Neon Liberty Capital Management LLC

5. Fees and Compensation
A. We receive compensation from our clients based on the percentage of assets under management.
   Generally, we charge our clients a management fee based on a percentage of assets under
   management, calculated and payable quarterly in advance. Investors admitted to the funds other than
   on the first day of a calendar quarter are subject to a prorated management fee.

   Additionally, our affiliates generally receive performance‐based compensation based on a percentage
   of each fund investor’s annual net realized and unrealized profits at the end of each fiscal year or upon
   a withdrawal event, subject to a “high water mark” limitation, and subject to a hurdle, where applicable
   (see below). We typically structure our performance‐based compensation as profit‐sharing allocations
   through general partner interests that our affiliates hold in our client funds. Performance‐based
   compensation is allocated at the master fund levels, and no separate performance‐based compensation
   is taken at the feeder fund levels.

   Although fees are generally non‐negotiable, we have the discretion to waive all or a portion of the
   management fee and/or the performance‐based compensation, but typically only exercise this
   discretion for investors that are our affiliates or employees. In addition, we have the discretion to enter
   into side letter arrangements with certain investors in our client funds in which we grant them
   preferential treatment in terms of transparency, liquidity and fees.

   Asset‐Based Management Fees:

   Emerging Markets Fund: 1.5% of the net asset value of each Series A and Series D investor’s capital
   account, annually; 1.25% of the net asset value of each Series B and Series E investor’s capital account,
   annually; and 1% of the net asset value of each Series C and Series F investor’s capital account, annually.

   Lorikeet Funds: 1.5% of the net asset value of the Lorikeet master fund indirectly attributable to each
   Class B and Class D investor’s capital account and each Class Lorikeet E and Class Lorikeet G investor’s
   capital account, annually; and 1.25% of the net asset value of the master fund indirectly attributable to
   each Class C and Class E investor’s capital account and each Class Lorikeet F and Class Lorikeet H
   investor’s capital account, annually.

   Wei Ji Funds: 1.5% of the net asset value of each Class B investor’s capital account, annually; 1.25% of
   the net asset value of each Class C investor’s capital account, annually.

   Japan Chickadee Fund: 1.5% of the net asset value of each Series A investor’s capital account, annually;
   1.25% of the net asset value of each Series B investor’s capital account, annually.

   Performance‐Based Compensation:

   Emerging Markets Fund: 20% annually of the client’s annual net profits attributable to each Series A and
   Series D investor’s capital account, subject to a high water mark; and 15% annually of the client’s annual
   net profits attributable to each Series B, Series C, Series E and Series F investor’s capital account, subject
   to a one‐time “hurdle rate” of 5% applied to each capital contribution and a high water mark. Thus, the
   performance‐based compensation for Series B, Series C, Series E and Series F interests only applies to
   the extent that net profits attributable to each capital contribution measured on a cumulative basis, net
   of any losses, for all fiscal years since such capital contribution was made exceeds 5%. Once the “hurdle

    rate” is achieved, the performance‐based compensation applies at the close of such fiscal year to all net
    profits. A high water mark ensures that we only receive performance‐based compensation when the
    client’s account value is greater than its previous greatest value (reduced pro rata by any withdrawals
    of capital by an investor). Should the account drop in value, then it must exceed the previous greatest
    value before we can receive performance compensation again.

    Lorikeet Funds: 20% annually of the Lorikeet master fund’s annual net profits indirectly attributable to
    each Class B and Class D investor’s capital account and each Class Lorikeet E and Class Lorikeet G
    investor’s capital account and 15% annually of the Lorikeet master fund’s annual net profits indirectly
    attributable to each Class C and Class E investor’s capital account and each Class Lorikeet F and Class
    Lorikeet H investor’s capital account, subject to a high water mark (as described above) and a one‐time
    “hurdle rate” of 5% applied to each capital contribution (as described above).

    Wei Ji Funds: 10% annually of the client’s annual net profits attributable to each Class B investor’s capital
    account, subject to a high water mark (as described above); and 7.5% annually of the client’s annual net
    profits attributable to each Class C investor’s capital account, subject to a high water mark.

    Japan Chickadee Fund: 10% annually of the client’s annual net profits attributable to each Series A
    investor’s capital account, subject to a high water mark (as described above); and 7.5% annually of the
    client’s annual net profits attributable to each Series B investor’s capital account, subject to a high water
    mark.

B. Management fees are deducted from client assets quarterly in advance. We generally deduct
   performance‐based compensation at the end of each fiscal year (June 30th in the case of the Neon
   Liberty Emerging Markets Fund Ltd.) or when investors in a client make a withdrawal or redemption
   (but only on the amount withdrawn or redeemed).

