Daybreak Fund Advisors LLC

Item 5 - Fees and Compensation

A. Below is a discussion of how the Adviser is compensated in connection with providing advisory
   services to its Clients. The Adviser reserves the right to enter into different fee arrangements
   on a Client by Client basis.

    The Adviser will generally receive management fees and/or performance fees (also known as
    carried or profits interests) (assuming certain regulatory requirements are satisfied) in
    connection with the advisory management services that the Adviser provides to its Clients.
    Management fees, performance fees and any other compensation payable to the Adviser or its
    affiliates for such services by a Client and its investors are generally negotiated with each Client
    (or its underlying investors) and will depend on a number of factors as discussed below. The
    fees and other compensation payable by each Client (or its underlying investors) are described
    in each such Client’s partnership agreement or other governing documents.

    Management Fees. The management fees we receive will be based on committed or invested
    capital in accordance with the terms of the partnership agreement or other governing documents
    of the applicable Client and/or a separate investment management agreement. Our current
    management fees will typically be up to 2% of capital committed to the relevant Client during
    the investment period of such Client and up to 2% of unreturned invested capital remaining
    following the termination of the investment period of such Client, depending, in particular, on
    market terms, the strategy of the relevant Client, the amount of assets under management with
    the Client and the point in time in the life cycle of the relevant Client. Management fees paid
    by investors in the Clients generally impact the carried interest allocations received by the
    Adviser affiliate (special limited partner or carry partner) of the applicable Client. In addition,
    management fees payable to the Adviser by certain Clients may be reduced by certain other
    compensation received by the Adviser or its affiliates that relate to the relevant Client and its
    activities or by certain organizational, offering and other expenses borne by the Client, in each
    case subject to the terms of such Client’s governing documents.

    Carried Interest. The general partners or special limited partners that are affiliates of the
    general partners, of each Client typically receive carried interest allocations from such Client
    of up to 20% of distributable cash, determined with respect to each Client on a whole fund
    basis. Carried interest allocations may be subject to preferred return hurdles and/or claw-back
    obligations, depending on, among other things, the strategy of the relevant Client and market
    terms at the time of the Client’s formation.

    As indicated above, the fees and other compensation payable to the Adviser by its Clients are
    established at the time of the formation of the relevant Client and negotiated with participating
    investors prior to their investment. Specific details of such compensation and expenses, and
    their method of calculation are set out in the offering materials, disclosure documents and
    governing documents of the relevant Client and, as indicated, may vary from Client to Client.
    Once the relevant Client has been established and commenced operations, such compensation
    and expenses are generally not negotiable, although we are permitted to enter into side letter
    agreements or other arrangements with specific investors in certain Clients whereby such
    investors receive reductions of management fees or other compensation otherwise payable with
    respect to their investment in such Clients.

B. Management fees typically will be calculated and paid semi-annually in advance in January
   and July, subject to the terms of the relevant governing documents applicable to each Client.

    The general partners of each Client may make capital calls on investors in such Client for the
    amount of our management fees and remit the amounts received to the Adviser. The Adviser
    generally has the authority to deduct fees from its Clients’ accounts.

C. Each Client (and its underlying investors) will typically pay or otherwise bear all legal and
   other third party out-of-pocket organizational and offering expenses incurred in the formation
   of such Client and its related entities. Investors in the Funds will typically, and investors in
   other Clients may, receive a reduction in management fees in respect of offering and
   organizational expenses in excess of specific amounts as described in the offering materials,
   disclosure documents and governing documents of the relevant Client. In addition, investors in
   each Client are responsible for expenses related to the operation of such Client, which may
   include but are not limited to legal, accounting, transaction related travel, tax, audit, bank line
   interest, annual meeting, insurance, brokerage, investment banking, and dead deal costs, and
   are described in each Client’s partnership agreement or other governing documents.

    The Adviser does not typically collect transaction, monitoring, advisory, investment banking,
    directors’, break-up and other similar fees with respect to the investments or investment
    activities of its Clients (“Fee Income”). However, the management fees paid by limited partners
    in the Funds are, and by investors in other Clients could be, reduced by specified percentages
    (up to 100%) of Fee Income (net of related expenses) that the Adviser or the general partner of
    such Client receive from or through portfolio investments or prospective acquisition targets, in
    each case subject to the terms of such Client’s governing documents. Investors are advised to
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Item 7 - Types of Clients

The Adviser provides investment advisory services to the Funds, which are pooled investment
vehicles organized as private funds -- entities that are investment partnerships or other investment
entities formed under domestic or foreign laws and are exempt from registration under the
Investment Company Act of 1940, as amended (the “Investment Company Act”). In addition, the
Adviser provides investment advisory services to the other non-Fund Clients described above in
response to Item 4.

Generally, investors participating in the Clients are required to meet certain suitability and net
worth qualifications, including qualifying (a) as an “accredited investor” as defined in Rule 501 of
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), (b) as a
“qualified client,” for purposes of the Advisers Act, or (c) as a “knowledgeable employee” within
the meaning of Rule 3c-5 of the Investment Company Act, depending on the applicable eligibility
requirements of the respective Client.

The Clients are or will be invested in by a broad range of U.S. and non-U.S. investors, including,
among others:

    1.    Individual investors;
    2.    Private retirement and profit sharing plans;
    3.    Trusts;
    4.    Charitable foundations;
    5.    Educational endowments;
    6.    Corporations and investment partnerships;
    7.    Hedge funds;
    8.    Governmental entities;
    9.    Not for profit entities;
    10.   Funds of funds; and/or
    11.   Other business entities.

The Funds generally have specified minimum investment amounts set forth in their respective
offering materials, disclosure documents and/or governing documents. This amount is generally at
least $1 million, but lower capital commitments may be accepted in the discretion of the general
partner of each Fund.