Granite Equity Partners LLC

Item 5 – Fees and Compensation
The Adviser generally receives management fees and/or profit allocations from each Private
Fund. Private Funds may also indirectly incur or generate other fees payable to the Adviser
and its affiliates, depending on the nature of their portfolio activities. Detailed information
regarding the calculation of fees and expenses is contained in the applicable Private Fund’s
Governing Documents and offering materials. Management fees and performance allocations
are not negotiable and are established in the Governing Documents of each Private Fund,
although certain Investors may receive different fee terms pursuant to side letter
agreements.
A Private Fund, via its board of directors, may terminate its management agreement with the
Managing Member with advance written notice, as further detailed within the relevant
Governing Documents. Upon termination, all management fees for the Private Fund will
cease to accrue.
The following describes the most common fees and expenses in more detail.
Management Fees

For Granite Equity LLC and Granite Equity Associates LLC the Adviser is paid a quarterly
management fee based on the Fund’s assets under management as of the prior fiscal year (or
as of any alternative valuation date under the limited liability company agreement (“LLC
Agreement”)). The fee range is from 1.00% to 1.50%, although given the tiered structure the
Adviser generally receives a blended management fee of approximately 1.2% for most
Investors.
For purposes of determining the Management Fee, “Assets Under Management” means the
gross value of all of the Fund’s assets, including, but not limited to, Portfolio Company
investments, cash, accounts receivable, notes receivable, and any and all other assets of the
Fund of any kind or nature whatsoever other than unfunded commitments, which are
specifically excluded, all determined in accordance with the LLC Agreement.
Assets Under Management may include assets acquired using leverage. Because
management fees are calculated based on total assets under management, including assets
financed through borrowings, the use of leverage may increase the management fee payable
to the Adviser and therefore may create an incentive for the Adviser to utilize leverage.
Granite Debt Fund LLC does not charge any management or performance fees.
Certain classes of Investors may not be subject to management fees or may pay reduced
management fees pursuant to the terms of the applicable Governing Documents.
Management fees are generally paid by or on behalf of a Private Fund by (i) requiring
Investors in such Private Funds to make capital contributions in respect of such fees, or (ii)
withholding the amount of such fees from investment proceeds that would otherwise be
distributable to the Investors of such Private Funds. In addition, the Adviser generally can
cause such Private Fund to borrow money for the payment of such fees.
Performance-Based Arrangements
Distributions to Investors in the Private Funds are subject to some form of gain sharing for
the benefit of the Adviser. Generally, these profit allocations represent a share of
distributions made by a Private Fund in excess of the relevant Investors’ invested capital,
and allocable fees and expenses. Performance-based profit allocations are calculated and
distributed in accordance with the terms of the applicable Private Fund’s Governing
Documents.
Performance fees or gain sharing profit allocations are subject to regulation under Rule 205-
3 under the Advisers Act. Therefore, the Adviser will ensure that any Private Fund or
Investors in a Private Fund that are directly or indirectly assessed performance fees or are
subject to gain sharing profit allocations satisfy the qualifications of Rule 205-3 under the
Advisers Act and have been advised of such fees or allocations and their risks.
Performance fees or gain sharing allocations are generally 20% of profits and may be subject
to certain high-water marks. The manner of calculation and application of performance fees
or gain sharing profit allocations are disclosed in the Governing Documents for each Private
Fund.
Performance-based compensation is determined based on valuations of Portfolio Company
investments, including valuations that may involve estimates of fair market value for illiquid

securities. As a result, the Adviser’s performance-based compensation may be affected by
valuation determinations, which creates a potential conflict of interest. To mitigate this
conflict, the relevant Private Fund’s board of directors retains an independent third-party
valuation firm to determine the fair value of Portfolio Company investments, particularly
where market quotations are not readily available. The Adviser’s independent auditor
reviews the valuation firm’s analyses and conclusions as part of its audit procedures, and the
resulting valuations are subject to review and approval by the Private Fund’s board of
directors in accordance with the applicable Governing Documents.
Organizational Expenses
Typically, legal, accounting, filing, and other expenses incurred in connection with
organizing and establishing a Private Fund are borne by the Investors in such Private Fund.
Such expenses are allocated and reimbursed in accordance with the applicable Governing
Documents of the Private Fund.
Broken Deal Expenses
Investors in Private Funds generally are required to bear out-of-pocket costs and expenses
incurred in connection with deals that are not ultimately completed. Typically, these
expenses include (i) legal, accounting, advisory, consulting, or other third-party expenses in
connection with making an investment that is not ultimately consummated and any related
travel and accommodation expenses, although the Adviser and its affiliates may be required
to bear expenses incurred in connection with the preliminary investigation of investment
opportunities, and (ii) all fees (including commitment fees), costs, and expenses of lenders,
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Item 7 – Types of Clients
The Adviser provides investment management services and advice directly to the Private
Funds. The Private Funds are the Adviser’s only Clients. The Governing Documents of each
Private Fund may set minimum amounts for investment by prospective Investors. These
minimum amounts may be waived by the Adviser.
Investment advice is not provided individually to Investors in the Private Funds. The
Investors participating in the Private Funds may include high net worth individuals, banks,
thrift institutions, other investment entities, pension and profit-sharing plans, trusts, estates,
charitable organizations, corporations, limited partnerships or other business entities and
may also include, directly or indirectly, Partners or other employees of the Adviser. Interests

in the Private Funds are offered and sold solely to accredited investors, where applicable,
qualified purchasers.