Southpaw Asset Management LP

Item 5: Fees and Compensation
For our private fund clients, management fees and performance-based compensation that we, or
an affiliate of ours, collect equal 1.5% per year and 20% of gains, respectively. We deduct
management fees from investors’ capital account balances at the beginning of each quarter. For
our private fund clients that are partnerships, our performance-based compensation is typically
structured as a profit-sharing allocation through a general partner interest held by one of our
affiliates. Each investor in our private fund clients is subject to a performance allocation at the
end of each year or upon a withdrawal, but only with respect to the withdrawn amount. Our
performance-based compensation is subject to a cumulative loss carryforward restriction, or
“high water mark,” which means we only receive a performance allocation when an investor’s
account value for the year has recovered any losses since the last performance allocation.

Certain investors in our private fund clients pay discounted management fees and/or
performance-based compensation pursuant to supplemental agreements or “side letters.” Also,
investors in our private fund clients who are associated with our firm, such as our officers or
employees, or their family members, generally do not pay management fees or incur
performance fees.

In addition to the management fees and any performance-based compensation, clients generally
also bear various other fees and expenses, either directly or by reimbursing Southpaw or an
affiliate, including, among others, all costs and expenses related to portfolio investments or
prospective investments (whether or not consummated) such as brokerage commissions, interest

on debit balances or borrowings, fees and profit-sharing payments due to unaffiliated advisors,
sub-advisors and consultants, specific expenses incurred in obtaining systems, research
(including research-related travel and meal expenses) and other information utilized with respect
to a client’s investment program (including the costs of statistics and pricing services, service
contracts for quotation equipment and related hardware and software), membership dues in
connection with investment and sourcing opportunities, expenses of money market and mutual
funds in which a client invests and any withholding, transfer taxes or other taxes, and penalties
and interest with respect thereto, imposed on a client (and any taxes imposed on clients under the
Bipartisan Budget Act of 2015 (or any similar subsequent regime)). Clients generally also bear
all costs of administration (including all costs and expenses associated with the offering of
interests) and accounting, audit, administration and legal expenses (including legal expenses
incurred in negotiating side letters with current or prospective investors); the expenses of any
appraisers or other experts engaged on behalf of a client; if formed, the costs and expenses of any
advisory committee; costs associated with governmental regulatory compliance (including
governmental, regulatory, licensing, filing or registration fees and costs incurred in compliance
the rules of any self-regulatory organization); costs of any litigation or investigation involving
client activities (including settlement costs); the costs of any liability insurance obtained on
behalf of a client, Southpaw, the Principals or any of their respective affiliates; and costs
associated with reporting and providing information. Investors in our private fund clients
indirectly bear their pro rata share of these costs, as well as other expenses that are described in
our private fund clients’ offering documents. We describe trading costs in greater detail in the
subsequent “Brokerage Practices” section of this Brochure. At times, it may be appropriate to
allocate costs and expenses among Southpaw clients and certain non-client proprietary accounts
of Southpaw and its affiliates that benefit from the expenditure of such cost or expense. In these
instances, Southpaw will seek to allocate the cost or expense among such clients and proprietary
accounts in its discretion in a fair and equitable manner. Subject to certain agreed caps, clients
generally bear all organizational costs, either directly or by reimbursing Southpaw or an affiliate.
These costs may be amortized over a certain time period as described in the relevant governing
documents. Although investors in our private fund clients who are affiliated with our firm do not
pay management fees or performance-based compensation, they do pay their pro rata share of
our private fund clients’ operating costs.

We generally do not permit investors in our private fund clients to withdraw capital other than at
the end of a quarter, so refunds of prepaid fees for partial quarters are not applicable to investors
in our private fund clients. We assess investors that contribute capital on a date other than the
beginning of a quarter a pro-rated management fee based on the amount of time that the capital
will be invested during the quarter. Withdrawals of capital from a private fund may be subject to
a 3% redemption fee, payable to the affected private fund, for redemptions made in less than
12 months after capital is contributed, as well as for redemptions made as of the first and third
quarter-ends of each year. The private funds maintain the discretion to waive or modify the 3%
redemption fee. Clients and investors are encouraged to review the applicable governing
documents for a detailed description of fees and expenses applicable to the specific Southpaw
client.

Item 7: Types of Clients
Our firm provides investment advisory services to our private fund clients, which generally
require a minimum initial investment of $1 million per investor. This Brochure is not an offer to
invest in our private funds. Any offer to invest in our private funds will only be made through the
provision of their confidential offering documents. Our private funds are not registered under the
Securities Act of 1933 or the Investment Company Act of 1940.

We could manage separate accounts in the future, particularly when an institutional investor is
seeking management of a sufficiently large pool of assets. Requirements for opening or
maintaining such accounts are individually negotiated on a case-by-case basis and will vary
depending upon the capital invested, liquidity, investment strategy and agreed upon fees, among
other things. We may manage separate accounts in ways that are similar to our private fund
clients, in ways that are substantially different, or in other ways.