Red Reef Advisors LLC

Item 5: Fees and Compensation

Portfolio Management Fees

Fee schedules are negotiated on a client-by-client basis and are determined based upon a number
of factors including, but not limited to, the amount and type of work involved, the size of the
portfolios and the resources dedicated to providing the services.

In general, Red Reef Advisors, LLC uses asset management and investment management
interchangeably. Standard practice, although from-time-to-time driven by specific client request
and needs, is for fees to be charged, is to charge up to a maximum of 2% annually, for our asset
management services based on a percentage of assets under management, billed in arrears on a
monthly or quarterly basis (upon client’s express request, as specified in the IAC). The fee is
calculated based on market value of the account as of the last business day of the billing period
as reported by the custodian of each account. From time to time the market value of the account
may vary from the statement value printed on the custodial statement or invoice due to trailing
dividends and/or settling trades. If asset management services are commenced in the middle of
the billing period, then the prorated fee for that billing period will be billed in arrears at the end
of that billing period. Deposits and withdrawals, cash flow, may also be prorated to reflect days
of service provided.

When calculating the fee, it will be rounded to the nearest dollar, the number of cents is always
0. When there are 50 to 99 cents in the pre-rounded fee, we round up. When there are fewer than
50 cents in the pre-rounded fee, we round down. The final fee schedule is attached as Exhibit II
of the Investment Advisory Contract. The agreement may be terminated at any time upon 30
days’ written notice by either party.

Neither Red Reef Advisors nor its associated persons receive “trailer” or 12b-1 fees from an
investment company that the firm recommends. Fees charged by issuers are detailed in
prospectuses or product descriptions and clients are encouraged to read these documents before
investing.

Consulting/Monitoring Services Fees

Consulting services are generally charged a fee based on the percentage of the market value of
the assets being monitored or, instead, as a fixed fee. Fees are on an annual basis, payable
monthly or quarterly, in arrears on the market value at the beginning of the month and may vary
for each account. Fees will be charged up to a maximum of 2%. At times, due to special
circumstances, a client’s fee may be different than the fee and schedule listed herein. These fees
are generally negotiable, and the final fee schedule is attached as Exhibit II of the Investment
Advisory Contract. Fees for such a plan are determined on a case by case basis, based on the level
of expertise and sophistication required to deliver such a plan. Fees charged on a fixed fee basis
ranging between $1,500 and $50,000 depending on the breadth of services provided, the
complexity of the client’s situation, and the advisory representatives providing services to the
client. The agreement may be terminated at any time upon 30 days’ written notice by either party.

Financial Planning for a Fixed or Hourly Fee

At our discretion, we may enter into an engagement with a client to create a one-time, customized
financial plan on a fee basis. Such a plan will include topics described in the previous financial
planning section as agreed upon by Red Reef Advisors and the client. Fees for such a plan are
determined on a case by case basis, based on the level of expertise and sophistication required to
deliver such a plan. However, fees are generally charged on a fixed fee basis ranging between
$1,500 and $15,000 depending on the breadth of services provided, the complexity of the client’s
situation, and the advisory representative providing services to the client. In addition, Red Reef
Advisors may negotiate hourly fees for these services is between $150 and $500 per hour. Fees
are charged in arrears, payable monthly or quarterly, and are due upon completion.

Prior to commencing financial planning services, the client will be required to enter into an
agreement for services. Thereafter, clients may terminate the Financial Planning Agreement
generally upon written notice.

Clients may terminate the agreement without penalty for a full refund of Red Reef Advisors’ fees
within five business days of signing the Financial Planning Agreement.

Qualified and ERISA Plan Consulting Services Fees

Qualified and ERISA Plan Consulting Clients pay one fee to Red Reef Advisors
for this service that covers the services provided by Red Reef Advisors and the investment
management services provided by Red Reef Advisors. The actual fee charged to each
client will be determined with the client and detailed in the agreement for services.
Annual fees are billed to the client on a monthly or quarterly basis. Asset-based fees will be
charged up to a maximum of 2%. For asset-based fees, the fee will be calculated monthly or
quarterly based on the value of the Plan’s assets at the end of each month or quarter. At our
discretion, we may enter into an engagement with a client to charge a fixed fee ranging between
$1,500 and $50,000 annually, as opposed to an asset-based fee. Annual fixed fees are divided into
equal monthly or quarterly payments.

Either party (i.e. the client or our Firm) may terminate the agreement for services with 30 days
written notice to the other party. A refund of any unearned fees will be made based on the time
expended by Red Reef Advisors before termination. A full refund of any fees paid will be made
if the agreement is terminated within five business days. When fees are billed in arrears, the
client will be responsible for paying the final fee on a pro-rated basis.

Fees for Outside Advisers or Managers

The fees associated with outside Advisers or Managers are billed separately through a separate
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Item 7: Types of Clients

Red Reef Advisors primarily provides customized investment management services to
individuals, high-net-worth individuals, retirement and pension plans, trusts, estates, business
entities, charitable foundations and private corporations. Red Reef Advisors’ minimum account
size is generally $500,000.