154 Partners Investment Management LLC

Item 5 – Fees and Compensation

General

The Governing Documents of each of the Funds detail the fees and compensation terms
relevant to each Fund. 154 Partners and/or its affiliated General Partners generally receive
fees and compensation in exchange for advisory services provided to the Funds, including
management fees, carried interest, and in certain cases, additional compensation in
connection with services performed for the portfolio investments of the Funds.

Certain Co-Investment Funds are subject to fees and compensation, while others are not,
subject to the terms under the relevant Governing Documents of such Co-Investment
Funds.

154 Partners generally receives reimbursements from portfolio investments for certain
expenses advanced on their behalf.

The Funds are also responsible for bearing certain expenses as detailed below and in each
Fund’s Governing Documents. Differences exist from Fund to Fund, and certain Funds do
not charge certain fees, compensation or expenses that other Funds charge or charge them
in different amounts. The following is a general description of fees, compensation and
expenses of the Funds. Investors should refer to the Governing Documents of the
applicable Fund for a complete understanding of how 154 Partners is compensated for its
advisory services; the information contained herein is a summary only and is qualified in its
entirety by such documents.

Management Fees

154 Partners charges certain Funds a management fee (the “Management Fee”), generally
2% per annum of (a) each investor’s commitments or (b) each investor’s net invested capital.
Specifically, in certain Funds Management Fees are initially charged at 2% per annum of
each investor’s capital commitments for the investment period (as defined in the relevant
Fund’s Governing Documents); thereafter, the Management Fee is equal to 2% per annum
of each investor’s net invested capital.

The amount of Management Fees generally will not correspond with fluctuations in the net
asset value of individual investments, aggregate investments in a portfolio investment or of
a Fund, including following the stepdown date, and will not be reduced in connection with
any write-downs, except in the case of investments that have been permanently written
down. Permanent write-down determinations are made in the discretion of the valuation
committee in accordance with the relevant Governing Documents and the Firm’s valuation
policy. In most circumstances, the post-investment period stepdown Management Fee

base will include capitalized transaction-specific fees and expenses of unrealized
investments, including transaction fees charged by 154 Partners in connection with the
investment, which poses a conflict of interest in that the inclusion of such fees and expenses
results in a higher Management Fee than if such transaction fees and expenses were not
capitalized into the asset base.

The Management Fee will typically accrue from (a) the date of the initial closing of capital in
the respective Fund or (b) the date in which the respective Fund makes an investment.
Assessed generally quarterly in advance, Management Fees are collected by the Funds
through a capital call from investors, through a draw-down on the Fund’s line of credit (if
applicable) or netted against a distribution to investors. All Management Fees were
negotiated with investors during the fundraising period of the applicable Fund and are not
subject to negotiation thereafter. Generally, investors participating in a subsequent closing
after the initial closing of a Fund are responsible for paying the Management Fee as of the
date of the initial closing of such Fund, plus interest, as applicable. In addition, Management
Fees are generally payable during term extensions unless otherwise notified to investors. In
the event that 154 Partners does not provide services for a full period, or if the Funds are
liquidated according to the terms set out in each Funds Governing Documents before the
end of the relevant period, a pro-rated fee will be charged for the number of days elapsed
in such period (or in instances where Management Fees are billed in advance, the excess
Management Fee returned to the Investors of the Funds).

The General Partners and 154 Partners are permitted, in their sole discretion, to reduce or
waive all or a portion of the Management Fee. Management Fee terms can differ from one
Fund to another as well as among investors in the same Fund. Such differences can arise
from the size of an investor’s commitment to a Fund, provisions of side letter agreements or
other negotiated terms. Management Fees, in certain instances, are waived for 154 Partners
personnel investing in a Fund (either as direct investors or through a General Partner),
affiliates, Operating Advisors (as defined in the “Operating Advisor Fees and Expenses        ”
section below) and their respective families investing in a Fund (although in each case, these
investors generally pay their pro rata share of certain Fund expenses). Similarly, investors in
a Co-Investment Fund generally pay a reduced Management Fee or none at all on the co-
investment portion of their investment (although such co-investors generally pay
Management Fees on the main Fund portion of their investment, if applicable, and pay their
pro rata share of certain expenses as described more fully below).

