Pavion Blue Capital LLC

Item 5: Fees & Compensation

Compensation for Our Advisory Services

Portfolio Management:

The maximum annual fee charged for this service will not exceed 1.25%. Fees to be assessed will be
outlined in the advisory agreement to be signed by the Client. Annualized fees are billed on a pro-
rata basis quarterly in advance based on the value of the account(s) on the last day of the previous
quarter. Fees are negotiable and will be deducted from client account(s). Our firm bills on cash and
cash equivalents unless indicated otherwise in writing. Adjustments will be made for deposits and
withdrawals during the quarter. In rare cases, our firm will agree to directly invoice. As part of this
process, Clients understand the following:

    a) The client’s independent custodian sends statements at least quarterly showing the market
       values for each security included in the Assets and all account disbursements, including the
       amount of the advisory fees paid to our firm;
    b) Clients will provide authorization permitting our firm to be directly paid by these terms. Our
       firm will send an invoice directly to the custodian; and
    c) If our firm sends a copy of our invoice to the client, legend urging the comparison of
       information provided in our statement with those from the qualified custodian will be
       included.

ADV Part 2A – Firm Brochure                    Page 5                                Pavion Blue Capital, LLC

Other Types of Fees & Expenses

Clients will incur transaction fees for trades executed by their chosen custodian via individual
transaction charges. These transaction fees are separate from our firm’s advisory fees and will be
disclosed by the chosen custodian. It is important to note that Fidelity Brokerage Services (“Fidelity”)
eliminated transaction fees for U.S. listed equities and exchange traded funds for clients who opt into
electronic delivery of statements or maintain at least $1 million in assets at Fidelity. Clients who do
not meet either criteria will be subject to transaction fees charged by Fidelity for U.S. listed equities
and exchange traded funds.

Clients may also pay holdings charges imposed by the chosen custodian for certain investments,
charges imposed directly by a mutual fund, index fund, or exchange traded fund, which shall be
disclosed in the fund’s prospectus (i.e., fund management fees, initial or deferred sales charges,
mutual fund sales loads, 12b-1 fees, surrender charges, variable annuity fees, IRA and qualified
retirement plan fees, and other fund expenses), mark-ups and mark-downs, spreads paid to market
makers, fees for trades executed away from custodian, wire transfer fees and other fees and taxes on
brokerage accounts and securities transactions. Our firm does not receive a portion of these fees.

Termination & Refunds

Either party may terminate the advisory agreement signed with our firm for Portfolio Management
services in writing at any time. Upon notice of termination our firm will process a pro-rata refund of
the unearned portion of the advisory fees charged in advance.

Commissionable Securities Sales

Our firm and representatives do not sell securities for a commission.

Item 7: Types of Clients & Account Requirements

Our firm has the following types of clients:
   • Individuals and High Net Worth Individuals;
   • Trusts, Estates or Charitable Organizations;
   • Corporations, Limited Liability Companies and/or Other Business Types
   • Asset Based Loan Accounts

Clients who opt into electronic delivery of statements or maintain at least $1 million in assets at
Fidelity will not be charged transaction fees for U.S. listed equities and exchange traded funds.

ADV Part 2A – Firm Brochure                    Page 6                                 Pavion Blue Capital, LLC

Our firm is flexible regarding requirements for opening and maintaining accounts or otherwise
engaging us. Requirements are based upon the facts and circumstances of the client or potential
client.