FCO Advisors LP

Item 5 – Fees and Compensation

FCO typically receives compensation from its clients from the following sources: (a) fees based on
a percentage of assets under management; and (b) fees or allocations based on a percentage of the
performance of the client accounts. Fees for managed account clients are negotiable. Current and
prospective clients should carefully review all fees charged by FCO. Different fees are charged to
different clients and investors, and fees can be waived, rebated or reduced for certain clients and
Investors, including for certain affiliates, principals and employees.

Management Fee:

In consideration for its services to the funds, FCO is entitled to a management fee measured as a
percentage of net assets of the fund. Generally, the management fee is paid quarterly in advance.

Performance based Compensation:

Subject to certain terms and limitations disclosed in the Governing Documents, FCO is entitled to
receive performance based compensation (the “Incentive Allocation”) with respect to the funds in an
amount equal to a percentage of the net capital appreciation attributable to each Investor’s capital
account in the fund (after taking into account expenses of the fund, including any Management Fees).
The Incentive Allocation is generally payable annually after year‐end or at the time the Investor
withdraws from the fund if before year‐end. The Incentive Allocation will be calculated on the basis
of the aggregate balance in an Investor’s capital account, irrespective of how many or when capital
contributions are made to such capital account by such Investor.

An Incentive Allocation can also be subject to what is commonly known as a “high water mark.”
That is, if a capital account underperforms during a calendar year, the net underperformance will be
recorded and carried forward to future calendar years (such amount is referred to as the “Loss
Carryforward”), and FCO will not receive the Incentive Allocation with respect to such capital
account for future calendar years until the Loss Carryforward amount has been recovered (i.e., when
the Loss Carryforward amount has been exceeded by the cumulative net outperformance in the
calendar years following the Loss Carryforward). Once the Loss Carryforward has been recovered,
the Incentive Allocation shall be based on the excess net capital appreciation over the Loss
Carryforward amount, rather than on all net capital appreciation. The “high water mark” procedure
prevents FCO from receiving the Incentive Allocation for net capital appreciation that simply restores
previous underperformance and is intended to ensure that the Incentive Allocation is based on the
long-term performance of the fund.

Separate account clients can also be subject to the Management Fee and performance-based
compensation similar to those described above. The level of compensation can vary by client, based

on a client’s investment objectives and limitations.

Except as provided herein or the constituent Governing Documents, FCO renders its services to the
Clients at its own expense and is responsible for its overhead expenses including: office rent; utilities;
furniture and fixtures; stationery; secretarial/internal administrative services; salaries and bonuses;
entertainment expenses; employee insurance and payroll taxes.

Other Expenses Charged to the Clients:

Each fund client typically bears all costs and expenses (subject to a cap where applicable), other
than fees paid to placement agents, incurred in connection with the formation and organization
(such costs and expenses, the “Organizational Costs”) of the fund client as well as its pro rata share
of the Organizational Costs of master funds. Such Organizational Costs are typically amortized over
the first 60 months of the fund’s operations. The Advisor typically bears the costs of any fees paid
to placement agents either directly or through an offset to the management fee.

Each fund client typically pays all ordinary and extraordinary expenses (subject to a cap where
applicable) incurred by it or on its behalf, which may include, but are not limited to, the management
fee, investment related expenses (i.e., expenses that the Advisor reasonably determines to be related
to the acquisition, holding and disposition of the fund client’s assets, such as due diligence
expenses, consultant expenses, brokerage fees and commissions, expenses relating to short sales,
clearing and settlement charges, pricing and valuation fees, custodial fees, bank service fees, interest
expenses, taxes and expenses related to proposed investments that are not consummated), research
fees and expenses (including publications and quotation services), data feed expenses, risk and office
management software fees, investment-related travel expenses, insurance expenses, legal expenses,
regulatory expenses (including expenses related to Form PF and Form CPO PQR), professional fees
(including, without limitation, expenses of consultants and experts) relating to investments, internal
and external accounting expenses (including the cost of accounting software packages), auditing,
reporting and tax preparation expenses, administrative expenses, expenses relating to maintaining
the registered offices of the fund client’s general partner and master fund in the Cayman Islands (if
applicable), third-party administrative fees, fees and expenses of service providers retained by the
fund client or the Advisor and other similar expenses related to the fund client. To the extent that
expenses to be borne by the fund client are paid by FCO or its affiliates, the fund client reimburses
FCO or its affiliates for such expenses. Refer to Item 12 – Brokerage Practices for further information
regarding brokerage practices.

Fees and expenses are allocated to clients in accordance with the expense allocation policies and
procedures adopted by the Advisor. Such general expense allocation policies and procedures are
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Item 7 – Types of Clients

FCO currently advises privately offered pooled investment vehicles.

FCO also accepts investment mandates from institutional clients in a form of separately managed
accounts. Generally, FCO will enter into (and in the past has entered into) separate account
arrangements solely with clients that are: (a) “accredited investors” as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended; (b) a “qualified
eligible person” as defined in Commodity Futures Trading Commission Rule 4.7 promulgated under
the Commodity Exchange Act, as amended and (c) a “qualified purchaser” as defined under Section
2(a)(51) of the Investment Company Act of 1940, as amended.

FCO also sub-advises an account for a registered investment company.