Tower Bay Asset Management LP

Item 5 - Fees and Compensation

Fees paid by the Municipal Bond Fund are calculated based on the total assets under
management as well as the net realized and unrealized appreciation in the net asset value of the
applicable assets under management and in accordance with the terms of the private placement
memorandum. Fees for other Private Funds offered may vary for each Private Fund.

Generally, a management fee is paid, in arrears, to Tower Bay equal to 1.50% annualized of the
opening capital account balance(s) of each investor in the Municipal Bond Fund. The
management fee is reduced to 1.25% for capital account balances equal to and in excess of $30
million dollars. The management fee equal to one-twelfth of the applicable annual management
fee percentage is calculated each month, based on the balance in each capital account as of the
first day of the month, but is debited from each capital account as of the last day of the month.
The management fee is pro-rated for partial periods. The capital account of the general partner
for the Municipal Bond Fund is not subject to the management fee.

Generally, at the end of each fiscal year for the Municipal Bond Fund, 15% of the excess of any
net capital appreciation allocated to each capital account investor in excess of the management
fee, is debited from such capital account for such year a n d reallocated to the Investment
Manager or the general partner to the Municipal Bond Fund, as applicable, as an incentive
fee/allocation (the “Incentive Fee/Allocation”). The incentive fee is reduced to 12.5% for such
capital account balances equal to and in excess of $30 million dollars and 10% for such capital
account balances equal to and in excess of $100 million dollars.

Fees are deducted from the Municipal Bond Fund account. Tower Bay does not accept
compensation or fees for the sale of securities or other investment products. Municipal Bond
Fund fees are not generally negotiable. However, with the consent of Tower Bay, fees for any
investor may be reduced, waived, or calculated differently including, without limitation, partners
or employees of Tower Bay, their respective immediate family members and trusts or other
vehicles established for the benefit of such persons.

Fees for Tower Bay Managed Accounts are negotiated on a case-by-case basis where applicable,
including management and/or incentive fees that could be charged for institutional Managed
Accounts. Generally, each Managed Account, in arrears, will pay a monthly or quarterly
management fee to Tower Bay equal to one-twelfth of the applicable management fee
percentage of the net asset value of the assets under management. Incentive fees can be charged
for any Managed Account and generally will be paid on an annual basis, if applicable.

Fees for the sub-advisory relationships are negotiated on a case-by-case basis. Tower Bay has
entered into sub-advisory agreements with the un-affiliated Private Funds and the UCITS funds.
In return for its sub-advisory services, Tower Bay receives a monthly or quarterly management
fee from the investment adviser based on assets under management subject to the terms of the

sub-advisory agreement. The sub-advisory agreements between Tower Bay and the investment
advisers may be terminated at any time

In addition to Tower Bay’s and/or the relevant affiliate’s fees, unless and to the extent otherwise
specified in the relevant Private Fund’s private placement memorandum, sub-advisory or
Managed Account agreements, investors will indirectly bear certain fees and expenses charged
to the Private Fund and any Managed Account. Such fees may vary and include, but not limited
to, the following: expenses of the offering of the Private Fund shares or interests; legal and
compliance fees and expenses; audit and accounting fees; insurance costs and expenses;
administrative, custodial and transaction fees; costs and commissions paid to custodians, broker-
dealers and other third parties; and investment and research related expenses, including
computer, newswire and quotation services and data processing charges. Private Fund and
Managed Account investors should review all fees charged by Tower Bay and its affiliates,
custodians, and broker-dealers and other third parties to fully understand the total amount of
fees to be paid by the Private Funds or Managed Account. Please also see Item 12 – Brokerage
Practices below.

Each eligible Private Fund and Managed Account will generally bear a pro rata portion (based on
aggregate net asset value) of applicable common investment-related expenses. Such common
operating expenses include research and analytic expenses (such as Bloomberg subscriptions) as
well as other related fees and charges. Such expenses are allocated pro rata to only the Private
Fund and Managed Account that utilize services related to those expenses.

Tower Bay may also enter individual consulting contracts and receive consulting fees. These fees
may vary in amount and paid at any time from the inception of the contract to the completion of
the consulting services.

Item 7 - Types of Clients

Tower Bay will provide investment advisory services for institutions and on a sub-advisory basis.
Private Fund interests are offered to certain qualified investors in a “private offering” (i.e., one
that is not open to the public). The Private Funds are institutional vehicles whose investor base
is limited to qualified investors who meet the definition of an “accredited investor” under Rule
501 of Regulation D of the Securities Act.

Both Private Funds and Managed Accounts are offered to both U.S. and non-U.S. investors that
generally include, but not limited to, corporations and other business entities, endowments,
foundations, and other charitable organizations, fund of funds, high net worth individuals,
insurance companies, investment partnerships, pension, and profit-sharing plans, trusts and
estates, broker dealers, investment advisers and other financial institutions.

Tower Bay’s consulting arrangements are generally applicable to corporations or other
institutional Clients.

Tower Bay negotiates separately with each Client regarding minimum account size.