Proxima Capital Management LLC

Item 5. Fees and Compensation

The Funds pay the Adviser quarterly management fees in advance at a rate of up to 1.5% per annum of the net
assets under management of the respective Fund as of the first day of each quarter (collectively, the
“Management Fee”).

In the event an additional contribution is made to a Fund during a quarter, the Management Fee will be
charged as of the date of the additional contribution based on the value of the net assets as of such date and
will be prorated for the number of months remaining in the quarter. In the event a withdrawal or redemption
is made from a Fund during a quarter, the Management Fee will be refunded based on the number of months
remaining in the quarter. The Adviser receives the Management Fee each quarter by instructing the
administrator of the Funds to deduct the Management Fee from their respective accounts.

The Adviser (or a related person of the Adviser) typically receives an annual performance-based fee or
allocation, which may be paid or allocated to the Adviser (or to a related person of the Adviser) and is typically
an amount equal to 20% of the profits (including realized and unrealized gains and losses) allocated to a
Client, subject to a loss carryforward.

The Adviser may offer lower or different Management Fee and performance-based compensation schedules
to clients (including investors in the Funds) based on a variety of factors, including, among other things, the
nature of investments and length of relationship with the Adviser or its related persons. In addition, the
Adviser, its partners and related entities, and their respective partners, directors and employees, may invest
in the Funds without being subject to the Management Fee or any performance- based compensation.

In addition to paying the Management Fee and performance-based compensation, Clients bear certain other
expenses including but not limited to, to the extent applicable, legal, compliance, accounting (including third-
party accounting services), audit and other professional fees and expenses, tax preparation fees,
administration fees and expenses, a portion of the Adviser’s D&O and E&O insurance costs, expenses of
regulatory filings that are made with respect to Clients, research expenses (including research-related travel),
investment expenses such as commissions, custodial fees, interest on margin accounts and other
indebtedness (if any), bank service fees and other expenses related to the purchase, sale or transmittal of
Client assets. Client assets may be invested in a master-feeder structure. Feeder funds bear a pro rata share
of the expenses associated with the related master fund. For a more detailed discussion of fees and
expenses, investors should refer to the relevant Fund’s governing documents.

In addition, clients will incur brokerage and other transaction costs. Please refer to Item 12 of this Brochure
for a discussion of the Adviser’s brokerage practices.

Item 7. Types of Clients

The Adviser’s Clients currently consist of the Funds.

With respect to the Funds, any initial and additional subscription minimums are disclosed in the offering
memorandum for the applicable Fund. With respect to Accounts, the Adviser does not have any standard
requirements for opening or maintaining an account and may, in its discretion, require a different investment
minimum for any Account.