Phraction Management LLC

Item 5 – Fees and Compensation
  A. Fees

      DISCRETIONARY/LIMITED DISCRETIONARY ACCOUNTS

      We charge fees in accordance with one of the following methods as agreed by the client:

     1. ASSET-BASED FEE. We will charge an annualized fee typically between 0.40% and 0.85%
        of the value of the assets under management. The specific fee is negotiated with the client and
        is based on factors such as the size and complexity of the client’s portfolio. We offer reduced
        fees for large accounts and for accounts managed for family members and certain related parties,
        as determined at our discretion.
         Fees will be charged on a monthly or quarterly basis in arrears and may be subject to a minimum
         fee, as agreed to by the client. The fee is based upon either (a) the average daily balance during
         the period or (b) the period end value. For the first period (quarter or month, as the case may
         be), fees will be adjusted pro rata based on the number of calendar days during which the
         advisory agreement was in effect. Any contributions and/or withdrawals made during a period
         will result in an adjustment to the advisory fee.

     2. FIXED FEE. We offer a fixed monthly or quarterly fee option. The fixed fee will be negotiated
        at the inception of the advisory relationship and will be based upon the scope and complexity of
        the advisory service to be provided and the size of the client’s portfolio. The fixed fee will be
        charged in arrears. The first month’s fee will be pro rated based on the number of days in the
        period during which the agreement was in effect. The negotiated fee will be stated in the written
        agreement between Phraction and the client.

     3. PERFORMANCE-BASED FEE. We offer a performance-based fee arrangement to qualified
        clients, as defined in the Investment Advisers Act. Under this arrangement, the client pays a
        reduced asset-based or fixed fee (lower than the standard fees that could be negotiated under the
        “Asset-Based Fee” and “Fixed Fee” options) in addition to a performance-based fee. The
        performance-based fee is equal to 5% of the account’s net profits, calculated annually. It is applied
        only to profits that exceed any prior cumulative gains. This fee is calculated using a “high-water
        mark” method, which means a performance fee is charged only if the account’s value at the end of
        the calendar year exceeds its highest historical year-end value (adjusted for any deposits or
        withdrawals). The high-water mark resets at the end of each calendar year to reflect the highest
        level of cumulative portfolio gains. Contributions to the account increase the high-water mark by
        the amount of the contribution. Withdrawals from the account reduce the high-water mark by the
        amount of the withdrawal. Net profits include all gains and income in the account, such as interest,
        dividends, distributions, option premiums, and both realized and unrealized capital gains. From
        this amount, we deduct any account-related expenses, including administrative fees, brokerage
        commissions, and margin interest. Contributions and withdrawals themselves are not included in
        the calculation of net profits, although any income or gains generated from contributed assets are
        included.

      The performance-based fee is calculated at the end of each calendar year and is deducted from the
      account in January of the succeeding year by the account’s Custodian. In the first year, the
      performance fee will be pro rated based on the number of days the account was managed during
      that year.

   In all cases, the Advisory services commence on the date on which the advisory agreement is signed
   by us.

   There may be periods of time with low or no transaction activity in a client’s discretionary account.
   Among the reasons for this include market conditions, restrictions placed on the account by the
   client, tax considerations, performance, nature of securities held, or the investment strategy(ies)
   being pursued.

   Lower advisory fees may be negotiated on an individual account basis. As a result, clients with
   similar assets will have differing fee schedules and pay different fees.

   HOW FEES ARE COLLECTED. The client's account will be debited for the above-mentioned
   fees. We collect the fees from the amount of any contribution or transfer, from available cash in
   the client's account, or by liquidating the client's assets held in the client's account in an amount
   equal to the fees that are due. Alternatively, as agreed to by the client and us, we will invoice the
   client for the amount due. Invoices are payable upon receipt.

   CONSULTING. The client pays us an agreed-upon fixed monthly or quarterly fee for services
   rendered. The monthly or quarterly fee may be renegotiated from time to time based on the time
   dedicated by our staff to the services provided. Quarterly fees are charged in arrears. We will
   invoice the client for fees due.

   FEE SCHEDULE MODIFICATIONS. Typically, in our agreements with our clients, we reserve
   the right to adjust the fee schedule upon thirty (30) days' prior written notice to the client.

   LOWER FEE DISCLOSURE. Lower fees for comparable management or other services may be
   available from other sources.

B. Termination of Service

   DISCRETIONARY/LIMITED DISCRETIONARY ACCOUNTS. In connection with the
   discretionary/limited discretionary management services, upon written notice to Phraction, within
   five (5) business days of entering into an agreement with the Firm, the client will have the right of
   termination without penalty or payment of fees. The Firm will refund any payment that has been
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Item 7 – Types of Clients
Generally, we offer advisory services to high-net-worth individuals, trusts, estates, organizations, or
corporations or other business entities.

When subscribing to the advisory services offered by us, generally, the minimum account value is
US$5,000,000. If the value of a client’s account declines below the account minimum value during the
advisory relationship, we reserve the right to require the client to deposit additional monies or securities to
bring the account value up to the minimum amount required. In special cases, account minimums are
waived or negotiated.