Red Arts Capital Management LLC

Item 5. Fees and Compensation

The fees and expenses that are applicable to an investment with the Adviser are set forth and agreed to in
the Funds’ Governing Documents. Prospective Investors must carefully review the Governing Documents
of the Fund, to review the specific fees and expenses applicable to their potential investment.

Certain Funds of the Adviser charge an annual investment management fee of 2% based on the amount of
the commitment under management (the “Management Fee”) which is set forth in more detail in the
Governing Documents. The Management Fee will be payable in advance on a quarterly basis. Investors
are generally not eligible for partial refunds in the case of early withdrawals or redemptions, but specific
details are set forth in the Governing Documents. In addition, the Adviser may from time to time receive
monitoring fees, consulting fees, due diligence fees, director’s fees, management contract termination fees,
corporate services fee, commitment fees, professional services fees, advisory fees and certain other fees
from portfolio companies or proposed portfolio companies and break-up fees which will offset the
Management Fee.

Further, the general partner of certain Funds can earn a performance-based fee (the “Carried Interest”) based
on the profits of the Fund that is deducted from the investment proceeds of the limited partners. Generally,
the general partner receives Carried Interest of 20% of the profits of a Fund, subject to an 8% hurdle rate.
The Fund’s Governing Documents include further details concerning the Carried Interest calculation. These
performance fee arrangements have been structured subject to Section 205(a)(1) of the Investment Advisers

Act of 1940 (the “Advisers Act”) in accordance with the available exemptions thereunder, including the
exemption set forth in Rule 205-3.

The Adviser, in its sole discretion, may waive or modify the Management Fee or Carried Interest for
Investors that are members, employees or affiliates of the Adviser, relatives of such persons, and for certain
large, strategic or other investors.

In addition to the Management Fee and Carried Interest as applicable, the Funds will bear their own
expenses, generally including organizational and partnership expenses as set forth in their respective
Governing Documents or other agreements between the Fund and the Adviser. Expenses borne by a Fund
may differ from expense borne by other Funds. A Fund is generally responsible for all costs associated with
and related to the Fund’s activities, investments, and business. These expenses will include but will not be
limited to: (i) legal, accounting, research, auditing, advisory, administrator, custodian, consulting, finders’,
investment banking, appraisal, break-up, due diligence, financing, filing, printing and other fees and
expenses (including, without limitation, expenses associated with the preparation, filing and distribution of
a Fund’s reporting, financial statements, tax returns, Schedule K-1 and associated or required schedules
(including the costs of establishing and maintaining any portal or website in which the foregoing items are
made available); (ii) any taxes, fees, duties and other governmental charges levied against a Fund; and (iii)
fees, compensation and expenses of third parties retained to provide management, consulting or other
business services to or with respect to the Fund, its investments or potential investments and portfolio
companies.

Item 7. Types of Clients

As described in Item 4, the Adviser’s Clients are pooled investment vehicles. The Adviser limits the
investors in the Funds to persons who are “accredited investors” as defined in the Securities Act of 1933,
“qualified purchasers” as defined in the Investment Company Act of 1940, or “qualified clients” as defined
in the Advisers Act, eligible to be charged a performance fee. Investors in the Adviser’s Funds include,
among others, individuals, trusts, pensions, endowments, and other institutional investors. In addition,
employees and other people associated with the Adviser and/or its affiliates are investors in the Funds. Any
minimums for investors are disclosed in the applicable Governing Documents. However, the Adviser has
the discretion to waive minimum investment requirements for investment in a Client.