Vatic Investments LLC

FEES AND COMPENSATION

Vatic or its affiliates may charge asset-based management fees. Such compensation is subject to negotiation
between Vatic and each client. In addition, Vatic (or an affiliate) may also receive a performance-based
allocation, as further described in “Performance-Based Fees and Side-by-Side Management” below.

Vatic may, in its sole discretion, waive, reduce, or otherwise modify the fees it charges to certain investors
(e.g., early-stage investors in a private fund), including Vatic’s affiliates and its and their members, officers,
directors and employees.

Other Fees and Expenses. Clients may incur other fees and expenses in connection with Vatic’s advisory
services. Fees are negotiated with each client and/or are otherwise set forth in a private fund’s governing
documents (as applicable). The operating expenses to be borne by a client will be subject to agreement with
the client, and generally may include (but are not necessarily limited to), as applicable: (i) brokerage fees
and commissions and other transaction costs and investment-related expenses incurred in connection with
the client’s or relevant private fund’s investment and trading activities; (ii) custody charges; (iii) any
interest, fees (including commitment fees), and costs of fund-related borrowings (including borrowings
related to positions held on margin); (iv) expenses and filing fees related to the ongoing offering of interests
in such relevant private funds; (v) routine operational costs such as printing and duplication expenses, legal,
accounting, director services, bookkeeping, recordkeeping, licensing fees and related support expenses for
order and execution management systems, treasury systems and/or risk management systems, shadow
accounting expenses, including licensing fees and expenses of managed services, auditing, consulting and
other professional expenses, administration (including the costs and expenses of the fund administrator,
including additional fees for ancillary services), clerical and tax preparation expenses; (vi) E&O, D&O,
cyber or any other form of insurance related to such relevant private funds and their management and
operations; (vii) exchange, board of trade or other trading or execution facility membership or participation
expenses; (viii) market data, price quote data and other data, including, but not limited to, research data and
alternate data, newswire and data processing expenses, cloud computing and cloud data storage fees and
expenses, and connectivity charges; (ix) fees and costs payable in connection with preparing and mailing
reports to investors in such relevant private funds; (x) compliance related fees and expenses, and fees and
expenses associated with preparing and submitting regulatory filings (e.g., expenses relating to the
preparation and filing of SEC Form PF, CFTC Form CPO-PQR and NFA Form PQR and the expenses
relating to such relevant private funds’ registration as an alternative investment fund manager for purposes
of and as defined in Directive 2011/61/EU of the European Parliament and of the Council of June 8, 2011
on Alternative Investment Fund Managers (AIFMD)); (xi) all other ordinary and out-of-pocket expenses of
such relevant private funds; (xii) all taxes (if any) imposed on any such relevant private fund (or that any
such relevant private fund is required to withhold or pay with respect to any of its investors), and fees
payable to governments or agencies; (xiii) annual registration fees; and (xiv) extraordinary expenses (e.g.,
litigation costs (including expenses incurred in connection with any settlement related to a portfolio
investment), indemnification obligations (including indemnification of any person indemnified under the
offering documents of such relevant private funds or any other agreements to which such relevant private
fund is party), expenses of registering such relevant private funds with any governmental agency under the
requirements of any applicable law, and costs incurred in connection with a reorganization or restructuring
of such relevant private funds), if any.

              PERFORMANCE BASED FEES AND SIDE-BY-SIDE MANAGEMENT

Vatic or its affiliates may charge performance-based compensation. Such compensation is subject to
negotiation between Vatic and each client.

Conflicts of Interest Related to Performance-Based Compensation and Varying Fee Rates. Vatic
and/or its affiliates may receive performance-based compensation as described above. Performance-based
compensation creates certain inherent conflicts of interest with respect to the management of assets.
Specifically, Vatic’s and its affiliates’ entitlement to performance-based compensation may create an
incentive for Vatic and its affiliates to take risks in managing assets that they would not otherwise take in
the absence of performance-based compensation.

Vatic’s investment advisory services may be provided to varied types of clients, including, for example,
private funds and/or separately managed accounts, certain of which may pay higher levels of compensation

to Vatic than others. This would give rise to a potential conflict of interest, since Vatic may have an
incentive to favor certain clients that pay higher amounts of performance-based or other compensation to
Vatic and/or its affiliates over other clients that pay lower amounts of such compensation, for example, by
seeking to direct more profitable investments to clients that are subject to more lucrative compensation
arrangements with Vatic or its affiliates. However, Vatic’s Code of Ethics prohibits the allocation of
investment opportunities based on anticipated compensation or profits to Vatic or its affiliates. For a
discussion of potential conflicts of interest that may exist, please see “Methods of Analysis, Investment
Strategies and Risk of Loss” and “Code of Ethics, Participation or Interest in Client Transactions” below.

