Balmoral Management II LP

ITEM 5 - FEES AND COMPENSATION

        Each General Partner receives a management fee and a carried interest in connection with
its advisory services. Each General Partner or other Balmoral entities or affiliates receive
additional compensation in connection with management and other services performed for
portfolio companies of the Private Investment Funds and such additional compensation may offset
in whole or in part the management fees otherwise payable to the General Partner. Investors in the
Private Investment Funds also bear certain fund expenses, which are outlined in each Fund’s
Offering Documents and should be read carefully prior to investing.

Management Fees

          Each Fund pays its General Partner a management fee based upon committed or invested
capital (as described within each of the Private Fund’s offering documents) during the investment
period (generally, five years) and based upon invested capital thereafter. The General Partner is
entitled to collect its management fee from the Funds at the beginning of each calendar quarter.
However, as defined in each Fund’s Offering Documents, the General Partners have the sole
discretion to, and do, exempt certain investors in the Private Investment Funds from having to pay
all or a portion of the management fees and/or carried interest. Such investors usually include but are
not limited to the General Partners, and affiliates, officers, directors, and employees of Balmoral
Management that are invested in the Private Investment Funds. However, the General Partners can,

 and have, extended the exemption to non-affiliated investors in the Private Investments Funds.
 Any exemption from fees and/or carried interest is permitted to be made by a direct exemption, a
 rebate by Balmoral Management and/or its affiliates, or through other Private Investment Funds
 which co-invest with the Private Investment Funds.

         As permitted under the BSSF III partnership agreement, BM III has elected to waive the
 management fee it charges to BSSF III in an amount equal to 35% of the commitment of the
 general partner (BM III). Such waived portion of the management fee reduces the amount of capital
 BM III would otherwise be required to contribute to BSSF III. The limited partners of BSSF III
 are required to make pro rata contributions according to their respective commitments to fund any
 such contribution that would otherwise be required of BM III in connection with such waiver.

        While a waiver of management fees charged by BM IV is permitted under the BSSF IV
 partnership agreement, BM IV has elected not to waive such fees. In addition, the General Partner
 of BSSF IV has entered into arrangements with certain investors to only charge management fees
 on a certain percentage of their commitments instead of the full amount. The General Partner also
 has implemented different carried interest arrangements with certain investors that have made large
 commitments to BSSF IV.

        In connection with a transaction involving BSSF III (from time to time the “Existing
 Fund”), BSSF III investors were offered the opportunity to roll into the firm’s affiliated private
 fund, BCP, (“Rollover Investors”) or cash out their interests. Please see Item 10 (Other Financial
 Industry Activities and Affiliations) for additional information regarding this offering. All
 investors in BSSF III are provided with a detailed written disclosure statement outlining terms and
 conditions of this offering.

         With respect to rolled interests and any related incremental capital commitments, Rollover
 Investors will be subject to management fee and carried interest terms that are substantially similar
 to those applicable to their interests in the Existing Fund. The value of any rolled interest is
 determined net of accrued carried interest attributable to BSSF III, and distributions with respect
 to such net rolled interests are not subject to additional carried interest above such rollover value.
 Any incremental capital contributions must be returned before carried interest is assessed on those
 amounts.

         Investors in Existing Fund remain subject to the management fees and any applicable
 management fee offsets, or other exemptions, associated with the Existing Fund in accordance
 with its governing documents.

         New investors in BCP (“New Investors”) are subject to management fees and carried
 interest in accordance with the governing documents of such fund, which may differ from the terms
 applicable to Rollover and Rollover Legacy Investors.

        Under the BCP partnership agreement, BCM and Balmoral Management have discretion
 to waive, reduce, or rebate all or any portion of the Management Fee..

Please refer to BCP offering documents for additional information regarding fees and conflicts of
interest.

       Management fees are payable in advance of the services rendered. If the advisory
agreement or a Fund is terminated before the end of the applicable period, management fees will
be charged on a pro rata basis through the date of termination and any fees paid in advance but not
earned will be refunded.

         The Management Fee received by the General Partners, or their affiliates, of each Fund is
generally reduced by a portion of: (i) directors’ fees, financial consulting fees, or advisory fees
paid to the General Partner or other Balmoral entities or affiliates with respect to any Fund
investment; (ii) transaction fees paid to the General Partner or other Balmoral entities or affiliates
with respect to any Fund investment; and (iii) break-up fees with respect to Fund transactions not
completed that are paid to the General Partner or other Balmoral entities or affiliates. The
remaining amount of such fees received by the applicable General Partner or other Balmoral
entities or affiliates without offset against the Management Fee are hereinafter referred to as
...

ITEM 7 - TYPES OF CLIENTS

        As outlined in Item 4, Balmoral Management provides investment advice to the Private
Investment Funds. The Private Investment Funds may include investment partnerships or other
investment entities formed under domestic or foreign laws and operated as exempt investment
pools under the Investment Company Act of 1940, as amended. The investors participating in
Private Investment Funds may include individuals, banks or thrift institutions, other investment
entities, pension and profit-sharing plans, trusts, estates or charitable organizations or other
corporations or business entities and may include, directly or indirectly, principals or other
employees of Balmoral Management and its affiliates.

        Each Private Investment Fund has a minimum investment amount for third-party investors,
and interests are offered and sold solely to qualified purchasers and/or accredited investors. Such
minimum investment amounts vary, are outlined in each Fund’s respective Offering Documents
and may be waived by Balmoral Management.