Prentice Capital Management LP

FEES AND COMPENSATION

Fund Fees and Expenses

        Management Fee

               Investors in the Funds bear a management fee, payable quarterly in advance,
in an amount equal to 0.4375% (1.75% per annum) of the net asset value of such
investor's interests. The management fee will be prorated for any capital contribution or
withdrawal by an investor that is effective other than as of the first day of a quarter.

        Incentive Allocation

                Generally, at the end of each fiscal year of each Fund, the Investment Adviser
or its affiliates are entitled to an incentive allocation (the "Incentive Allocation") in an
amount e q u a l t o 18.5% of the net capital appreciation (which includes both realized gains
and losses and unrealized appreciation and depreciation of securities) allocated to a Fund
investor's capital account for such fiscal year after deducting the management fee debited to
such investor's capital account for such fiscal year, subject to a high water mark.

                In the event that a Fund is terminated or an investor withdraws other than at the
end of a fiscal year, then for purposes of determining the incentive allocation allocable at such
time to the Investment Adviser or its affiliates, net capital appreciation will be determined as
if such dates were the end of the fiscal year, subject to certain adjustments. The Investment
Adviser may waive, reduce or calculate differently the management fee or incentive allocation
with respect to certain Fund investors.

        Additional Fees and Expenses

                 The Funds bear their own expenses including, without limitation, investment-
related expenses (e.g., brokerage commissions, research-related expenses (including, news and
quotation equipment and services, expenses associated with attending consumer and/or retail
conferences and seminars and travel, lodging and other expenses incurred in connection with
meeting members of management of existing or prospective investment targets), clearing and
settlement charges, custodial fees, interest expenses, expenses relating to consultants,
attorneys, brokers or other professionals or advisors who provide research, advice or due
diligence services with regard to investments, appraisal fees and expenses and investment
banking expenses), computer hardware and software and related technology services (including
hardware and software used to route trade orders and hardware and software relating to internal
portfolio systems) and expenses associated with installing computers, cable and telephone lines
and equipment, investment-related travel expenses, legal expenses, accounting, audit, tax
preparation and other tax-related expenses (including preparation costs of financial statements,
tax returns and reports to investors), expenses relating to obtaining liability insurance for
directors and officers, the Investment Adviser, its affiliates and their respective partners and
members, entity-level taxes, organizational expenses, printing and mailing costs, expenses
relating to the offer and sale of interests (including travel and other expenses related to meetings
with prospective investors), the management fee, administration fees and related costs
(including fees to the administrator), extraordinary expenses and other expenses associated

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with the operation of the Funds, as determined by the general partner or Investment Adviser,
as applicable.

SMA and/or Sub-Advisory Fees and Expenses

The Firm and SMA Clients will negotiate the terms of any advisory fees Performance related
compensation applicable to SMA Clients are calculated inclusive of realized and unrealized
gains of the relevant account. Advisory fees and performance related compensation terms are
memorialized in each Clients IMA. Performance related compensation applicable to SMA
Clients is payable upon the end of each fiscal year and will be prorated if the SMA account is
terminated prior to year-end.

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TYPES OF CLIENTS

               As described above, the Investment Adviser offers investment advice to
privately placed pooled investment vehicles as well as SMAs.

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