C. Each client bears all its own organizational and operational expenses, as permitted by the relevant
   client’s governing documents. Clients generally are responsible for the following types of organizational
   and operational expenses:
         • legal fees (including settlement costs);
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7. Types of Clients

   We provide investment advisory services solely to privately pooled investment vehicles, including
   domestic and offshore investment funds. Investors in the funds typically include individuals, trusts,
   foundations, endowments, charitable organizations, pension plans and other unregistered funds.

   Investment Requirements

   To invest in any of the funds, we generally require a minimum investment of $500,000, although at
   times we may waive this requirement. In addition, investors must satisfy all the eligibility criteria set
   forth in our offering documents for the relevant fund. To comply with Securities and Exchange
   Commission regulation, we require that U.S. investors in our funds qualify as both accredited investors
   and qualified clients, each as defined in the offering documents of the relevant fund. We reserve the
   right to reject any subscriptions.

   This brochure is not an offer to invest in our funds.

8. Method of Analysis, Investment Strategies and Risk of Loss
  A.         Method of Analysis:

   We use a variety of sources for developing investment strategies and for recommending investments
   to be included in our clients’ portfolios. Our internal research team analyzes companies and is a
   principle source of investment ideas. In addition, we use charting, fundamental, cyclical, and technical
   research, industry contacts and conferences and services such as those provided by Bloomberg, Reuters,
   Factset and various brokerage firms to perform our analysis.

   Investment Strategy:

   Emerging Markets Fund: We invest in securities of small and mid‐capitalization issuers in countries
   generally considered to be relatively less developed or industrialized (“emerging/frontier markets”) or
   in issuers organized in more developed markets that derive a large portion of their revenues or earnings
   from emerging/frontier markets. The fund’s private placement memorandum describes the fund’s
   investment strategy in more detail.

   Lorikeet Funds: We focus on securities of small and mid‐capitalization companies in emerging/frontier
   markets. The offering documents of the relevant fund describe the fund’s investment strategy in more
   detail.

   Wei Ji Funds: We invest in emerging/frontier market securities generally trading at a discount to their
   “net current assets.” The offering documents of the relevant fund describe the fund’s investment
   strategy in more detail.

   Japan Chickadee Fund: We invest in Japanese securities generally trading at a discount to their intrinsic
   values. The fund’s private placement memorandum describes the fund’s investment strategy in more
   detail.

   Investing in any securities involves a risk of loss that our clients and the investors in our clients must be
   prepared to bear.

B. Risk Factors:

All investments involve a risk of loss and we cannot guarantee that any investor in our client funds will
not lose some or all the value of their investment. The following is a description of the various strategies
that we utilize in advising our clients and some important risks associated with each strategy. The
following explanation of certain risks is not exhaustive, but rather highlights some of the more
significant risks involved in our investment strategies.

Hedging. We occasionally engage in hedging strategies designed to reduce the overall level of risk in our
clients’ portfolios. For example, we may invest directly or indirectly in foreign currencies in an attempt
to reduce the impact of currency exchange rate fluctuations on the value of client holdings that are
denominated in a foreign currency. There can be no assurances that a particular hedge will be effective.
Consequently, these strategies may result in poorer overall performance and increased risk than if we
did not employ hedging strategies at all.

Off‐Balance Sheet Market Risk. We enter into financial instrument transactions on behalf of our clients
that may have off‐balance‐sheet market risk. Off‐balance‐sheet market risk exists when the maximum
potential loss on a particular financial instrument is greater than the value of the financial instrument,
as reflected in the client’s statement of assets and liabilities. Market risk is substantially dependent upon
the value of the underlying financial instruments and is affected by market forces such as volatility and
changes in interest and foreign exchange rates.

Short Sales. With respect to certain clients, we occasionally maintain equity securities on both a long
and short basis on behalf of our clients. While long positions represent the client’s ownership of
securities, short positions represent obligations of the client to deliver specified securities at a future
time. By entering into short sales, the client bears the market risk of increases in value of the security
sold short in excess of the proceeds received. As there is no limit with respect to how much the value
of an equity security might increase, short sales entail a risk of loss that is unlimited and, therefore, may
be substantially greater than the value of the proceeds received. To mitigate the risk of loss, we
continuously mark to market and monitor long and short positions. Investment in securities and
securities sold short are subject to margin requirements.

Credit Risk. The clients are subject to credit risk arising from transactions with counterparties and prime
brokers related to securities purchases and sales. Credit risk is the amount of loss that the client would
incur if the counterparty fails to perform its obligations under the contractual terms. In the normal
course of business, the clients enter into ISDA (International Swap Dealers Association) agreements with
certain counterparties for over‐the‐counter derivative transactions. These agreements contain, among
other conditions, events of default and termination events, and various covenants and representations.
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