Karl Kapital LLC

Item 5 - Fees and Compensation

Karl Kapital receives compensation from Clients comprised of a fee based on a percentage of assets under
management (the “Management Fee”) and performance-based compensation in the form of an incentive
allocation or fee paid to Karl Kapital (“Performance Allocation”). The Management Fee with respect to
the Funds is paid quarterly in advance based on the net asset value of the relevant assets as of the first
business day of the respective calendar period in accordance with the documents governing the Client
relationship. The Management Fee is typically prorated for periods less than a full quarter. The
Performance Allocation is based on realized and unrealized gains and is allocated annually or upon a Client
investor’s withdrawal of capital from a Fund. Karl Kapital may waive or reduce all or any portion of the
management fees or Performance Allocations with respect to any Client or Investor, as applicable,
including investors who are members, partners, affiliates or employees of Karl Kapital, their immediate
family members, or certain large or strategic investors, as well as any management fees or performance-
based allocations or fees with respect to any other Client. Karl Kapital deducts management fees and
Performance Allocations directly from Client accounts for Funds that it sponsors.

In addition to the fees discussed above, each Client typically bears all costs directly related to its trading
and operations, including without limitation organizational expenses, trading costs and expenses (such as
brokerage commissions, expenses relating to short sales, and clearing and settlement charges), research-
related fees and expenses, ongoing legal, accounting, administrative, audit, tax and bookkeeping fees and
expenses, and taxes governmental registrations and offering-related expenses. Karl Kapital seeks to
allocate expenses among its Clients in a fair and equitable manner, considering the extent to which each
Client benefits from the product or services. Depending upon the nature of the expense, it could be
allocated in proportion to the Clients’ relative assets under management or relative use of the product
(or relative participation in an investment, if the expense is related to such investment), equally among
all participating Clients or in another manner that Karl Kapital deems fair and equitable.

Karl Kapital renders its services to Clients at its own expense and will be 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.

Sub-advisory Clients are also charged a management fee and performance-based compensation as
described in the respective governing documents. The terms governing the payment of such fees can
differ from those of the Funds. Sub-advisory Clients also pay their own expenses as set forth in the
governing documents.

Neither Karl Kapital nor any of its affiliates or related persons receive commission or transaction-based
compensation related to the sale of interests in the Funds.

It is very important that Investors refer to their respective Fund’s governing documents for a complete
understanding of their withdrawal/redemption rights. The information contained herein is a summary
only and is qualified in its entirety by the relevant Fund governing documents.

Karl Kapital: Part 2A

Item 7 - Types of Clients

Karl Kapital provides investment advice to pooled investment vehicles organized as private investment
funds and may provide investment advice to other types of Clients, which may include institutions,
investment pools, trusts, endowments, sovereign wealth funds, pension plans, or charitable
organizations, but excluding persons within the definition of “retail investors” under Rule 17a-14(e)(2) of
the Securities Exchange Act of 1934.

Each Investor in the Funds sponsored by Karl Kapital must meet certain eligibility provisions:
interests/shares in the Funds are generally offered to Investors who are (i) accredited investors within the
meaning of Regulation D of the Securities Act of 1933, as amended (“Accredited Investors”) and (ii)
“qualified purchasers” or “knowledgeable employees” under the 1940 Act. Additionally, Karl Kapital

Karl Kapital: Part 2A

requires a minimum initial capital contribution of $500,000 and additional capital contributions in
increments of $100,000 but may waive these minimums at its discretion.