Phase 2 Partners LLC

Item 5 - Fees and Compensation

Phase 2 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 Phase 2 (“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. Phase 2 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 Phase 2, 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. Phase 2 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. Phase 2 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 Phase 2 deems fair and equitable.

Phase 2 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 Phase 2 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.

Phase 2: Part 2A                                                                                   Page 6

Item 7 - Types of Clients

Phase 2 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 Phase 2 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, Phase 2 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.

Phase 2: Part 2A                                                                                   Page 7