Cortec Group Management Services LLC

Item 5 – Fees and Compensation
A.     Compensation for Advisory Services

Cortec receives asset- and performance-based fees and allocations from the Cortec Funds (as well as
other compensation and reimbursements of expenses, as described further below).

The specific payment terms and other conditions of these fees and allocations are set forth in the
relevant Cortec Funds Documentation. Cortec does not receive asset- or performance-based
compensation from the Employee Co-Investment Vehicles.

Management Fee

The following is a summary of the method used to calculate the management fee paid by the Cortec
Funds to their Cortec General Partners:

    1. during the commitment period (generally 5 years from the final closing date, except in the case
       of Cortec Fund VI, Cortec Fund VI-A, Cortec Fund VII, Cortec Fund VII-A, Cortec Fund VIII, and
       Cortec Fund VIII-A for which the commitment period is six years from the initial closing date),
       or a period terminating on an earlier date based on a specified percentage of capital
       commitments being drawn down or third party investors investing in a successor fund) - 2% of
       aggregate capital commitments; and

    2. after the period set forth in (1) above- 1.5%1 of (a) aggregate capital commitments2 less (b)(i)
       the amount of distributions made to the fund partners as a return of capital plus (ii) the cost
       basis of any portfolio investment that has been permanently and completely written off by
       the fund.

    3. Cortec As-Co, Cortec LOV Co-VIII, and Cortec LOV Co-VIIIA do not pay any management fees.

Because management fees are based on capital commitments, Cortec may be incentivized to oversize
the Cortec Funds to increase the amount of its management fees. Cortec believes that,
notwithstanding this potential conflict, it has sought and continues to seek capital commitments in
amounts that allow it to, on behalf of its funds, effectively deploy capital towards investment
opportunities which generate attractive rates of return for its funds’ investors. This is also due to the

1 With respect to each of Cortec Fund VI, Cortec Fund VI-A, Cortec Fund VII, Cortec Fund VII-A, Cortec Fund VIII,

and Cortec Fund VIII-A this percentage will be determined by the relevant LP Advisory Committee on the
eleventh anniversary of the relevant Cortec Fund’s final closing date.

2 With respect to Cortec Fund VII, Cortec Fund VII-A, Cortec Fund VIII, and Cortec Fund VIII-A an amount equal
to the aggregate Capital Contributions made by all Partners (other than Affiliated Partners) with respect to
investments.

fact that Cortec is incentivized by carried interest, which is calculated only after generating threshold
rates of return to its investors, as described further below.

Any fees paid to a placement agent will be paid by the relevant Cortec Fund, but the amounts so paid
will reduce the amount of the management fee otherwise payable by the relevant Cortec Fund to its
general partner. Cortec used a placement agent in the raising of the Cortec Fund VIII entities.

The Cortec Funds may also indirectly incur other fees (or expenses) payable (or reimbursable) to
Cortec and/or its personnel. For example, Cortec and/or its personnel may receive break-up fees,
advisory fees, consulting fees and transaction fees. These fees are 100% credited back to the relevant
Cortec Fund(s) and their investors through reductions or off-sets against management fees that
would otherwise be applicable. These fee offsets are described in the relevant Cortec Funds
Documentation.

Cortec does not currently have a fee schedule.

Carried Interest

The Cortec Funds allocate to their general partners on a deal-by-deal basis a carried interest
distribution based on proceeds generated from the sale of fund investments, in an amount equal to
20% of the profits from the disposition of each portfolio investment made by the relevant Cortec
Fund, after the return of invested capital and a preferred return to limited partners. All performance-
based compensation payable to Cortec will be effected consistent with the requirements of Section
205 of the Advisers Act and Rule 205-3 thereunder.

The terms of the carried interest distribution could incentivize Cortec to make decisions regarding
the timing and structure of realization transactions that may not be in the best interests of the Cortec
Funds (and their investors). For example, Cortec would be in a position to receive carried interest
distributions earlier if profitable investments were liquidated prior to investments that were not
profitable because, at the time proceeds from those profitable investments were realized, the Cortec
Funds would generally not be required to first distribute capital to limited partners to make up for
prior losses associated with unprofitable investments. Although the Cortec Funds’ documentation
contains “general partner clawback” provisions to ensure proper alignment of carried interest
payments against aggregate fund performance, the return of carried interest distributions to Cortec
Fund limited partners could be delayed if not funded by the relevant general partner in a timely
manner.

The carried interest distribution also creates a potential conflict of interest for Cortec in the context
of valuing investments. For example, because distributions to the partners are generally calculated
in a “deal-by-deal” waterfall, Cortec does not receive a carried interest distribution until the limited
partners receive distributions equal to their share of any write downs that were not taken into
account for prior distributions. This creates an incentive for Cortec to avoid writing down the value
of assets that are not readily marketable or difficult to value because then Cortec would be in a

position to receive a higher carried interest distribution. Cortec believes that this conflict is mitigated
...

Item 7 – Types of Clients
As noted in Item 4 above, Cortec provides discretionary investment advisory services to the Cortec
Clients (which may be organized as domestic or foreign partnerships, corporate or other
incorporated or unincorporated entities). Cortec Fund investors include private and public pension
funds, insurance companies, fund-of-funds, endowments and high net worth individuals.

Interests in the Cortec Clients and the Cortec Clients themselves are not registered under the
Securities Act or the 1940 Act, respectively. Accordingly, interests in the Cortec Clients are offered
exclusively to investors satisfying the applicable eligibility requirements either in private placement
transactions within the United States or in offshore transactions, and the Cortec Clients are excepted
from the definition of an “investment company” under Section 3(c)(1) and/or Section 3(c)(7) of the
1940 Act (with respect to the Cortec Funds) and Section 3(c)(1) of the 1940 Act (with respect to the
Employee Co-Investment Vehicles).

Investors in the Cortec Funds are required to complete and submit a subscription agreement binding
them to the terms of the relevant Cortec Funds Documentation. The minimum investment is
generally $5 million to $10 million for the Cortec Funds (depending on vintage). However, that
minimum investment amount for Cortec Fund investors may be modified, depending on the investor
relationship and in accordance with the relevant Cortec Funds Documentation.