Essex Woodlands Management Inc

Item 5 – Fees and Compensation

EW receives fees and compensation in exchange for advisory services provided to the Funds,
including management fees and performance-based carried interest, as well as other fees and expenses
paid by the Funds and the portfolio companies in which our Funds invest. The portfolio companies
also reimburse EW and the Funds for certain expenses advanced on their behalf. In addition, the
Funds are responsible for bearing certain expenses as detailed below and in each Fund’s Governing
Documents. Limited partners should refer to the Governing Documents of the applicable Fund for
a complete understanding of how EW is compensated, including a full description of the calculation
of management fees. The information contained herein is a summary only and is qualified in its
entirety by such documents.

Management Fees and Portfolio Fees

Each Main Fund pays EW a quarterly management fee (the “Management Fee”), in advance, of up to
2.0% per annum of aggregate non-affiliated limited partner capital commitments (“Commitments”).
Each Main Fund’s Management Fee generally steps down following certain events specified in the
relevant Governing Documents of such Main Fund (such date, the “Stepdown Date”) and differs by
Main Fund. A Main Fund’s borrowings are generally taken into account for purposes of calculating
the Management Fee.

The amount of Management Fees generally will not correspond with fluctuations in the net asset value
of individual investments, aggregate investments in a portfolio company or of a Main Fund, including
following the Stepdown Date, and will not be reduced in connection with any write-downs, except in
the case of portfolio companies that have been completely disposed of or permanently written off in
accordance with United States generally accepted accounting principles (“GAAP”). Permanent write-
down determinations are made in the discretion of the valuation committee in accordance with the
relevant Governing Documents and the Firm’s valuation policy. 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 (e.g., line of
credit or bridge financing contributions)) made by the relevant Fund relating to such Fund’s aggregate
investment(s) in its portfolio companies that have not been realized or completely disposed of or
permanently written off in accordance with GAAP (such investments, “Impaired Value
Investments”). Except where the Governing Documents expressly provide to the contrary,
Management Fees will not be reduced (in whole or in part) in the case of partial distributions or partial
sales of investments (e.g., those resulting from a dividend recapitalization) or reorganizations,
restructurings, roll-over investments, extraordinary dividends or similar transactions, in each case in
circumstances that do not result in the complete disposition of the relevant Fund’s interest therein,
and even in cases where the value of the Fund’s investment or the Fund’s ownership percentage in
such portfolio company has been reduced (including substantially reduced) as a result of such
transaction. In addition, Management Fees generally will not be reimbursed or refunded under the
Governing Documents in the event of realizations, dispositions or partial write-downs that occur

partway through the relevant calculation period. Further, where there has been a partial disposition
or permanent write-down of an investment and the fair market value following such event exceeds
the total amount of the Main Fund’s investment contributions relating to the portfolio company, the
Governing Documents do not require Management Fees after the Stepdown Date to be reduced. In
most circumstances, the post step-down Management Fee base will include capitalized transaction-
specific fees and expenses of unrealized investments, including transaction fees charged by EW in
connection with the investment, which poses a conflict of interest in that the inclusion of such fees
and expenses results in a higher Management Fee than if such transaction fees and expenses were not
capitalized into the asset base. Limited partners participating in a closing after the relevant Main
Fund’s initial closing date generally bear the Management Fee from such initial closing date plus
interest. The Management Fee is payable until all portfolio investments are distributed or until EW’s
relationship with the applicable Main Fund is terminated for other reasons (as described in the relevant
Governing Documents).

Management Fees are negotiated with limited partners during the fundraising period of the applicable
Fund and are not subject to negotiation thereafter. The relevant General Partner is permitted, in its
sole discretion, to waive all or a portion of the Management Fee payable by a limited partner (however,
these limited partners generally pay their pro rata share of certain Fund expenses). Management Fees
differ from one Fund to another, as well as among limited partners in the same Fund. Such differences
can arise from the size of a limited partner’s commitment, different limited partner classes, provisions
of side letter agreements or other negotiated terms. Installments of the Management Fee payable for
any period other than a full three-month period are adjusted on a pro rata basis according to the actual
number of days in such period. Management Fees are collected through a capital call, through a draw-
down on the Fund’s line of credit or offset against a distribution to limited partners.

