Galaxy Investment Management LLC

Item 5:        Fees and Compensation

A. Fee Schedule

Galaxy typically receives an annual management fee for advisory services provided to the Private
Funds. Such fees are based on either committed capital, funded capital commitments or net asset

value as more fully described in the Private Funds’ Governing Documents. In addition, Galaxy, or an
affiliate of Galaxy, is entitled to performance-based compensation, which may be in the form of
carried interest or an incentive fee, in each case subject to the terms of the applicable Governing
Documents. Galaxy may also be entitled to acquisition fees as outlined in the applicable Governing
Documents. All investors in the Private Funds must be “qualified purchasers” as defined in Section
2(a)(51) of the Investment Company Act. As a result, information regarding the fees and
compensation payable by such investors is not required to be provided herein. Investors should refer
to the Governing Documents for information regarding such fees.

Galaxy has and will, in its discretion, waive or reduce the management fee, performance-based
compensation or transaction-based fees applicable to all or any of the Investors in each Private Fund
or agree with an Investor to waive or alter the fees as to that Investor. From time to time, Investors in
the Private Funds have and will have different fee arrangements. Galaxy (without any act, consent or
approval of any limited partner) reserves the right, on its own behalf, or on behalf of a Private Fund,
to enter into, deliver, perform, modify and terminate side letters or other written agreements or
instruments to or with one or more investors which will have the effect of establishing different rights
under, or altering or supplementing the terms of, an investment in the Private Fund. Any rights
established, or any terms of an investment in a Private Fund altered or supplemented, in a side letter
with an investor will govern such investor’s investment in the Private Fund notwithstanding any other
provision of the Private Fund’s documents to the contrary.

From time to time pursuant to the terms of the Governing Documents and Galaxy’s sole discretion,
certain Investors or third parties may be presented with opportunities to co-invest in investments
alongside the Private Fund. In connection therewith, Galaxy or any of its affiliates may charge
management fees, performance-based compensation or other amounts to such investors or third
parties who co-invest in such investments alongside the Private Funds. Such fees, performance-
based compensation or other payments shall, in each case, be solely for the account of Galaxy or
such affiliate, as applicable.

B. Payment Method

The management fees are typically calculated and paid quarterly in advance, subject to the terms of
the Private Funds’ Governing Documents. Performance-based compensation is generally paid in
arrears, subject to the specific provisions set out in the applicable Private Fund’s Governing
Documents.

Management fees, performance-based compensation and transaction-based fees are paid to Galaxy
or an affiliate of Galaxy by deducting such fees from the applicable Private Fund account.

C.   Other Fees and Expenses

Each Private Fund is responsible for all of its organizational and offering expenses (the
“Organizational Expenses”) in connection with the formation of the Private Fund, including, without

limitation, legal, travel and meals, accounting, tax, marketing, syndication and consulting, filing and
printing, up to a maximum amount (the “Organizational Expense Cap”) as set forth in the Operating
Agreement. Unless the general partner of the Flagship Funds determines otherwise, the Flagship
Funds will also be responsible for any placement agent or finder fees related to the offering of its
interests. Such placement agent or finder fees will not be included in the calculation of the
Organizational Expense Cap.

The Private Funds and any parallel fund, alternative investment vehicle and/or any vehicle through
which the Private Funds may own investments (collectively, “Investment Vehicles”) are responsible
for all necessary expenses of their operation and administration including, without limitation the
following (all such expenses, collectively, the “Operating Expenses”):

       (i) all costs and expenses incurred in sourcing, identifying, evaluating, developing,
       negotiating, syndicating, structuring and closing investments, whether consummated or not
       consummated, and acquiring, holding, operating, monitoring, financing, disposing of (or the
       proposed disposition of), valuation or otherwise dealing with investments, and the costs of
       rendering financial assistance to or arranging for financing for any assets or businesses
       constituting investments or for working capital or other permitted purposes;

       (ii) all costs and expenses, if any, incurred in monitoring investments;

       (iii) taxes of the Private Fund and/or any Investment Vehicles;

       (iv) costs related to litigation and threatened litigation involving the Private Fund and/or any
       Investment Vehicles;

       (v) expenses associated with third-party accountants, auditors, attorneys, servicers,
       appraisers, tax advisors and other professionals with respect to the Private Fund and/or any
       Investment Vehicles and their respective activities, costs associated with the distribution of
       financial and other reports to limited partners, costs to establish, maintain and utilize one or
       more electronic portals or sites to provide or receive data and information relating to
       prospective and actual investments and parties relating thereto, and, in the case of the SRF
       Funds, costs associated with meetings of the Advisory Council (other than costs incurred by
       or solely associated with non-voting Advisory Council members which shall be borne by the
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Item 7:          Types of Clients

For a discussion of the Private Funds, please refer to Item 4 above.

Investors in certain of the Private Funds are required to make a minimum capital commitment to
the Private Fund, although Galaxy has the right to waive this minimum investment requirement in
its sole discretion.

Investors in the Flagship Funds are required to be “accredited investors” under Regulation D under
the Securities Act, and “qualified purchasers” under Section 2(a)(51)(A) of the Investment Company
Act.

Interests in the SRF Series are offered only to insurance companies or to insurance dedicated
partnerships. An insurance company’s investment in the SRF Series is typically on behalf of certain of
their segregated separate accounts which support variable life insurance and variable annuity
contracts to be offered and issued by the insurance companies in private placements (collectively, the
“Policies” and separately, a “Policy”). An investment in the SRF Series is designed to be an investment
option under the Policies. Insurance companies that subscribe for interests in the SRF Series will be
limited partners (“SRF Series Investors”) in the SRF Series. Each owner of a Policy (“Policy Owner”) is
not a limited partner in the SRF Series and is not a client of Galaxy. Each SRF Series Investor in the SRF
Series will ensure that all Policy Owners are accredited investors and qualified purchasers.

Galaxy requires investors to make representations concerning their financial sophistication and
ability to bear the risk of loss of their entire investment in the Private Funds.

Investors in the Private Funds may have conflicting investment, tax and other interest with respect
to the Private Funds’ investments. As a consequence, conflicts of interest may arise in connection
with decisions made by Galaxy that may be more beneficial for one investor than another investor.
The results of the Private Funds’ activities may affect individual investors differently, depending on
their different situations. In selecting and structuring investments for each Private Fund, Galaxy will
consider the investment and tax objectives of the Private Fund as a whole and not the objectives of
any investor individually. However, there can be no assurance that a result will not be more
advantageous to some investors than to other investors.