IBS Capital LLC

Item 5 – Fees and Compensation

For each Fund, a 1.5% annual management fee is paid quarterly in arrears, in lieu of reimbursing
IBS for office space, utilities, administrative services, etc. IBS is allocated an annual
performance share equal to twenty percent of the appreciation credited to the accounts of the
investors subject to a high water mark. The management fee and any prior years' losses must be
earned back before a performance share may be earned. Management fees are deducted directly
from the capital accounts of the investors.

Each individual Fund bears its costs for research fees; interest on margin accounts; ongoing legal,
audit and accounting fees; borrowing charges for securities sold short; custodial fees; brokerage
commissions; bank service fees; interest on loans and debit balances; and any other reasonable
expenses related to the purchase, sale or transmittal of the Fund assets, as IBS shall determine in
its sole discretion. For more information on brokerage and transaction costs, refer to Item 12.

Item 7 – Types of Clients

IBS is the general partner of The IBS Turnaround Fund, L.P. and is solely responsible for making
all investment and related decisions for the fund. The IBS Turnaround Fund, L.P. is designed for
U.S. domiciled, “accredited” investors. IBS also manages a sister fund, The IBS Turnaround
Fund (QP) (A Limited Partnership), an identical fund designed for “Qualified Purchasers.” Both
funds pursue an identical strategy and hold virtually identical portfolios of investments.

As both Turnaround Funds aggressively focus on maximizing their after-tax returns, they are best
suited for taxable, U.S. domiciled investors. U.S. tax-exempt investors as well as offshore
investors may invest through an offshore sister fund, The IBS Opportunity Fund Ltd., a Bahamian
corporation. The Opportunity Fund pursues a similar investment strategy, but focuses on
maximizing its pre-tax return. Typically, the Opportunity Fund will hold many of the same
investments as The IBS Turnaround Funds, but does not maintain an identical portfolio.

The minimum investment is $1,000,000 for the Turnaround Funds and $500,000 for the
Opportunity Fund. Investments are subject to a one-year lockup. Types of investors include
individuals (must be “accredited” investors), family offices, corporations, investment funds and
trust, and institutional investors including endowments and foundations.