month. Investors are not
charged any redemption fees. The Co-Investment Vehicles do not pay a management fee.

        Echinus Capital LLC receives annual performance-based allocations from each investor in
both the Domestic and Offshore Funds. This performance-based compensation is tracked and
payable at the Domestic Fund level with respect to all investors. Depending on the particular class
of shares or series of interests, performance-based allocations range from 12.5% to 20% of “new
appreciation,” i.e., increase in net asset value attributable to a particular investor in excess of any
high-water mark, with adjustments made for fees and expenses (including management fees). The
Co-Investment Vehicles pays Echinus Capital a performance-based allocation of 10% of “new
appreciation,” i.e., increase in net asset value attributable to a particular investor in excess of any
high-water mark, with adjustments made for fees and expenses. This performance-based allocation
is more fully described in Item 6: Performance-Based Fees and Side-by-Side Management.

      Neither the management fee nor the performance-based allocation is negotiable, but
Echinus Advisors or Echinus Capital, as applicable, has the sole discretion to waive or reduce any
compensation it is entitled to receive with respect to any investor.

        Through the Funds, each investor indirectly pays for its share of all costs and expenses directly
related to investment transactions, including brokerage commissions, borrowing charges on
securities sold short, interest on margin accounts, custodial fees, database subscriptions and
investment data, legal, accounting and audit fees and expenses, tax-preparation fees, governmental
fees and taxes, bookkeeping and other professional fees, printing and mailing expenses,
syndication and other expenses of the continuing offering of the Interests, costs of fund reporting,
costs of fund governance activities (such as obtaining Partner consents if and when necessary and
appropriate), costs and expenses associated with negotiating and entering into contracts and

arrangements in the ordinary course of the fund’s business, costs and expenses of third party
administrators retained for fund purposes, costs and premiums of any fidelity and performance
bonds and general partner liability and errors and omission insurance coverage obtained in Echinus
Capital’s discretion, extraordinary expenses of the fund, such as litigation costs, and all other
reasonable expenses related to the operation of the fund and/or the purchase, sale or transmittal of
fund assets, as Echinus Capital determines in its sole discretion. Investors in the Offshore Fund
bear their pro rata share of expenses relating to the operation and administration of that fund.
Investors in the Co-Investment Vehicles are also responsible for all organizational and initial
offering costs of the Co-Investment Vehicles, in addition to all the costs stated above. All
respective fund expenses are outlined in more detail in each fund’s governing documents.

       Neither Echinus Advisors nor its principals, executive officers or employees accept
commissions or other compensation for the sale of shares or interests in the Funds or in connection
with the purchase or sale of any securities for the Funds.

ITEM 7: TYPES OF CLIENTS

        Echinus Advisors provides portfolio advisory and management services solely to the Funds
based on their investment objectives and not based on the criteria or investment objectives of any
individual investor of the Funds. The Funds require newly admitted investors to be “accredited
investors” under Regulation D of the Securities Act and “qualified clients” under the Advisers Act.
Additionally, the Domestic and Offshore Funds each have a minimum investment requirement of
$5,000,000 for investors, although this minimum may be waived or reduced as provided in the
offering documents of each fund.

        Echinus Advisors also provides portfolio advisory and management services to the Co-
Investment Vehicles based on the specific trading mandate to invest in a limited number of
positions that are also in the Domestic Fund.

ITEM 8: METHOD OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

INVESTMENT STRATEGY

        Echinus Advisors utilizes a strategy of opportunistic “value” oriented investments in its
effort to maximize long-term absolute total returns, in variable market and economic conditions,
while also emphasizing preservation of capital. Echinus Advisors seeks to identify securities
which, due to market inefficiencies, trade at prices that are believed to be significantly mispriced
compared to their intrinsic value. Echinus Advisors typically has a significant long bias, though
it may use short positions in the Domestic and Offshore Funds to hedge against a specific identified
company risk or sector exposure.

         Echinus Advisors applies a private equity-oriented investment style by engaging in a
lengthy and exhaustive due diligence process culminating in concentrated, involved investments
over an extended period of time. The focus of the Funds is generally publicly-traded equities, but
the Domestic and Offshore Funds may also invest in other levels of a company’s capital structure
such as senior or subordinated debt, stock and index options, and other specified securities.

Echinus Advisors expects that over time it will concentrate the Funds’ investment activities on
mid- and small-cap stocks where it can best obtain an analytical edge.

        With respect to undervalued securities, the divergence of the price from fair value may
result from several factors, such as the company in question being in an out-of-favor industry;
having overlooked assets (such as net operating loss carryforwards, off-balance sheet assets, etc.);
being subject to a complex or unusual event or circumstance (such as a spin-off, financial
reorganization, etc.); being underfollowed by Wall Street; the financial markets failing to properly
value or understand the true earnings or cash generation of the company; fear-driven overselling
caused by uncertainties about a major event in the company’s future (such as a pending lawsuit,
an upcoming renegotiation of a large customer contract, etc.); or other reasons. Echinus Advisors
is flexible in shifting portfolio allocation in an effort to invest at attractive prices in misvalued
securities.

        Echinus Advisors operates with the fundamental principle that it must believe that it has
more thorough knowledge and/or deeper analysis of the Funds’ portfolio companies than reflected
in the market. Echinus Advisors therefore engages in proprietary fundamental research regarding
a broad range of companies it believes may be misunderstood or neglected by other securities
analysts and firms. This is a research-intensive, bottom-up approach that utilizes detailed analyses
of financial statements and other regulatory filings, valuation analyses, speaking with
management, customers and competitors, assessments of the company’s competitive position,
corporate governance, quality of management, and other information. Echinus Advisors seeks to
identify through its research untapped levers to create or enhance value, such as unrecognized
bargaining power over customers or suppliers, cost control, sub-optimal balance sheets or poor
capital allocation. Investment decisions are made using Echinus Advisors’ best judgment, based
on analysis and synthesis of all relevant information.

        In order to deploy the Funds’ capital to investments that Echinus Advisors believes offer
the most attractive opportunities for significant capital appreciation, the portfolio is typically
highly concentrated and not broadly diversified. The majority of the Domestic Fund’s portfolio is
typically invested in 5-10 “best idea” core positions that are believed to have the potential to rise
substantially in value. This means that Echinus Advisors will target investments that can generate
attractive compound annual returns over at least a 3 to 5-year timeframe. Although there are no
specific concentration limitations, the Investment Manager anticipates that generally no single
investment position will be initiated that will exceed 25% or be less than 4% of the Fund’s total
value (other than in limited circumstances such as where the Fund is in the process of acquiring or
exiting the position). The Co-Investment Vehicles’ investment mandate is to invest in a very
limited number of concentrated positions that are held in the Domestic Fund to allow certain
investors to gain additional exposure to certain positions.

      The Domestic Fund utilizes margin leverage with respect to its investment activities when
deemed appropriate by Echinus Advisors. The Co-Investment Vehicles do not utilize leverage.

       An investment in the Funds is subject to various risks, including the risk of loss, that all
investors should be prepared to bear.

RISK RELATING TO INVESTMENT STRATEGY AND TECHNIQUE

        Investing in the Funds involves a substantial degree of risk for the investor and is suitable
only for persons having substantial financial resources who understand the long-term nature, the
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