EW does not currently receive a Management Fee from Co-Investment Funds or from co-investors
in an EW investment through a direct co-investment (for clarity, Management Fees are not received
on the co-investment portion of the investment) (however, such Co-Investment Funds and co-
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Item 7 – Types of Clients

EW provides investment advisory services to its Funds. Limited partners in the Funds must meet
certain financial sophistication and net worth requirements in addition to other investment criteria.
The Funds limit their limited partners to persons or institutions who are: (i) “accredited investors” as

defined in the Securities Act of 1933, as amended (“Securities Act”); (ii) “qualified purchasers” or
“knowledgeable employees”, each as defined in the Investment Company Act; or (iii) if applicable,
“qualified clients”, as defined in the Advisers Act. The Funds are not registered or required to be
registered under the Investment Company Act; are not made available to the general public; their
securities are not registered or required to be registered under the Securities Act; and Fund interests
are privately placed to qualified investors. Qualified investors include individuals or entities to which
Fund interests are permitted to be sold, which generally include (i) in the United States, people or
organizations who meet certain net worth, income and/or financial sophistication requirements as
described above or (ii) in other countries, as permitted by the relevant securities laws in such
jurisdiction and in compliance with any foreign offering provisions applicable to EW and/or the
Funds. Limited partners considering an investment in the Funds should consult with their own
investment, tax and/or legal consultants prior to investing.

Limited partners in the Funds include a variety of institutional limited partners, including endowments,
pension and profit-sharing plans, governmental pension funds, fund of funds, limited partnerships
and other business entities. Additionally, the Funds include, directly or indirectly, principals or other
employees of EW and its affiliates and members of their families, operating partners and Operations
Group members, senior advisors and other service providers of EW. Further, certain Co-Investment
Funds include as limited partners senior members of management or owners of the portfolio company
with capital invested or through grants of a profits interest.

The minimum commitment for a limited partner is outlined in the Governing Documents of each
Fund and ranges up to $5 million minimum, depending on the Fund. The General Partner of each
respective Fund maintains the discretion to accept less than the minimum investment threshold.

On occasion, EW offers co-investment opportunities to certain limited partners and third-party
investors to invest alongside a Fund in Fund portfolio companies. Co-investments have been
structured either as (i) a separate Co-Investment Fund or (ii) a direct investment by certain investors
into a portfolio company or its holding or operating company. When structured as a Co-Investment
Fund, EW considers the investment to be a Fund client, identifies the Co-Investment Fund in its
Form ADV Part 1, Schedule D, Section 7.B.(1), obtains an audit for the Co-Investment Fund, reserves
the option to assess a Management Fee, Carried Interest or other fees on such Co-Investment Fund
and includes the amount of assets of such Co-Investment Fund in the Firm’s regulatory assets under
management. In the case of direct co-investments, EW does not consider the investment to be a
Fund or a client, does not act as the investment manager to the co-investment portion of the
investment, does not charge Management Fees, Carried Interest or other fees to the investment, does
not have custody of the investment or include the amount of assets of the co-investment in the Firm’s
regulatory assets under management. In such direct co-investment opportunities, we will perform
management, advisory and other services for the portfolio companies in which these co-investors
invest, generally at no additional cost to such co-investors except portfolio company fees and expenses
(which such fees and expenses are recorded at the portfolio company).

We have the ability to create a co-investment opportunity if an investment requires additional capital,
if it is too large for a Main Fund to make on its own either under the Fund’s limited partnership
agreement or based on the sole discretion of the General Partner, or if we believe it would be in the
Main Fund’s best interest to bring a co-investor to the deal. Subject to any restrictions contained in
the Governing Documents of the relevant Fund, any side letter or other terms negotiated with respect
to such Fund or agreements with lenders, in general no limited partner has a right to participate in any
co-investment opportunity. EW’s exercise of discretion in allocating co-investment opportunities
often will not result in proportional allocations among co-investors and such allocations can be more
or less advantageous to some co-investors relative to other co-investors. When a co-investment is
offered, the size of the investment opportunity otherwise available to EW’s Main Fund(s) will be less
than it would otherwise have been without the inclusion of such co-investors.

We will select the investors that are permitted to co-invest in a particular portfolio company in our
sole discretion based on various factors, including those detailed in the Governing Documents and as
outlined in our internal policies and procedures. Opportunities to co-invest in a portfolio company
are made available to select limited partners or third parties, including, without limitation, management
or founders of the applicable portfolio company, co-sponsors, strategic investors, lenders, deal sources
(including finders and consultants), other sponsors (including other private equity or venture capital
firms), service providers, Operations Group members or other persons or entities affiliated, associated
or otherwise known to EW or its personnel. EW will, in its sole discretion, evaluate each co-
investment opportunity on a case by case basis. In evaluating a co-investment opportunity, we
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