Proficio Capital Partners LLC

Item 5: Fees and Compensation

        A. Description

        Client Advisory and Management Services Proficio bases its management fees upon a
        percentage of a client’s assets under management. Each client pays a quarterly
        management fee in arrears of up to 0.25% (1.0% per annum) of the client’s average
        account balance calculated as of the last business day of each quarter. In certain

situations, clients are charged a fixed annual fee of up to $1,500,000 depending on
additional services required, the amount of assets under management or in lieu of a
percentage of the client’s assets. In one situation involving a family member,
Proficio may receive a discretionary bonus in addition to its flat fee. Proficio
provides advice on unmanaged assets in exchange for a fixed oversight fee that can be
as high as $500,000 per year depending on the amounts involved and other services
provided. Fees are negotiable. Feeds for sub-advisory services are a percentage of
the fee received by the adviser.
Private Funds Proficio charges Private Fund clients an investment management fee of
up to 1.0% per annum, paid quarterly or monthly in arrears. Proficio may also charge
certain Private Fund clients an annual performance allocation or fee of up to 10% of
the net realized and unrealized capital appreciation measured over an agreed upon
period (generally when the instrument provides a return or matures) and at times the
performance fee is subject to a target or hurdle for the increase in value, depending on
the structure. Proficio will not double dip the management fee but will charge clients
either at the Private Fund level or an investment management fee as set forth in a
client’s investment management agreement based on the client’s total assets under
management with Proficio. Clients holding interests in Private Funds will contribute
to the Private Fund’s expenses (which include expenses such as accounting,
administrative costs, legal, insurance and organizational expenses). Proficio offers
different classes of Private Fund interests with different fees. For example, a seed
investor can receive a lower fee if demand is low, or certain investors that only invest
in the Private Funds and are not investment management clients will pay different
management and performance fees. Proficio has the right to waive administrative
costs for Private Funds, cap expenses, establish new Private Funds or share classes of
existing Private Funds with higher or lower fees or incentive fees and has exercised
these rights in the past.

Sub-Advised Privately Placed, Insurance Dedicated, Pooled Funds The sub-advisory
fee for the Proficio Capital Strategic Opportunities IDF and the Proficio Uncorrelated
Fund depend on the class, with Class A-1 paying an initial fee of 0.50% per annum
and classes A-2 and A-3 paying 1.00% per annum on the net asset value in the class
If the amount of assets under management in Class A-1 is $75 million or more, the
class will not pay a subadvisor’s fee to Proficio. Class A-3 pays an annual incentive
fee to the sub-advisor (Proficio) of 10% of net new profits as of the last calendar day
of the year. Net new profits are the sum of realized and unrealized profits and losses
for the year plus losses, if any, carried forward from prior years until recouped. An
investor in Class A-3 can pay an incentive fee on unrealized profits that are never
realized depending on when they withdraw. Proficio receives the entirety of the
incentive fee. Fees for the Proficio Capital Strategic Opportunities IDF are charged
monthly in advance. Proficio Uncorrelated Fund fees are charged quarterly in
advance.

Investment Company Registered Under the Investment Company Act of 1940
Proficio serves as a sub-adviser to the investment adviser of an investment company
registered under the Investment Company Act of 1940. Proficio will receive a

portion of the 0.85% of the average daily net assets fee charged by the investment
company to its investors for advisory services. Proficio will rebate the fees it earns to
Proficio’s clients where Proficio has caused the client to invest in the investment
company. Those clients will still pay Proficio an investment advisory fee based on
their assets under management by Proficio.

Special Services In certain situations, clients have asked Proficio to provide special
services, such as investing certain assets in a specific category of securities. These
accounts may have minimum return hurdles where the client does not pay Proficio if
the account returns less than the hurdle. Proficio has charged these clients a sliding
fee based on portfolio returns from a low of 0% up to a maximum of 1.5%. These
accounts can have graduated fees where the Proficio’s fees increase by every 100
basis points the account earns above the hurdle up to the maximum. Proficio reserves
the right to negotiate its management fees based on certain factors such as the size of
the investment, certain unique aspects of the account, unique portfolio structures such
as a rolling certificate of deposit portfolio or the provision of special services to
account holders. Management fees for those clients that entrust their retirement plan
assets to Proficio are up to 0.25% of the client’s account balance each quarter as
calculated as of the last business day of the quarter and are charged in arrears. As for
all its clients, regardless of whether they invest retirement funds, Proficio receives no
payments from third parties other than the soft dollar benefits as disclosed in Item 12
A. 1 below.
Valuation Proficio’s clients and the Private Funds it manages, often invest in illiquid
investments such as other private funds, hedge funds or companies for which no
public market exists, and market prices are unavailable. Illiquid investments are
difficult to value. For five of the Private Funds, a third-party Administrator provides
Proficio with a valuation based on the on the valuation or data provided by the
...

Item 7: Types of Clients

         Proficio provides investment advisory services to high-net-worth individuals and their
         families, trusts and limited liability companies formed by these individuals,
         foundations and endowments, and to the advisor of privately placed, insurance
         dedicated funds that only market to high-net worth individuals. Proficio also
         provides advice as a sub-adviser to a Canadian investment adviser as an unregistered
         foreign adviser in Ontario and to the adviser of a registered investment company.
         Proficio provides investment advisory services to the Private Funds it sponsors.
         Proficio also provides investment advisory services to businesses and institutional
         clients.
         Proficio has a minimum initial investment from clients of $20,000,000, although
         Proficio may accept lesser amounts in its sole discretion. Each investor in any Private
         Fund sponsored by Proficio must be at least an “accredited investor,” as defined in
         Regulation D under the Securities Act of 1933, as amended, and in some cases a
         “qualified client,” as defined in Rule 205-3 under the Investment Advisers Act of

         1940, as amended. Certain Private Funds may require investors to satisfy the higher
         standard of a “qualified purchaser” pursuant to Section 2(a)(51) of the Investment
         Company Act of 1940 to qualify the offering of interests under the exclusion pursuant
         to Section 3(c)(7) of the Investment Company Act of 1940. Exceptions are made for
         direct family members of clients that meet these criteria but who may not meet the
         standard individually. Care is taken that these individuals receive the assistance of a
         purchaser representative who is financially sophisticated and capable of evaluating
         the merits and risks of the Private Fund investment.