Five Elms Capital Management LLC

ITEM 5. FEES AND COMPENSATION

A. Management Fees

As compensation for investment advisory services rendered to the Funds, Five Elms generally
receives from each such Fund an advisory fee (each, a “Management Fee”) typically calculated
based on committed capital, remaining invested capital, or fair market value with respect to such
Fund. Management Fees are generally reduced during the life of a Fund. Management Fees paid by
a Fund are also reduced by certain other fees or compensation received by the Firm or its affiliates
that relate to such Fund’s activities and investments, or by certain organizational or other expenses
borne by such Fund, as described in more detail below. Management Fees paid by a Fund are
indirectly borne by investors in such Fund.

Management Fees vary Fund by Fund, a portion of which are either payable quarterly or semi-
annually in advance. Management Fees are generally deducted directly from each Fund’s account
and are generally borne by each Fund’s third-party investors. Upon termination of a Fund’s
Advisory Agreements, Management Fees that have been prepaid are generally returned on a
prorated basis.

The precise amount of, and the manner and calculation of, the Management Fees for each Fund
are established by the Firm and are set forth in such Fund’s Advisory Agreements received by each
investor prior to investment in such Fund. The Management Fees and other fees and distributions
described herein are generally subject to modification, waiver, or reduction by the Firm in its sole
discretion, both voluntarily and on a negotiated basis with selected investors via side letter and
other arrangements, which may not be disclosed to other investors in the same Fund. Fees differ
from one Fund to another, as well as among investors in the same Fund. Funds pay different
Management Fee rates and certain Funds do not pay Management Fees.

If and to the extent that certain fees or other remuneration (such fees, “Other Fees”) from a
Portfolio Company of a Fund are received by the Firm, a General Partner, certain other affiliated
entities, or certain personnel of the Firm, and subject to pro-ration if another Fund (including a Fund
that does not pay Management Fees) also has an investment in the applicable Portfolio Company,
then such Other Fees generally trigger a Management Fee offset (pursuant to which the
Management Fee payable by such Fund would be reduced) subject in all respects to the provisions
of such Fund’s Advisory Agreements. However, by way of example and not in limitation of any
Fund’s Advisory Agreements, such offset provisions generally do not apply to (and therefore a
Fund will not benefit from) fees or other remuneration received from Portfolio Companies of a
Fund by certain personnel of the Firm acting in an executive or officer role at a Portfolio Company,
fees and remuneration paid to an Operating Advisor (as defined below), or Portfolio Company
Legal Advisory Services (as defined below).

It is Five Elms’ standard practice to capitalize a Portfolio Company with the aggregate amount of
a Fund’s equity investment into such Portfolio Company prior to such Portfolio Company’s
payment of applicable fees and expenses, including, but not limited to, (i) third-party legal, due
diligence, tax and consulting services procured by the Firm in connection with such Fund’s

investment into the Portfolio Company and (ii) Other Fees (clauses (i) and (ii), “Transaction
Costs”). As described above, payment of Other Fees by a Portfolio Company to the Firm, a
General Partner, or certain other affiliated entities or personnel of the Firm may trigger a full or
partial Management Fee offset for the Fund making the investment. The practice of capitalizing a
Portfolio Company with the aggregate amount of a Fund’s equity investment “gross” of
Transaction Costs payable by a Portfolio Company (including Other Fees that trigger a full or
partial Management Fee offset) results in such Fund owning a larger percentage of the Portfolio
Company’s outstanding equity than it would if the amount of such Fund’s equity investment were
reduced by the amount of such Transaction Costs. However, this has the effect of increasing such
Fund’s “invested capital” (i.e., the cost basis of such Fund’s aggregate equity investment in each
currently-held Portfolio Company) for purposes of any Management Fees payable under its
Advisory Agreements if such Management Fees are calculated on the basis of invested capital as
of a given date.

B. Expenses

Fund Expenses

If and to the extent permitted by the Advisory Agreements and other Offering Documents of a
Fund, such Fund will bear all expenses relating to it to the extent not borne by its actual or
prospective Portfolio Companies, including, without limitation: (i) Organizational Expenses (as
defined below); (ii) all costs and expenses incurred in identifying, investigating, developing,
negotiating, structuring, acquiring, sourcing, trading, settling, monitoring, tracking and holding
portfolio investments (whether or not consummated), including all commission, brokerage,
placement, underwriting, registration, legal, tax, accounting, professional and consulting fees and
expenses, including any and all Operating Advisor costs, fees and expenses in connection
therewith and the costs and expenses of any associated “search”, “roll-up” or acquisition company,
and travel expenses (including car and ride-sharing services, first and business class and non-
commercial travel and other modes of transportation), accommodations and meals in connection
therewith; (iii) costs and expenses of third-party appraisals of prospective portfolio investments
(whether or not consummated); (iv) broken-deal costs and expenses; (v) brokerage and finders’
fees and commissions, custodial expenses, depositories, agent bank and other bank service fees
and all expenses related to investing the Fund’s cash reserves; (vi) the Fund’s allocable costs and
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ITEM 7. TYPES OF CLIENTS

The Firm currently provides investment supervisory services to the Funds. Investment advice is
provided directly to the Funds (subject to the direction and control of the General Partner of each
such Fund, if applicable) and not individually to investors in such Fund.

Interests in the Funds are offered pursuant to applicable exemptions from registration under the
Securities Act and the Investment Company Act. Investors in Funds are generally “qualified
purchasers” as defined in the Investment Company Act, and include, among others, high net worth
individuals, banks, thrift institutions, pension and profit sharing plans, trusts, estates, charitable
organizations, university endowments, corporations, limited partnerships, and limited liability
companies or other entities.

The Firm does not have a minimum size for a Fund, but minimum investment commitments may
be established for investors in the Funds. Minimum investment amounts (if any) are set forth in
each Fund’s Advisory Agreements. However, the General Partner of each Fund may in its sole
discretion permit investments below the minimum amounts set forth in its Advisory Agreements.