Castle Harlan Inc

ITEM 5: FEES AND COMPENSATION

                The management fees and performance-based compensation applicable to each
Fund are set forth in detail in each Fund’s governing documents. Generally, each Fund’s limited
partners pay the Advisers (except for those limited partners of BAF GP Corp. and CH Capital
Group) a fee for investment management services (a “Management Fee”). The Fund’s General
Partner generally has the opportunity to earn a performance-based carried interest after the
limited partners of the Fund realize a hurdle rate of return on their investments (the “Carried
Interest”), as more fully described below.

               In the discretion of the Advisers and each General Partner, the Management Fee
and/or Carried Interest payable by a Fund may be waived, reduced, or calculated differently
with respect to certain limited partners in such Fund, including the limited partners affiliated
with the Advisers.

Management Fees and Portfolio Fees

                Generally, the limited partners of each Fund pay the Advisers (except for those
limited partners of BAF GP Corp. and CH Capital Group) annual Management Fees ranging
from 1.5% to 2.0% of a Fund’s limited partner capital commitments until the end of the
investment period. After a Fund’s investment period, the limited partners generally pay annual
Management Fees ranging from 1.0% to 2.0% of either the invested capital of the Fund or the
fair value of the Fund’s assets.

               The Advisers also receive fees such as monitoring and advisory fees from the
respective Funds’ portfolio companies, and may receive break-up, termination, and other
similar fees in connection with the sale of portfolio companies (collectively the “Portfolio
Fees”). Subject to the terms of each Fund’s limited partnership agreement, the limited partners’
Management Fees are generally credited for 50% to 100% of the Portfolio Fees collected.

               With respect to Funds managed by Castle Harlan, Management Fees, net of the
reductions for Portfolio Fees collected, are billed to limited partners twice per year, are
collected less than six months in advance, and are not refundable. The Management Fee
charged to those limited partners in Funds managed by Castle Harlan is in addition to their
capital commitments.

               For example, with respect to CHP V, as set forth in Section 7.2(a) of the CHP
V limited partnership agreement, Castle Harlan reduces Management Fees by an amount equal
to each limited partner's pro rata share (based on capital commitments of all partners) of
applicable Fee Income (as that term is defined in Section 1.1 of the CHP V limited partnership
agreement), including 80% of CHP V's pro rata share of Portfolio Fees, with respect to the
period from the preceding Management Fee payment date through the current Management
Fee payment date. Accordingly, if a portfolio company were to prepay Portfolio Fees for one
year of Castle Harlan's services, the portion of those Portfolio Fees paid with respect to the
semi-annual period in which they were received by Castle Harlan will be applied to reduce
Management Fees for the next semi-annual period, and portions paid with respect to future
semi-annual periods will be applied to reduce Management Fees with respect to the
corresponding subsequent semi-annual periods.

              With respect to the Funds managed by Branford Castle, Management Fees are
payable in quarterly installments in advance and are deducted from the limited partners’
remaining capital commitments.

             Branford Castle, in its sole and absolute discretion, may pay all or any portion
of the Management Fee to its affiliates or other third parties, including certain limited partners.

                For additional information regarding Management Fees and Portfolio Fees,
please refer to the relevant Fund's governing documents.

Carried Interest

                Each Fund’s General Partner, which is an affiliate of the Advisers, invests
alongside the Fund’s limited partners and participates in the net realized gains from
investments. Generally, after returning capital contributions and Management Fees to limited
partners, net realized gains on investments are shared pro rata by all Fund partners until a hurdle
rate is realized, which is typically a compound annual rate of return of 8% on the Fund’s
investments. Provided that the limited partners of the Fund have achieved the hurdle rate, the
General Partner typically receives a Carried Interest in an amount up to 20% of the total amount
of net realized gains distributed. From time to time, Carried Interest may be paid by a Fund to
the General Partner, generally at the time of the sale of investments, provided that the hurdle
rate has been met based on the cumulative amount of cash distributed by such Fund and the
then-current fair value of such Fund’s unrealized investments.

                 The governing documents of each Fund contain “claw back” provisions with
respect to the Carried Interest. Upon termination of a Fund, the Fund’s General Partner is
generally required to return to the Fund distributions of Carried Interest previously received to
the extent that they exceed the amounts that should have been distributed to the General Partner
as Carried Interest on an aggregate basis covering all transactions of the Fund. The General
Partner is not required to return more than the cumulative Carried Interest distributions received
by the General Partner.

                BCF III, Branford Castle, and Branford Castle Associates III, L.P. have entered
into an agreement with a strategic investor (the “Strategic Investor”) in BCF III, who will
provide significant capital to BCF III and Branford Castle Associates III, L.P. In exchange for
these commitments, the Strategic Investor will: (i) be issued certain interests in Branford CV
III, LLC that entitle the Strategic Investor the right to receive management fees, carried interest
...

ITEM 7: TYPES OF CLIENTS

                The clients to whom the Advisers provide investment advisory services are
private investment funds, the securities of which are offered to investors on a private placement
basis, that invest primarily in private equity.