Graham Partners LLC

Item 5: Fees and Compensation

       Management Fees

        We are compensated for our investment advisory services based on a percentage of
committed capital or invested capital as set forth in each Fund’s Governing Documents.
Generally, each Fund pays us a management fee based on committed capital during its investment
period and thereafter pays us a management fee based on invested capital. In certain cases,
however, a Fund will pay a management fee based only on invested capital. As set forth in the
Governing Documents, management fees charged and calculated based on invested capital are in
turn tied to the amount of investment contributions (including, where applicable, a Fund borrowing
component and the amount of any capitalized supplemental portfolio company fees, Graham

Partners Operating Company, LLC (“GPOC”) fees, or expenses contributed by the respective
Fund) relating to a Fund’s aggregate investment(s) in its portfolio companies that have not been
realized or deemed to have permanently and significantly declined in value. 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
generally will not be reduced in connection with any write downs, except, as contemplated by
certain Fund Governing Documents, in the case of investments deemed to have permanently and
significantly declined in value. Except where a Fund’s Governing Documents expressly provide
to the contrary, management fees will not be reduced (in whole or in part) in the case of partial
sales or dispositions, distributions (e.g., those resulting from a dividend recapitalization or a similar
transaction where the securities that comprise an investment are not disposed of), or in
circumstances that do not result in the complete disposition of the relevant Fund’s interest therein,
and, as applicable under certain Governing Documents, even in cases where the value of the Fund’s
investment or ownership percentage in such investment has been reduced (including substantially
reduced) as a result of such transaction.

        The management fee percentage rate for each Fund varies (with standard management fee
rates from 0.8% to 2.0% per annum), except for investors that are exempt from fees as described
below. The general partner of the applicable Fund negotiates the percentage rate with investors in
each Fund at the time such Fund is established. As described below, the management fee has been,
and may in the future be, reduced or waived in some circumstances in connection with the receipt
by Graham Partners or its affiliates of various fees paid by actual or prospective portfolio
companies. The management fee is generally subject to waiver or reduction by the general partner
of the applicable Fund, in its sole discretion, with respect to some or all of the investors in the
Fund (including in connection with investments in the applicable Fund made by the general partner
or its affiliates). Specifically, we may consider introducing the concept of a “fee holiday” for
certain investors in current or future Graham Partners-sponsored funds, solely in our discretion. A
fee holiday would relate to a temporary cessation of management fees to be borne by the applicable
investor and would be intended to provide a potential inducement for investors who commit to
invest at or above certain thresholds to a Graham Partners-sponsored fund and/or who make an
early commitment to the applicable funds.

        Management fees are calculated with respect to semi-annual periods, and are payable on
the 15th day of each such period, in arrears with respect to the first fifteen days of such period and
in advance for the remainder of such period. As required by the Advisers Act, if the Advisory
Agreement is terminated before the end of the applicable period, management fees for such Fund
will be charged on a pro rata basis through the date of termination, and any fees paid in advance
but not earned will be refunded. Generally, each of the Funds’ Governing Documents do not
require management fee reductions for writedowns, decreases in fair value or other events that do
not constitute a complete realization or disposition, except in the case of investments deemed to
have permanently and significantly declined in value. Graham Partners is authorized to use Fund-
level borrowing to pay management fees. Further, the use of fund-level borrowing for any purpose
can increase the base of a Fund’s management fee calculation, such as during periods where
management fees are based in whole or in part on an acquisition cost that includes a borrowing
component.

        Graham Partners has exempted, and will in the future exempt, among others, past or present
principals, employees, consultants, senior firm advisors, operating partners, certain senior industry
advisors, functional specialists, certain service providers, certain family members of past or present
principals, including with respect to the Graham Group, Graham family members and their related
entities and employees and consultants of their related entities, and past or present executive
management members of portfolio companies from payment of all or a portion of management
fees or carried interest in respect of any Fund. Certain Co-Investment Funds could also be exempt
from management fees or carried interest.

       Fund Expenses

         Subject to any relevant restrictions and other limitations contained in the relevant Fund
Governing Documents, Graham Partners will allocate expenses in a manner that it believes is fair
and equitable to the Funds under the circumstances over time and considering such factors as it
deems relevant, but in any case in its sole discretion and in a manner consistent with its expense
allocation policies and procedures. The Funds will bear all legal, accounting, printing, travel,
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Item 7: Types of Clients

        We provide investment advice to the Funds. Investors in the Funds include college and
university endowments, foundations, public and private pension plans, bank and finance
companies, funds-of-funds, insurance companies, family offices, high-net-worth individuals and
other institutional investors. Fund interests are offered and sold generally to investors that are (i)
“accredited investors” as defined under Regulation D of the Securities Act and (ii) “qualified
clients” as defined under the Advisers Act or other “knowledgeable employees” of Graham
Partners.

        Certain Funds will have a specified minimum investment set forth in their offering
documentation, organizational documents or other Governing Documents. Typically, the Funds
require minimum investment amounts ranging from $1 million to $5 million, but such minimums
are typically subject to Graham Partners’ discretion to permit investment of a smaller amount
generally or with respect to any investor in the relevant Fund.