Meros Investment Management LP

Item 5 – Fees and Compensation

The Firm charges Clients advisory fees or sub-advisory fees which are a fixed percentage of
assets under management (“Management Fees”). The Firm reserves the right to negotiate
Management Fees, performance fees and other compensation structures with Clients which
differ from the standard fees set forth herein, based on specific circumstances and on a case-
by-case basis. Examples of these circumstances include, without limitation: the relative size
of a Client’s account, a Client’s affiliation to the Firm, and/or a Client’s status as a seed
investor. Accordingly, Management Fees incurred by Clients may vary substantially. In
addition, with respect to Separate Accounts, all other terms of such investment, including terms
relating to expenses and redemption terms, may also be negotiable on a case-by-case basis. To
the extent that the Firm provides sub-advisory services for a Client, (i) the Management Fees
charged by the Firm may be less than the Management Fees incurred by an investor in the
product sub-advised by the Firm, (ii) the Management Fees are commonly negotiated with the
investment adviser of the Client, and (iii) the Firm receives a portion of the advisory fee paid
by the underlying Client.

Management Fees and Other Expenses

Generally, standard Management Fees (including sub-advisory fees) for the Micro-Cap
Strategy are referenced at an annual rate of one and a half percent (1.50%) of assets under
management, including cash. The time and manner in which Management Fees are remitted
by a Separate Account are negotiable on an account-by-account basis. Generally, the Firm
sends Separate Accounts a statement on a quarterly basis to a Client, or a Client’s designee, in
order to collect Management Fees. In addition, to the extent that a Client, or an investment
adviser of the Client in the case of sub-advisory accounts, provides the Firm a calculation of
the Management Fees, the Firm shall review the calculation. The Firm does not maintain
authority to unilaterally deduct fees from a Separate Account.

Separate Account agreements are highly negotiated in terms and may differ materially on a
Separate Account Client by Client basis. However, on a general basis Separate Accounts
directly bear the expense attributable to their investment activities, operations, and such service
providers as are engaged directly by the Client, including without limitation, qualified
custodians, accountants, and administrators. Pursuant to the terms of their Separate Account
agreements, a Separate Account Client directly or indirectly bears the costs attributable to such
Separate Account’s investment activities, including without limitation, costs charged by third
party and unaffiliated broker-dealers attributable to trading securities within their portfolios.
Additionally, Separate Accounts may be subject to certain indemnification requirements, as
further set forth within their applicable Separate Account Agreement. Separate Accounts are
generally not charged any expenses attributable to any accounting, operational, legal or
compliance services performed by the Firm in connection with such Separate Account.
Notwithstanding the above, the Firm may, in its sole discretion, choose to absorb any such
expenses incurred on behalf of a Client.
Meros Investment Management, LP                                                            Page 3

As such, Management Fees received by the Firm are exclusive of brokerage commissions,
transaction fees, and other related costs and expenses incurred by Clients. Clients may incur
certain charges imposed by custodians, brokers and other third-party service providers such as
custodial fees, deferred sales charges, odd-lot differentials, transfer taxes, wire transfer and
electronic fund fees, and other fees and taxes on brokerage accounts and securities transactions.
Mutual funds and private funds sub-advised, to the extent applicable, may also charge
additional fees, which are disclosed in such fund’s applicable offering documents, including,
without limitation and to the extent applicable, prospectus, SAI, operating agreement, private
placement memorandum, and/or subscription agreement. Such charges, fees and commissions
are exclusive of and in addition to the Firm’s Management Fee, and the Firm will not receive
any portion of these commissions, fees or costs, other than as reimbursement for out-of-pocket
expenses paid by the Firm at the request or on behalf of the Client.

Model Accounts

As the Firm does not currently advise Model Accounts, the Firm does not maintain a standard
fee schedule with respect to Model Accounts. However, advisory or management fees with
respect to Model Accounts generally fall below equivalent fees charged for full service,
discretionary accounts based on the same investment strategy.

Broker–Dealers

For information describing the factors that the Firm considers in selecting or recommending
broker-dealers for client transactions and determining the reasonableness of their
compensation, please see Item 12 – Brokerage Practices.

Performance Fees

Performance fees are advisory fees which are charged as a percentage of the appreciation of
the net asset value of a Client’s account. The Firm, in limited situations and generally at a
Client’s request, will consider the application of performance fees as a full or partial alternative
to Management Fees. Performance fees are highly negotiated, may include payment schedules
that differ from Management Fees, including sub-advisory fees, and are typically paid directly
to the Firm by the Client.

Compensation to Third Parties

The Firm may enter into written agreements with an affiliated or unaffiliated marketing group
or individuals that will solicit investors on behalf of the Firm. As compensation for their
solicitation services, such marketing groups or individuals may receive a percentage of the
...

Item 7 – Types of Clients

Meros seeks to provide direct investment advisory services to institutional investors such as,
but not limited to, mutual funds, pool investment vehicles, public and private pension plans,
insurance companies, foundations, and endowments. Although currently not offered, Meros
may in the future provide indirect investment advisory services to both institutional and non-
institutional investors through shares and interests in registered and unregistered pooled
investment vehicles it directly advises, with each of such vehicles deemed Clients of the Firm.

Generally, the minimum investment thresholds to open a Separate Account is five million
dollars ($5,000,000.00) for a Separate Account. However, the Firm may, in its discretion,
waive these minimum investment thresholds.

Meros Investment Management, LP                                                           Page 5