Edgewater Services LLC

FEES AND COMPENSATION

        The following is a general description of fees, compensation and expenses of the
Partnerships. Differences exist from Partnership to Partnership, and certain Partnerships may not
charge certain fees, compensation or expenses that other Partnerships charge. The Governing
Documents describe the applicable fees, compensation and expenses of the respective Partnerships
in greater detail.

       In general, each General Partner receives a Management Fee and a carried interest in
connection with advisory services it provides to its clients. The General Partners or other
Edgewater entities or affiliates receive additional compensation in connection with management
and other services performed for portfolio companies owned by the Partnerships and a portion of
such additional compensation will offset in part the Management Fees otherwise payable to the
applicable General Partner, as described in the respective Governing Documents. Investors in the
Partnerships also bear certain Partnership expenses.

Management Fee

        Generally, a Partnership, during its investment period, will pay the applicable General
Partner a management fee (the “Management Fee”) calculated as a fixed percentage on an annual
basis of aggregate Partnership investor capital commitments (“Commitments”) and as described
in the applicable Governing Documents. Payment of the Management Fee will be made quarterly
or semi-annually, typically in advance, and will be deducted from the Partnership’s assets. A
portion of the Management Fee is ultimately received by the Management Company. Each
Partnership typically has multiple closings in which an investor can participate. Generally,
investors participating in a closing after the initial closing of a Partnership bear the Management
Fee from the date of the initial closing of such Partnership. The Management Fee will be reduced
upon the expiration of the investment period or upon a date specified in the applicable Governing
Documents (such date, the “Stepdown Date”). The Management Fee will be payable until
proceeds from all portfolio investments are distributed or until the General Partner’s relationship
with the applicable Partnership is terminated for other reasons (as described in the relevant
Governing Documents). Installments of the Management Fee payable for any period other than a
full management fee determination period are adjusted on a pro rata basis according to the actual
number of days in such period. As a general matter, Management Fees will be payable during term
extensions unless otherwise agreed with investors.

        The Governing Documents provide that a Partnership’s Management Fees will be
calculated and charged on a basis that generally is not tied to the Partnership’s then-current net
asset value. As further specified in the Governing Documents, from the effective date of the
relevant Partnership until the Stepdown Date, Management Fees generally will be charged based
on a formula tied to the amount of the relevant Partnership’s aggregate Commitments. Further,
after the Stepdown Date, Management Fees generally will be charged and calculated based on a
formula tied to the amount of investment contributions (including, where applicable, a Fund
borrowing component and the amount of any capitalized Supplemental Fees (as defined below) or

expenses, including expenses of Operating Advisors (as defined below)) made by the relevant
Partnership’s aggregate investment(s) in its portfolio companies that have not been realized or
permanently written down (such investments that have been permanently written down,
“Impaired Value Investments”).

        Under the Governing Documents, where the fair market value of an investment exceeds
the total amount of investment contributions relating to such investment, post-Stepdown Date
Management Fees will not be calculated based upon such appreciated value, and will instead
continue to be calculated based on the amount of such investment contributions. Conversely, the
Governing Documents do not require Management Fees to be reduced or refunded following the
occurrence of a write-downs, decrease (including a significant decrease) in fair value or other event
not constituting a complete realization, such as a partial sale or disposition, reorganization,
recapitalization (including recapitalizations involving dividends), roll-over investment in
connection with a sale or dividend distribution, except in the case of investments meeting the
relevant Impaired Value Investment standard under the Governing Documents. For the avoidance
of doubt, following the Stepdown Date, if the fair market value of an Impaired Value Investment
is less than the total amount of investment contributions relating to such Impaired Value
Investment, then the amount of Management Fees otherwise payable relating to such investment
will be reduced solely based on the ratio of the fair market value of each relevant remaining
investment(s) as compared against the amount of total investment contributions relating to such
investment(s) as of the date of the relevant event.

        As a result, the amount of Management Fees generally will not correspond with
fluctuations in the net asset value of individual investments or of a Fund, including following the
relevant investment period, and will not be reduced in connection with any write downs (whether
temporary or permanent), except in the case of Impaired Value Investments.

