Hastings Equity Partners LLC

ITEM 5 – FEES AND COMPENSATION

Item 5.A   Describe how you are compensated for your advisory services. Provide your
           fee schedule. Disclose whether the fees are negotiable.

           As a general matter, compensation is negotiable and varies, but typically Hastings
           charges the Funds an annual management fee (the “Management Fee”) during the
           investment period equal to 2% of aggregate commitments and declines to 1.5%
           of invested capital thereafter. Certain affiliated limited partners and the Co-
           Investment Vehicle is not charged a management fee or performance allocation
           by Hastings.

           The Funds’ management fees are payable quarterly in advance at the beginning
           of each calendar quarter. Upon invoicing and instructions by Hastings, such
           management fees are deducted directly from the Funds or their respective
           Advisory Affiliate, as applicable.

           In addition, a Hastings Advisory Affiliate that serves as general partner of the
           Funds receives a percentage of net profits distributed to the partners in such Funds
           as its “carried interest.” See Hastings Performance Fees below for further
           discussion.

           In all cases, management fees, expenses and other compensation are charged to a
           Fund through the date of termination of such Fund.

           It is critical that Investors/Clients refer to the relevant Governing
           Documents for a complete understanding of fees and compensation. The
           information contained in this Item 5 is a summary only and is qualified in its
           entirety by the relevant Governing Documents.

           Hastings Performance Fees

           An Advisory Affiliate that serves as a general partner of a Fund typically receives
           allocations and distributions of 20% of the Fund’s net profits as its “carried
           interest” after returning the capital contributed by the partners of such Fund and
           achieving one or more negotiated performance hurdles.

           The carried interest is a “performance-based fee” charged in compliance with
           Rule 205-3 under the Investment Advisers Act of 1940.

           In connection with a Fund’s liquidation and dissolution, if carried interest
           distributions to the Advisory Affiliate (excluding certain tax distributions) exceed
           the cumulative carried interest distributions that should have been made to the
           Advisory Affiliate, the Advisory Affiliate will return the excess to the Fund.

           Carried interest allocations and distributions to the Advisory Affiliate may create
           an incentive for Hastings and the general partners to select investments that are
           riskier or more speculative than would be the case in the absence of such carried
           interest allocations and distributions.

           Hastings Portfolio Company Fees

           In some cases, Hastings or its Advisory Affiliates receives commitment fees,
           break-up fees, consulting/advisory fees or other remuneration from Fund
           Portfolio Companies (whether in cash, securities, options or otherwise and
           including, for avoidance of doubt, break-up, commitment, monitoring and
           success fees) (collectively “Fees”). Portfolio Company fees are capped for the
           calendar year as summarized below.

           Management Fee Offset

           The Management Fee otherwise payable to Hastings or its Advisory Affiliates for
           any calendar year is reduced by 100% of Fees paid by Portfolio Companies that
           exceed unreimbursed expenses (including unreimbursed unconsummated
           transaction expenses) during any calendar year, other than a board monitoring fee
           per portfolio company not exceeding $150,000 per year. The relevant Fees paid
           by Portfolio Companies are treated as an offset against future Management Fees;
           provided, however, that the Management Fee will not be reduced below zero.

           However, a Board Fee may be charged to each Portfolio Company and will not
           be offset against the Management Fee unless it exceeds $150,000 per Portfolio
           Company per year. In addition, reimbursement by a Portfolio Company to
           Hastings for amounts paid to an operating partner or consultant who is hired by
           Hastings to perform work at Portfolio Companies, such as interim CFOs, are not
           subject to the Management Fee offset. For Fund V, the portion of Board Fees
           paid to Hastings that are attributable to the fund’s ownership interest in a given
           portfolio company will reduce the Management Fee to the extent such fees are in
           excess of $150,000 per Portfolio Company per year.

           Please refer to the applicable Fund Governing Documents for any Portfolio
           Company fees imposed, caps and any offsets to those fees.

           It is critical that Investors/Clients refer to the relevant Governing
           Documents for a complete understanding of how Hastings is compensated
           for its advisory services.

           Additionally, affiliates of Hastings may provide certain functions to Hastings and
           its portfolio companies (such as insurance consulting services), that would
           otherwise be performed by third parties. However, Hastings and Hastings
           portfolio companies hold policies directly with external insurance companies and
           as a result, do not pay the affiliate directly. Any earned commission by the
           affiliate is from the respective insurance companies for generating business.
           Please see Item 10 of this Form for more information about this affiliation.

Item 5.B   Describe whether you deduct fees from clients’ assets or bill clients for fees
...

ITEM 7 – TYPES OF CLIENTS

Describe the types of clients to whom you generally provide investment advice, such as
individuals, trusts, investment companies, or pension plans. If you have any requirements for
opening or maintaining an account, such as a minimum account size, disclose the requirements.

Hastings currently provides discretionary investment advisory services to the Funds and the Co-
Investment Vehicle, which are each a pooled investment vehicle operating as private investment fund.

The Funds are organized as a limited partnership and the Co-Investment Vehicle is organized as a
limited liability company. The Funds are not considered “investment companies” as defined under the
Investment Company Act, pursuant to definition exemptions under Sections 3(c)(1) of the Investment
Company Act.

Each Investor in a Fund must meet certain eligibility provisions. Interests in the Funds are generally
offered to (A) U.S. investors who are (i) accredited investors within the meaning of Regulation D of the
Securities Act, as amended in the case of Fund III or qualified purchasers within the meaning of
Regulation D of the Securities Act, as amended in the case of Fund IV; (ii) qualified clients as defined
in Rule 205-3 under the Advisers Act (“Qualified Clients”); and (iii) non-U.S. investors.

The minimum investment in a Fund varies depending on the Fund, with the Advisory Affiliate of a
Fund reserving the right to accept capital commitments of lesser amounts at its discretion. Fund III,
Fund IV and Fund V impose a minimum capital commitment of $100,000, subject to waiver by the
General Partner. The minimum investment in the Co-Investment Vehicle was $20,000.