TYPES OF CLIENTS

Vatic seeks to provide investment advisory services to private funds, but may seek to advise other clients
in the future. Vatic does not impose any minimum account size requirements, but may, in the future,
negotiate specific minimum investments and/or account size requirements in a client agreement or a private
fund’s governing documents, as applicable.

To the extent that Vatic provides investment advice to private funds, such funds typically rely upon the
exclusion from the definition of an “investment company” described in Section 3(c)(7) of the Investment
Company Act of 1940, as amended (the “1940 Act”). Accordingly Vatic generally limits such fund
investors to “qualified purchasers” as defined in Section 2(a)(51) of the 1940 Act.

         METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

Vatic typically deploys “statistical arbitrage” strategies, which attempt to profit from the application of
quantitative and statistical methods to a variety of datasets.

In implementing a statistical arbitrage strategy, historical price relationships are generally modeled with
statistical and mathematical techniques using historical data. The models will generally seek to profit from
pricing effects which may occur due to market reactions to relevant events, deviations from or occurrence
of certain statistical patterns, dislocations resulting from temporary imbalances of supply and demand, or
inefficiencies resulting from the behavior of other market participants. Positions are entered into when the
models indicate that there is an opportunity to profit from anticipated price movements. For example, the
strategy may result in the Vatic recommending/buying “long” securities that Vatic’s statistical analysis
indicates are underpriced, and recommending/selling “short” securities, that such analysis indicates are
expensive relative to their historic prices. Such strategies may be deployed across a wide range of markets
and instruments, and may be deployed with various forecast time horizons, depending on the underlying
market and instruments being evaluated, and these characteristics may change materially over time.

In implementing its strategies, Vatic may seek to hedge or limit directional and market exposure within a
portfolio. Vatic expects to trade primarily (whether directly or indirectly through other investment vehicles)
U.S. and international equity and equity-like securities (i.e., common stock, single stock swaps and ETFs).
In the future, Vatic may pursue futures-based or option-based strategies and may also trade such other
financial instruments or interests, including, but not limited to, “new issues,” options, other swaps and
futures contracts and such other financial instruments or interests as Vatic deems appropriate.

Certain Risk Factors.

The identification of attractive investment opportunities is difficult and involves a significant degree of
uncertainty. Potential clients should consider the following risks before engaging Vatic to manage their
accounts.

Changes in Trading Approach. Vatic may not follow one specific investment strategy, but rather, may
employ different trading strategies which it determines are consistent with a client’s investment objective.
Because Vatic may change a client’s allocation of assets among a variety of diverse investments and
strategies at any time, clients will be exposed to the risks associated with each of those investments and
strategies but will not know at the time of investment, or over the duration of their investment, the precise
nature of such exposure. An allocation to Vatic’s investment program therefore involves a high degree of
uncertainty and clients will be exposed to a significant degree of risk.

General Risks of Arbitrage Transactions. The success of arbitrage strategies (whether statistical arbitrage,
volatility arbitrage, capital structure arbitrage, or otherwise) depends often on the ability to execute two or
more simultaneous transactions at desired prices. Should such transactions not be executed simultaneously
at the desired prices, losses may be incurred on both sides of the transaction. Additionally, separate costs
are incurred on both sides of an arbitrage transaction, and substantial favorable price moves may be required
before a profit can be realized. There can be no assurances that the hedging and arbitrage strategies used
by Vatic will be successful. The market values of related financial instruments may not move in correlation
with each other or in ways anticipated by Vatic, and intervening events may cause hedged positions not to
perform as anticipated. A hedged position may perform less favorably in generally rising markets than an
unhedged position.

Statistical Arbitrage Strategies. A substantial portion of Vatic’s investments on behalf of its clients are
expected to be based on statistical arbitrage strategies. Statistical arbitrage strategies involve taking
advantage of historical price relationships between financial instruments. The price relationships are
generally simulated with statistical or other mathematical models constructed using historical data.
Positions are entered into when the models indicate that there is an opportunity to profit from anticipated
price movements.

The relative value and arbitrage markets in which Vatic’s clients are expected to participate, as well as the
other markets and strategies in which Vatic’s clients may participate, are extremely competitive. There can
be no assurance that Vatic will be able to identify or successfully pursue attractive investment opportunities
in this environment. Vatic’s investments for its clients are expected to involve substantially more company-
specific and market risk and associated volatility in the future than in the past, as arbitrage and similar
opportunities may be further reduced or eliminated. Vatic and its clients may compete with many firms
...