Intermarket Corporation

Item 5        Fees and Compensation
Management Fee
Intermarket receives a fixed annual management fee (the “Management Fee”) from each Fund with
respect to each Investor that differs from Fund to Fund as specified in each Fund’s confidential private
placement memorandum. Management Fees are payable quarterly in advance and are deducted from the
account of each Fund. A prorated Management Fee is charged with respect to any capital contributions
made other than as of the beginning of a quarter. Intermarket has in the past and may in the future, in its
sole discretion, reduce, waive or calculate differently the Management Fee with respect to any Investor,
including, without limitation, Investors that are affiliates or employees of Intermarket.
Incentive Amounts
Intermarket is entitled to receive a performance-based fee or allocation (“Incentive Amount”) from the
Funds. Generally, at the end of each fiscal year, 20% of the aggregate net profits, if any, attributable to
each Investor is reallocated or paid to Intermarket and/or certain of its affiliates, subject to a high-water
mark. If an Investor withdraws all or a portion of its investment from a Fund other than at the end of a
fiscal year, net profit and net loss will be determined through the withdrawal date as if such date were the
end of the fiscal year and an Incentive Amount, if any, with respect to the withdrawn amount will be
reallocated to Intermarket and/or certain of its affiliates as set forth above. Intermarket has in the past and
may in the future reduce, waive or calculate differently the Incentive Amount with respect to any
Investor, including, without limitation, Investors that are affiliates or employees of Intermarket.

  Intermarket Corporation is the general partner of Intermarket L.P., a New York limited partnership organized in 2004 that
serves as managing member to two Delaware private investment funds, Fernwood Associates LLC and Fernwood Foundation
Fund LLC.

  Intermarket Corporation is the general partner of Intermarket Management L.P., a Delaware limited partnership organized in
2000 that serves as investment manager to Fernwood Restructurings Limited, a private investment fund organized in the British
Virgin Islands.

At the end of each fiscal quarter, the domestic Funds may advance to Intermarket and/or certain of its
affiliates an amount estimated by Intermarket to be equal to the portion of the Incentive Amount, if any,
accrued during such fiscal quarter with respect to each Investor (an “Advance”); provided that the
Advance attributable to an Investor shall be net of net losses allocated to such Investor in an earlier fiscal
quarter during the same fiscal year. In the event that the aggregate Advances received during a fiscal year
exceed the Incentive Amount determined at the end of such fiscal year, Intermarket shall return such
excess amount. The Incentive Amount may create an incentive for Intermarket to cause the Fund to make
investments that are riskier or more speculative than would be the case in the absence of the Incentive
Amount.
Other Fees and Expenses
In addition to Management Fees and Incentive Amounts, Funds pay, and ultimately Investors bear, other
types of fees and expenses as specified in each Fund’s confidential private placement memorandum.
Typically, a Fund is responsible for all costs and expenses in connection with its operation and
investments (e.g., expenses which Intermarket determines to be related to the investment of the Fund’s
capital, such as brokerage commissions, clearing and settlement charges, bank service fees, interest
expenses, custodial fees, expenses relating to consultants, attorneys, brokers or other professionals or
advisers who provide research, advice or due diligence services with regard to investments, appraisal fees
and expenses, and investment banking expenses), legal expenses, internal and external accounting
expenses, auditing and tax preparation expenses, custodial and prime brokerage expenses, fees and
expenses of the administrator, fees and out-of-pocket expenses of any service company retained to
provide fund accounting, bookkeeping and administrative services and extraordinary and nonrecurring
expenses.
Each Fund pays a nominal custodian fee and receives transaction charges in relation to its investments.
The Funds are subject to brokerage and other transaction costs. Brokerage is described in more detail
below in response to Item 12.

Item 7          Types of Clients
Intermarket’s only clients are the Funds, which are pooled investment vehicles organized within or
outside the United States that are not required to be registered with the SEC under the Investment
Company Act of 1940 in reliance on an exception from the definition of an investment company under
that Act, and the offering of interests in the Funds is exempt from registration under the Securities Act of
1933.