Westcliff Capital Management LLC

FEES AND COMPENSATION

Funds. Each Fund pays us a “management fee” generally calculated at a rate of 1.5% per annum (or,
as to the WAM Partnerships, 2% per annum) of the balance of each investor’s capital account or, as
to the Offshore Fund, the value of the shares held by each investor of that Fund. The Funds pay this
fee quarterly based on the net asset value of investors’ investments as of the relevant quarterly
measurement time. Some Funds pay this fee in advance, some in arrears. The Funds pay a prorated
fee for capital contributed as of a date other than the first day of a quarter.

We also generally receive from each Partnership of which WCM is the general partner a
performance-based special allocation of net profit (a “Performance Allocation”) equal to 20% of the
net profit (including both realized and unrealized gains and losses) that would otherwise be
allocated to each investor, but only to the extent net profits exceed any cumulative losses that have
not previously been recovered (a “high water mark”). However, as to one Partnership Fund, which
seeks current income, the Performance Allocation is 10% of net profits in excess of a specified
“hurdle” return, and certain investors in another of the Partnership Funds are not subject to a
Performance Allocation but instead are charged only an annual asset-based fee or an annual asset-
based allocation of profit..

WCM Cayman receives a Performance Allocation as to the Cayman Feeder Funds indirectly, through
their respective investments in the master fund. As to one of those Feeder Funds the Performance
Allocation is at the 20% rate as described above and as to the other the Performance Allocation is
25% of net profits in excess of a specified “hurdle” return.

As to the WAM Partnerships, WAM is generally entitled to a Performance Allocation equal to 20% of
net profit allocated to each investor up to the amount of net profit that constitutes a cumulative
50% annualized rate of return and 40% of net profit allocated to each investor in excess of that rate
of return, also subject to a high water mark procedure and to a “clawback” procedure upon the
relevant Fund’s termination.

Performance Allocations are generally made on an annual basis. If an investor were to withdraw
capital or redeem shares as of a time other than as of the end of a calendar year, we (or the relevant
affiliated) would receive a partial Performance Allocation as of the time of that withdrawal or
redemption, in proportion to the reduction in that investor’s investment caused by the withdrawal
or redemption. The WAM Partnerships do not permit periodic withdrawals, and the Performance
Allocations they make are subject to reduction or reversal in some circumstances upon the relevant
Partnership’s dissolution and winding up.

Fees paid by Funds and Performance Allocations are not generally negotiable, but our agreements
with the Funds give us the authority to vary them for particular investors.

The Funds pay our fees directly from their assets that we manage. Performance Allocations take
the form of increases in the value of our or our affiliates’ general partner interest in those Funds.

Separate Accounts. For managing a Separate Account, we generally receive an annual fee equal to
1% per annum of the net asset value of the Separate Account, payable as of the beginning or as of
the end of each calendar quarter (depending on the relevant investment management agreement).
The fees a Separate Account client pays Westcliff are negotiated on a client-by-client basis.

Other Fees and Expenses. Each Fund pays all the expenses of its administration and operation,
including those for: brokerage commissions and other transaction-related services (see “Brokerage
Practices” below); bookkeeping, accounting, auditing and other professional fees and expenses;
legal; research and due diligence; governmental fees and taxes; telephone; reporting; governance;
preparation, duplication and distribution to investors and prospective investors of offering
documents, annual reports and other financial information; and similar ongoing operational
expenses. Each Fund bore certain costs in connection with its organization and the initial offering
and sale of ownership interests in it and continues to bear the costs of its ongoing offering of those
ownership interests.

We may advance costs described above for a Fund and the Fund must reimburse us.

Separate account clients bear expenses of their investment and trading activities, including
brokerage commissions and other transaction-related costs. They also bear their own custodial
costs.

We provide office personnel and space required for the performance of our services for the Funds.
The Funds do not reimburse us for doing so (except to the extent of our fees and incentive
allocations).

The Funds do not currently pay custodial fees directly. Their assets are held by “prime brokers” as
custodians. The Funds may be considered to pay for custodial services indirectly through:
payments to the prime brokers of commissions and other transaction costs; payments of financing
charges related to margin borrowings and stock loans; and the prime brokers’ ability to earn money
on certain balances the Funds maintain with them (subject to laws and regulations governing their
activities).

Prepayment of Fees. Some of the Funds pay management fees quarterly in advance. Investors in
Funds other than the WAM Partnerships are generally allowed to withdraw capital as of the end of
a calendar quarter, at which time there generally will be no prepaid fees. We are not required to
refund any portion of our management fee to a Fund if that Fund allows an investor to withdraw as
of a time other than a calendar quarter-end.

