III Capital Management

ITEM 5. FEES AND COMPENSATION

Management and Performance Fees
In its role as discretionary investment adviser, III receives fixed management fees and, in most
cases, a share of the net profits of the Funds in the form of an incentive fee or incentive allocation.
For each Fund, III’s fee structure is as follows:

   1. III Credit Opportunities Fund L.P., III Credit Opportunities Fund Ltd. (the “COP
       Funds”). The Funds invest all of their assets into the III Credit Opportunities Hub Fund
       Ltd. (the “Hub Fund”), which conducts investment and trading act receives a management
       fee from the COP Funds equal to 0.0625% of the funds’ month-end net assets (a 0.75%
       annual rate) after reduction for the hub fund-level charges but prior to reduction for fees
       and expenses for the month. The management fee is accrued monthly and paid quarterly
       and upon redemption. The fund also pays an annual incentive fee of 10% of any cumulative
       New Profit (as defined in the offering documents) attributable to such shares. Any loss
       carryforward from prior periods must be recouped before New Profit with respect to such
       shares can be generated.

   2. III Multi-Strategy Fund L.P. (the “III MSP Fund”). III receives a management fee from
       the III MSP Fund equal to .125% of the fund’s net asset value after reduction for the hub
       fund-level charges but prior to reduction for fees and expenses for the month. The
       management fee is accrued monthly and paid quarterly and upon redemption. The fund
       also pays an annual incentive fee of 20% of any cumulative New Profit (as defined in the
       offering documents) that exceeds an annually resetting hurdle based on the interest rate of
       the 3-month US T-bill, attributable to such shares. Any loss carryforward from prior
       periods must be recouped before New Profit with respect to such shares can be generated.

Managed Accounts and SIFs
As noted above, III also provides investment advisory services to Managed Accounts and SIFs.
III typically exercises investment discretion with respect to these Clients. In most cases, III
charges management fees to these Clients. SIF fees vary but are generally in line with fees paid by
the Funds listed above relevant to such strategy. That is, SIFs in Long-Only Credit pay fees similar

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to the COP Funds. Managed Accounts are primarily in Long-Only Credit and pay fees similar to
the COP Funds, although fees are lower for some Managed Accounts that focus on higher-rated
securities. SIFs in Rates, L/S Credit, EMN and Convexity generally pay a management fee of up
to 0.125% of the month-end net assets (a 1.5% annual rate) accrued monthly that is paid quarterly;
some SIFs pay lower management fees or even zero management fee, typically in exchange for a
higher incentive fee (or performance-based compensation). Incentive fees for SIFs in Rates and
Convexity vary, but are typically in the 15% to 20% range per annum of the cumulative profit after
expenses and any loss carryforward attributable to the SIF shares. and in certain cases over a hurdle
rate. In a few cases, III only receives performance-based compensation with a minimum “floor”
that acts like a management fee if performance does not generate fees in excess of the “floor.”
Such compensation is designed to comply with Rule 205-3 under the Advisers Act, and, where
applicable, relevant provisions of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”).

Intangible Benefits

The Adviser and its personnel can be expected to receive certain intangible and/or other benefits
and/or perquisites arising or resulting from their activities on behalf of Clients that will neither be
subject to an offset against any Management Fees payable by the Clients nor will otherwise be
shared with the Clients or investors. For example, airline travel or hotel stays incurred as Client
or account expenses typically result in cash rebates, “miles,” credit card “points” or credit in
loyalty/status programs, and such benefits and/or amounts will, whether or not de minimis or
difficult to value, inure exclusively to the Adviser and/or such personnel (and not Clients or their
investors) even though the cost of the underlying service is borne by Clients.

Method of Payment of Fees

All fees or allocations received by III from the Funds and certain SIFs are deducted directly by the
Administrator, who in turn pays III. Certain separately managed accounts are provided an invoice
reflecting the amount of management fees for the period. Management fees are paid quarterly or
monthly, as applicable for the particular Client and, in all cases, after the service is provided and
upon redemption. Incentive fees, calculated for each Client as described above, are paid and profit
is allocated annually. Clients never need to obtain a refund of management fees because fees are
not pre-paid and III receives fees only after services are provided. Advisory fees and management
and incentive fees billed to Managed Account Clients are individually negotiated, and the timing
of the payment of such fees is generally the same as for the Funds and SIFs.

Fund Operating Expenses

The Funds pay for their routine legal, regulatory (including out-of-pocket costs of preparing
regulatory filings relating to the Fund), accounting, audit, certain pricing and valuation services,
printing and mailing costs, investor reporting, computer costs, offshore administration fees,
...

ITEM 7. TYPES OF CLIENTS

III provides discretionary investment advice to Clients that are large sophisticated institutional
investors including corporations, sovereign wealth funds, charitable foundations, endowments and
pension funds. For Funds whose interests are offered to U.S. persons, each U.S. investor at a
minimum must be an “accredited investor” under Regulation D of the Securities Act of 1933 and
a “qualified client” under Rule 205-3 under the Advisers Act. In addition, for those Funds that are
offered to U.S. persons and are operated pursuant to Section 3(c)(7) of the Investment Company
Act, U.S. investors must also be “qualified purchasers” as that term is defined under Section
2(a)(51) of the Investment Company Act. Minimum investment varies by Fund and applies
regardless of whether the investor is a U.S. or non-U.S. Person; typically, the minimum Fund
investment is $1,000,000.00. Similarly, the minimum investment for SIFs or Managed Accounts
varies based on investment strategy, complexity and other factors and applies regardless of whether
the investor is a U.S. or non-U.S. Person. Typically, the minimum SIF or Managed Account
investment is $50,000,000.00. III and its affiliates reserve the right to waive the minimum amount
for investors in Funds or entities opening SIFs or Managed Accounts.