        In many circumstances, the post-Stepdown Date Management Fee base will include
capitalized transaction-specific fees and expenses of unrealized investments, including certain fees
(such as Supplemental Fees) and expenses paid to third parties, Edgewater, or its affiliates. Further,
Management Fees generally will not be reimbursed or refunded under the Governing Documents
in the event of realizations, dispositions or partial write-downs or write-offs that occur partway
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TYPES OF CLIENTS

       Edgewater provides investment advice solely to its Private Investment Fund clients, and
references throughout this Brochure to “clients” and to Edgewater’s related duties to and practices
on behalf of its clients and/or investors should be construed accordingly. The Partnerships are

investment partnerships or other investment entities formed under U.S. or non-U.S. laws and
operated as exempt investment pools under the Investment Company Act of 1940, as amended.

         The investors participating in the Partnerships generally include individuals, banks or thrift
institutions, other investment entities, university endowments, sovereign wealth funds, family
offices, pension and profit-sharing plans, trusts, estates or charitable organizations or other
corporations or business entities and often include, directly or indirectly, Principals or other
personnel of Edgewater and its affiliates and members of their families, Operating Advisors or
certain service providers retained by Edgewater, as well as executives of portfolio companies.

        The Partnerships are expected to include alternative investment vehicles established in
order to permit one or more investors to participate in one or more particular investment
opportunities in a manner desirable for tax, regulatory or other reasons. Alternative investment
vehicle sponsors generally have limited discretion to invest the assets of these vehicles independent
of limitations or other procedures set forth in the organizational documents of such vehicles and
the Governing Documents of the related Partnership.

        Typically, each Partnership has a minimum investment amount of $5 million for third-
party investors and Partnership interests are offered and sold solely to investors meeting applicable
qualifications. The relevant General Partner is permitted to waive such minimum investment
amount.

             METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

General

        The principal investment strategy of Edgewater is to seek to achieve long-term capital
appreciation for the Partnerships, primarily by acquiring equity and equity-related securities and
debt in private growth-oriented companies. Edgewater generally targets buyout and growth equity
and equity-related investments primarily in lower middle market companies with revenues
generally ranging from $50 to $300 million and EBITDA generally ranging from $10 to $50
million, including prospective add-on acquisitions with respect to such companies. Investments
are predominantly in non-public companies, although investments in public companies are
permitted. There can be no assurance that Edgewater will achieve the investment objectives of any
of the Partnerships, and a loss of investment is possible.

Investment and Operating Strategy

        Edgewater generally seeks to provide returns to investors by (i) using research and contacts
to identify investments that Edgewater believes are attractive, (ii) performing analysis and due
diligence to select and structure investments and (iii) providing significant resources to portfolio
companies.

        Preliminary Review. Upon the receipt of information regarding a new investment
opportunity, a deal team is formed that is typically comprised of Edgewater’s investment
professionals with both operating and financial experience. The deal team seeks to assess the
strengths and weaknesses of the business, including its operations and company management, the
current state and outlook for the industry and the particular deal dynamics. Edgewater believes

that extensive and objective due diligence is a cornerstone of successful investing. Once the deal
team has determined that the transaction represents an attractive opportunity for a Fund, the
opportunity typically is presented to all of the investment professionals for their preliminary
review. These reviews are an occasion to gather the investment professionals’ input on the
investment thesis, industry activity, informational resources and ways to create value post-closing.

        Structure Investment. The deal team works to structure the investment in a manner that it
believes will provide an attractive risk/return profile and promote the growth prospects and
opportunities of the company. Edgewater strives to use structures designed to minimize downside
risk, such as liquidation preferences, participation features and dividends. Edgewater has
developed a set of protective covenants and control provisions that are designed to provide certain
governance, control and liquidity rights, and Edgewater often seeks to implement these covenants
and provisions as appropriate.

        Due Diligence and Approval. Once a letter of intent with exclusivity has been signed and
the investment committee has given preliminary approval to pursue the opportunity, the deal team
executes the due diligence process. The purpose of this process is to gain a thorough understanding
of the operations of the target company, review and quantify opportunities and evaluate potential
risks that may threaten the investment in the future. Edgewater typically engages leading
professional service providers across a broad range of disciplines and industries to assess business
and industry conditions, accuracy of financial statements, quality of revenues and earnings,
reasonableness of projections, competition, product and service efficiencies and customer
satisfaction, and work closely with due diligence providers throughout their engagement. Projected
operating plans are reviewed with management and downside scenarios are developed and
analyzed. At this time, Edgewater also typically reviews specific opportunities for Edgewater to
add value through additional relationships including candidates for chairman or lead director. Plans
for acquisitions and eventual exits are explored and conversations with potential targets or exit
opportunities are often underway during due diligence.
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