Other Compensation. We do not and our personnel do not accept compensation for the sale of
securities or other investment products.

                PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT
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TYPES OF CLIENTS

We provide investment advice to the Funds and to separate accounts, generally owned by
institutions, professional investors, or large companies. The Funds are privately-offered
investment funds that are not regulated under the U.S. Investment Company Act of 1940, as
amended (the “Investment Company Act”) because of Section 3(c)(1) or Section 3(c)(7) of that act.
Each Fund imposes minimum investor qualification standards and minimum investment
requirements.

            METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

Methods and Strategies, Generally

We primarily manage accounts and Funds in two broad categories: (i) those that invest and trade
primarily in publicly traded securities (“Public Market Accounts”); and (ii) those that pursue
specialized “venture-style” investing, focusing on investments in venture-stage and startup
companies, privately-placed projects, and special situations, all particularly focused on businesses
related to energy (“Venture-Style Accounts”). In 2011 we began managing a Fund that seeks current
interest or dividend income (the “Yield Fund”).

Public Market Accounts. In our public-markets Funds and accounts, we seek to identify companies
that are experiencing a sustainable change in their operating profitability above or below what is
expected by the market. We believe that: companies reporting earnings higher than expected
(“earnings surprises”) tend to appreciate as securities analysts and investors raise their forecasts of
future profits; and if the expectations of a company remain low and the company continues to
provide earnings surprises, its stock will continue to appreciate until a new equilibrium has been
reached, fully discounting the new information. We analyze the fundamentals of companies
reporting earnings surprises, seeking to identify companies that have had substantial changes in
their business operations that are not yet recognized by the market and to buy stocks of companies
that are in the early stages of a higher trend in profitability. Similarly we try to identify and sell
short stock of companies we believe are in the early stages of a lower trend in profitability. In some
accounts we buy stocks on margin. Public Market Accounts may also engage in short-term trading,
including day trading, in response to earnings surprises, estimate revisions or dramatic short-term
price changes, or other factors, may trade in options or other derivatives, and may engage in
hedging or opportunistic opportunities using exchange traded funds (“ETFs”) and index-related
instruments, among other techniques.

Venture-style Accounts. These currently consist of the three WAM Partnerships, which invest in
specialized energy-related opportunities, including private, development stage companies. WAM is
the general partner of these Funds.

Yield Fund. This Fund seeks to generate high current interest or dividend income, primarily
through buying and holding shares of a small number of closed-end investment companies that
invest primarily in high yield bonds or in convertible securities or equity securities that have a high
dividend yield.

 INVESTING IN SECURITIES INVOLVES A RISK OF LOSS THAT CLIENTS AND INVESTORS SHOULD BE
                                  PREPARED TO BEAR.

                                   Material Risks of Our Strategies

The following summarizes some of the material risks associated with our investment activities. It
does not attempt to describe all of the risks associated with those activities; no summary can be
complete.

Public Market Accounts.

Investment Selection; Reliance on Mr. Spencer. We believe the primary risk of our investment
strategy relates to investment selection – the risk that our techniques may result in selections of
securities or positions that, at least over certain periods, decline in value or do not appreciate as
much as alternative investment opportunities. Our investment advice depends on the judgment
and analysis of Mr. Spencer. Should Mr. Spencer terminate his relationship with us, die or become
otherwise incapacitated for any extended period, the Funds’ investments could suffer.

General Economic and Market Conditions. The success of a Fund’s investments may be affected by
global, national and local economic and market conditions, such as interest rates, availability of
credit, inflation rates, economic uncertainty, changes in laws, developments in governmental
regulation and national and international political circumstances. These factors may affect the
success of the businesses in which a Fund’s portfolio companies are engaged as well as the markets
for the securities a Fund holds. Unexpected volatility or illiquidity could impair a Fund’s
profitability or result in losses.

Small Capitalization Stocks. We invest a significant portion of each account’s assets in stocks of
companies with relatively small market capitalizations. The capitalization range of portfolio
companies varies among Funds and accounts based on investment objectives, but small-
capitalization stocks are a meaningful part of all portfolios. These stocks can involve higher risks
than stocks of larger companies. For example, prices of small-capitalization and even some
medium-capitalization stocks are often more volatile than prices of large-capitalization stocks and
the risk of bankruptcy or insolvency of many smaller companies (with the attendant losses to
investors) may be higher than for larger, “blue-chip” companies. In addition, thin trading in some
small-capitalization stocks may make an investment in those stocks less liquid.

Short Selling. We may sell securities short as a regular part of our investing activities. In a short
sale, the client sells securities it does not own, in the hope that the market price will decline and
that the client will be able to buy replacement securities later at a lower price. To accomplish this,
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