Axial Reade Capital LP

Item 5: Fees and Compensation

The Firm typically receives compensation from Clients based on a percentage of assets managed,
and compensation based on performance, referred to below as “carried interest.” The Firm or other
Firm entities or affiliates receive additional compensation in connection with management and
other services performed for Portfolio Companies of the Funds and such additional compensation
will offset in whole or in part the Management Fees (as defined below) otherwise payable to the
Firm to the extent provided by the Governing Documents.

Investors in the Firm’s Funds generally pay a management fee (the “Management Fee”) on an
annual basis to the Firm or its designated affiliate, equal to a percentage of aggregate investor
capital commitments (“Commitments”), payable on a quarterly basis in advance. Investors
participating in a closing after a Fund’s initial closing date bear the Management Fee from the
initial closing date, generally in addition to an interest component payable to the Firm or an
affiliate. Management Fees are paid by the Fund from its available assets and from capital
contributions made by its Investors, and such fees are deducted directly from each Investor’s
capital account. Upon a date specified in the Governing Documents (the “Stepdown Date”), the
Management Fee will be reduced and will equal a percentage of (a) the portion of aggregate funded
Commitments used to make investments with respect to investments that have not been disposed
of, as reduced by (b) permanent write downs with respect to such investments. With respect to
Allegiance Partners A, LP and Allegiance Partners B, LP (“Fund I”), such portion of the
Management Fee is permitted to be collected as fees from Portfolio Companies without offset to
Fund I. The Management Fee will be payable until proceeds from all portfolio investments are
distributed or until the Firm’s relationship with the relevant Fund is terminated for other reasons
(as described in the Governing Documents). As a general matter, Management Fees will be
payable during term extensions unless otherwise agreed with investors.

As is generally the case in private equity funds, the Governing Documents provide that a Fund’s
Management Fees will be calculated and charged on a basis that generally is not tied to the Fund’s
then-current net asset value. As further specified in the Governing Documents, from the effective
date of the relevant Fund until the Stepdown Date, Management Fees generally will be charged
based on a formula tied to the amount of the relevant Fund’s aggregate Commitments. Further,
after the Stepdown Date, Management Fees generally will be charged and calculated based on a

Axial Reade Capital, LP                                                   Form ADV Part 2A Brochure

formula tied to the amount of investment contributions (including, where applicable, a Fund
borrowing component (including interest expenses) and the amount of any capitalized Transaction
Fees (as defined below) or expenses) made by the relevant Fund relating to the Fund’s aggregate
investment(s) in its Portfolio Companies that have not been realized or permanently written down
(such permanently written-down investments, “Impaired Value Investments”). Due to
differences in the criteria set forth in their respective Governing Documents, in the event where
more than one Fund participates in an investment, there is the possibility that an investment will
become an Impaired Value Investment for purposes of one Fund’s Governing Documents but not
those of one or more other Funds.

Under the Governing Documents, where the fair market value of an investment exceeds the total
amount of investment contributions relating to such investment, post-Stepdown Date Management
Fees will not be calculated based upon such appreciated value, and will instead continue to be
calculated based on the amount of applicable investment contributions. Conversely, the Governing
Documents do not require Management Fees to be reduced or refunded following the occurrence
of a writedown, decrease (including a significant decrease) in fair value or other event not
constituting a complete realization, such as a partial sale or disposition, reorganization,
recapitalization (including recapitalizations involving dividends), roll-over investment in
connection with a sale or dividend distribution, except in the case of investments meeting the
relevant Impaired Value Investment standard under the Governing Documents. For the avoidance
of doubt, following the Stepdown Date, if the fair market value of an Impaired Value Investment
is less than the total amount of investment contributions relating to such Impaired Value
Investment, then the amount of Management Fees otherwise payable relating to such investment
will be reduced solely to the extent the fair market value of each relevant remaining investment(s)
is less than the amount of total investment contributions relating to such investment(s) as of the
date of the relevant event.

As a result, and as is generally the case for private equity funds, the amount of Management Fees
generally will not correspond with fluctuations in the net asset value of individual investments or
of a Fund, including following the relevant investment period, and will not be reduced in
connection with any write downs (whether temporary or permanent), except in the case of Impaired
Value Investments. Except where the Governing Documents expressly provide to the contrary,
Management Fees will not be reduced (in whole or in part) in the case of certain partial sales or
dispositions, distributions (e.g., those resulting from a dividend recapitalization) or
reorganizations, restructurings, roll-over investments, extraordinary dividends or similar
transactions or in circumstances where one or more other Fund(s) divest their respective
investment(s) (including credit investments) in the relevant Portfolio Company, whether in whole
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Item 7: Types of Clients

Our Clients are our Funds, as described in Item 4 above, and the Funds are generally open to
Investors that are institutions, high net-worth individuals, financially sophisticated individuals, and
other sophisticated investors.