Capital Partners Holdings Inc

Item 5 – Fees and Compensation
Fees

The terms of the limited partnership agreements generally entitle us to management fees and/or
performance-based compensation from our clients. The Funds generally pay us management fees quarterly
in advance in an amount equal to 2% of the capital commitment of each investor in the Fund (except for the
General Partner and its affiliates) until the end of such Fund’s commitment period and, thereafter, 2% per
year on such investor’s share of the cost basis of portfolio investments then held by the Fund, less any write-
offs (management fees generally step down further during any extension periods). The management fees
we receive from the Funds are subject to reduction in proportion to certain fees we receive from the portfolio
companies in which the Funds are invested.

Per the terms of the limited partnership agreements, we are also entitled to receive performance-based
compensation from the Funds in the form of a carried interest equal to 20% of distributions in excess of (i)
capital contributed in respect of each portfolio investment that has been disposed of at the time of
distribution, (ii) capital contributed for management fees and entity expenses and (iii) a preferred return of
8% per annum, compounded annually on the foregoing amounts. The carried interest is subject to a claw
back. The above is a simplified explanation; please review the applicable Fund’s offering documents for
full details.

The fees described above represent our typical compensation rates. However, we may enter into negotiated
agreements with one or more investors which provide for the waiver or modification of certain terms of the
offering of Fund interests, or certain rights and obligations of investors, including fees, otherwise applicable
to such interest(s). Further detail regarding calculation of the Funds’ fees can be found in the Funds’ offering
documents, including limited partnership agreements, which are provided to potential investors.

Generally, co-investment vehicles do not pay management fees, although the portfolio companies in which
they invest may compensate Capital Partners as discussed in the next paragraph. Investors in co-investment
vehicles are subject to performance-based compensation similar to that of the Funds as outlined above.

In addition to fees and compensation received from our clients, we also generally receive fees from the
companies in which our clients invest in exchange for the management, financial and industry expertise we
provide. This fee is based on a percentage of earnings before a reduction for interest, income taxes,
depreciation and amortization; a portion of this fee is generally used to partially or wholly offset the
management fees payable by the Funds. Please review the applicable offering documents for full details.

Expenses

The Funds bear the organizational and offering expenses incurred in their formation. We bear the cost of
any placement fees payable to agents in connection with the Funds. We are responsible for all customary
overhead expenses of managing the applicable Fund, including compensation for its employees, rent,
utilities and other overhead expenses. The Funds pay or reimburse us for all of their expenses for which we
are not reimbursed by portfolio companies, including expenses associated with financial statements, tax
returns and K-1’s; fees and expenses of accountants, valuation consultants and counsel; expenses for
transactions not consummated; other expenses associated with the acquisition, holding and disposition of
investments, including extraordinary expenses (such as litigation costs); costs and expenses associated with
the Funds’ advisory boards (the “Advisory Boards”) and the annual meeting; the cost of insurance,
including errors and omissions insurance; and any taxes, fees or other governmental charges.

Item 7 – Types of Clients
Our clients are the Funds and the co-investment vehicles. The minimum amount which may be committed
to a Fund is one million dollars, although the general partner of each of the Funds may accept lesser amounts
in its discretion. The Funds’ investors are typically high net worth individuals, institutional investors and
pension plans, insurance companies, endowments and foundations. Investors in the co-investment vehicles
are usually the same or similar investors in the Funds (including members of our investment team).