Management Fees paid by a Fund will generally be reduced by (i) costs paid by a Fund in
connection with the organization of a Fund that exceed a limit as specified in such Fund’s
Governing Documents and (ii) certain supplemental fees and compensation with respect to
services performed for portfolio investments, including investment banking fees, advisory
fees, monitoring fees, directors’ fees, break-up fees, portfolio investment director fees or

other similar fees and any material non-cash compensation (e.g. , options) (together,
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Item 7 – Types of Clients

154 Partners provides investment advice to its Funds, which are exempt from registration
under the Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder (the “Investment Company Act”). The Funds limit their respective
investors to: (i) “accredited investors” as defined in the Securities Act of 1933 (“Securities
Act”), and (ii) “qualified purchasers” or “knowledgeable employees,” each as defined in the
Investment Company Act. Investors in the Funds must also meet certain other suitability
qualifications prior to making an investment in a Fund. The Funds are not registered or
required to be registered under the Investment Company Act, are not made available to the
general public, their securities are not registered or required to be registered under the
Securities Act and Fund interests are privately placed to qualified investors. Qualified
investors include individuals or entities to which Fund interests are permitted to be sold,
which generally includes (i) in the United States, people or organizations who meet certain
net worth, income and/or financial sophistication requirements as described above or (ii) in
other countries, as permitted by the relevant securities laws in such jurisdiction and in
compliance with any foreign offering provisions applicable to 154 Partners and/or the
Funds. Details on applicable investor suitability and criteria are included the respective
Fund’s Governing Documents.

The Funds typically require capital commitments from each investor of at least $10 million,
depending on the Fund, although the applicable Fund’s General Partner has, in its sole
discretion, the right to reduce the minimum capital commitment for investors and has
accepted lesser amounts.         Details on applicable investor minimum investment
commitments are included in the respective Fund’s Governing Documents.

The investors participating in the Funds generally include high net worth individuals, other
investment entities, family offices, trusts, estates or charitable organizations, not for profits,
foundations, fund of funds, corporations, limited partnerships, limited liability companies or
other business entities, Operating Advisors or other service providers retained by 154
Partners, and typically include, directly or indirectly, principals or other employees of 154
Partners and its affiliates and members of their families.

On occasion, 154 Partners offers co-investment opportunities for certain investors to invest
alongside a Fund in certain Fund portfolio investments. As referenced in Item 4 above, co-
investments have been structured either as (i) a separate Co-Investment Fund or (ii) a direct
investment by certain investors into a portfolio investment or its holding or operating
company. When structured as a Co-Investment Fund, 154 Partners considers the
investment to be a Fund client, identifies the Fund in its Form ADV Part 1, Schedule D, Section
7.B.(1), obtains an audit for the Fund, reserves the option to assess a Management Fee and
Carried Interest on such Fund and includes the amount of assets of such Co-Investment

Fund in the Firm’s regulatory assets under management. In the case of direct co-
investments, 154 Partners does not consider the investment to be a Fund or a client, does
not act as the investment manager to the co-investment portion of the investment, does
not charge Management Fees or Carried Interest to the investment, does not have custody
of the investment or include the amount of assets of the co-investment in the Firm’s
regulatory assets under management. In such direct co-investment opportunities, 154
Partners will perform management, advisory and other services for the portfolio
investments in which these co-investors invest, generally at no cost to such co-investors
except portfolio investment fees and expenses (which such fees and expenses are
recorded at the portfolio investment).

Opportunities to participate in co-investment transactions arise when 154 Partners has the
opportunity for an investment in an existing or prospective portfolio investment and 154
Partners determines that (i) an investment requires additional capital, (ii) all or a portion of the
applicable opportunity is not required to be offered to a Fund, (iii) the full investment
opportunity is not appropriate for a Fund, whether due to concentration restrictions
contained in the Fund’s Governing Documents or otherwise or (iv) 154 Partners believes the
Fund will benefit from the participation of the co-investor(s). Such determinations are
based on the provisions of the applicable Governing Documents, side letter agreements,
agreements with lenders and such other factors as 154 Partners will consider in its sole
discretion, including those specified in its policies on investment allocation and co-
investments. Subject to any restrictions contained in the Governing Documents of the
relevant Fund or any side letter or other terms negotiated with respect to such Fund, in
general no investor has the right to participate in any co-investment opportunity. 154
Partners’ exercise of discretion in allocating co-investment opportunities will not always
result in proportional allocations among co-investors and such allocations can be more or
less advantageous to some co-investors relative to other co-investors. When co-
investment opportunities are permitted, it is possible that the size of the investment
opportunity otherwise available to the Fund will be less than it would otherwise have been
without the inclusion of such co-investors.

154 Partners will select the investors that are permitted to co-invest in a particular portfolio
investment in its sole discretion based on various factors, including those detailed in its
Governing Documents and as outlined in its internal policies and procedures. While one or
more limited partners in the Funds are on occasion invited to co-invest in a Fund’s portfolio
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