Flexstone Partners LLC

Item 5.         Fees and Compensation

The specific manner in which Flexstone charges fees for a Fund is established in the Governing Documents
for such Fund. Flexstone generally charges a management fee quarterly in advance for each of the Funds,
which is calculated based on committed assets or invested assets, as applicable. Management fees range
from 0.225% to 2% per annum for the Funds.

Flexstone may agree at any time to reduce or waive fees or establish a different fee rate or calculation with
respect to any series or one or more investors of any Fund. See Item 6 “Performance-Based Fees” below
regarding “Carried Interest” applicable to certain Flexstone Funds. The Funds may also pay other types of
fees and bear additional expenses in connection with The Adviser’s services as described below.

Fund Expenses

All expenses attributable to the organization of the Funds and the sale of interests to the LPs of each Fund
(the “Organizational Expenses”) will be borne by the Funds (subject to certain caps as provided in the
applicable partnership agreement, offering memoranda or other organization documents of each Fund,
collectively, the “Fund Documents”). The GP and/or The Adviser may incur and pay all reasonable
expenses on behalf of the Funds in connection with the Funds’ business which it deems necessary or
desirable, and may charge or be reimbursed by the Funds therefore, including, without limitation, due
diligence expenses related to potential investment opportunities, accounting, reporting, tax preparation,
audit, record keeping and legal expenses, commissions, brokerage fees and similar charges incurred in
connection with the purchase and sale of portfolio investments of the Funds (whether or not such purchase
or sale is consummated), finder’s fees, custodial fees, fees of the administrator and other normal fees and
expenses associated with the operation of the Funds (collectively, the “Operating Expenses”). In all cases,
each Fund will bear its own Operating Expenses, and the Funds will bear any extraordinary, non-recurring
and other expenses of the Funds, including without limitation costs of litigation and indemnification and
taxes. Expenses and liabilities incurred in connection with an investment opportunity or potential investment
opportunity, including without limitation due diligence and indemnity expenses or expenses related to
hedging arrangements, will be allocated among the Funds pro rata according to the amount invested by
each in such investment opportunity or, in the case of an unconsummated portfolio investment, pro rata
according to the amount that would have been allocated to each Fund that would have participated in such
opportunity, as determined by the GP in its sole discretion. In all cases, the GP shall have the power to
approve variations in the allocation with respect to the Funds if it determines that the allocation would not
produce an inappropriate result.

Brokerage and Other Transaction Costs
Additionally, the Funds will bear the costs of brokerage commissions, transaction fees, and other related
costs and expenses (including, director’s fees, consulting fees, commitment fees, break-up fees, and other
similar expenses) which shall be incurred by a Fund, provided that certain director’s fees, consulting fees,
commitment fees and break-up fees, and other similar expenses may be offset against management fees
charged as negotiated and set forth in the applicable Fund Documents. In respect to certain funds, 100%
of directors’ fees, consulting fees and portfolio investment advisory board or investment committee member
fees (in each case net of expenses) received by members, managers, partners and employees of a Fund’s
general partner and its affiliates (in their capacity as such) and commitment fees and break-up fees payable
in respect to a Fund’s investments, will reduce the Management Fee. The Funds may incur certain charges
imposed by custodians, brokers, third party investment and other third parties such as fees charged by
managers of any underlying pooled investment vehicles in which the Funds may invest, custodial fees,
deferred sales charges, transfer taxes, wire transfer and electronic fund fees, and other fees and taxes on
brokerage accounts and securities transactions. Liquid assets, including capital committed to portfolio funds
but not yet called, may be invested in money market funds. If a Fund utilizes money market funds as sweep
vehicles, investors in such Fund will indirectly pay a fee in addition to the fees such investors pay to FP,
except as may be set forth in individual Fund Documentation. Such charges, fees and commissions are in
addition to FP’s fees. Additionally, in connection with certain Funds’ investments in other pooled investment
vehicles, the Funds may pay management fees and carried interest in respect of those investments. There
is often no limitation on the ability of underlying funds of funds managed by FP to invest in funds affiliated
with FP or its affiliates. FP or its affiliates may receive fees, including asset based or performance-based
fees or allocations, related to its management of funds or companies managed or sponsored by FP or its
affiliates. Except as otherwise provided in a Fund’s Fund Documents, FP generally will offset the fees or
allocations received for their management of the funds managed or sponsored by FP, against the
management fees and carried interest it receives from the Funds.

Flexstone and its supervised persons do not accept compensation for the sale of securities or other
investment products.

Item 7.          Types of Clients

Flexstone’s clients are generally pooled investment vehicles. Flexstone has also established and may
establish feeder funds to accommodate foreign investors. None of the offering of interests in the Funds are
registered under the Securities Act, and none of the Funds are registered under the Investment Company
Act pursuant to exemptions from registration provided by Section 3(c)(1) or Section 3(c)(7) of the
Investment Company Act. The Funds generally offer interests on a private placement basis, to investors
that are “accredited investors” and “qualified purchasers”, as applicable. The Adviser may decline to accept
applications for subscription to any of its Funds for any reason, including any person or an immediate family
member or close associate of a senior foreign political figure. Flexstone will not accept accounts from any
prospective investor or client that appears on a list of known or suspected terrorists or terrorist organizations
compiled by any U.S. or foreign governmental agency.