Healthquest Capital Management LP

Item 5 – Fees and Compensation

A.      Fee Schedule
The fees and compensation payable to the Firm are negotiable and vary among its Clients.
However, the range of compensation is generally as follows:
        1.      Management Fees
With respect to its Clients, HealthQuest typically receives a quarterly asset-based
management fee calculated as a percentage of the aggregate capital commitments from all
Investors, payable quarterly in advance. The management fee for the Funds is up to an annual
limit of 2.5% of committed capital, but is subject to negotiation for any particular Fund.
Management fees for SPVs are subject to negotiation and may vary from those paid by the
Funds.
        2.      Performance-based Compensation
Each Fund’s General Partner, as applicable, generally receives carried interest equal to a
percentage of all realized net profits, as described more fully in each Fund’s Governing
Documents. The carried interest is generally subject to a claw back at the end of life of a Fund,
as applicable, if the General Partner has received excess cumulative distributions. Each SPV’s
General Partner, as applicable, may also receive carried interest as described more fully in
each SPV’s Governing Documents.
The carried interest will only be charged to either accounts of Investors who are “qualified
clients” as defined in Rule 205-3 of the Investment Advisers Act of 1940, as amended
(“Advisers Act”) or accounts of Investors who invested in the applicable Client prior to the
registration of the Firm as an investment adviser.
        3.      Fee Comparison
Client expenses, including management fees and any performance-based compensation, may
constitute a higher percentage of average net assets than could be found in other investment
programs.
B.      Payment of Fees
Management fees, performance-based compensation (carried interest), and third-party fees
(discussed below) are deducted from Client assets. Management fees, which are paid in
advance, are generally withdrawn at the beginning of the quarter but may be deferred to the
end of the year if permitted by a Client’s Governing Documents. A Fund or SPV may pay
carried interest in accordance with the terms of its Governing Documents.
C.      Third-Party Fees and other Client Expenses
Expenses borne by each Client are described in detail in the applicable Governing Documents
and may vary among Clients. In general, Clients shall be responsible for all costs, expenses,
liabilities and obligations incurred in connection with their operations and/or investments,
which may include, without limitation, all costs and expenses incurred in the purchase,
holding or sale or exchange or other disposition of securities, including, but not by way of

limitation, reasonable private placement and finder’s fees paid to persons other than the
General Partner or members of the General Partner or any of their affiliates; unreimbursed
costs and expenses incurred in connection with any transfer or proposed transfer of
Investors’ interests in Clients or the default by any Investor in the payment of capital
contributions; real property or personal property taxes on investments; brokerage fees; stock
distribution agent fees; taxes applicable to the Clients on account of their operations or
investment activities; financing costs and interest and other amounts paid in connection with
borrowings of Clients; fees incurred in connection with the maintenance of bank or custodian
accounts; legal, audit, and other expenses incurred in connection with the registration of the
Clients’ portfolio securities under the Securities Act of 1933 (the “Securities Act”); legal, tax
advisory, accounting and other fees and expenses incurred in connection with the purchase
or sale or exchange or other disposition of securities (whether or not such purchase, sale or
exchange or other disposition is ultimately consummated); amendments to, and waivers,
consents or approvals pursuant to, applicable Governing Documents; research expenses,
including research-related cloud storage and fees and expenses of research reports, surveys,
white papers, statistical and/or market data; fees and expenses of investment advisers and
independent consultants incurred in investigating and evaluating investment opportunities
(other than the fees and expenses of investment advisers and independent consultants
engaged to offer the type expertise that could have been offered by one or more of investment
team members but the General Partner engaged such investment adviser or independent
consultant in lieu of using the services of an investment team member); and payments made
to industry advisers up to an annual limit per the Funds’ Governing Documents, provided that
such industry advisers are not members of the General Partner or otherwise providing advice
that would be reasonably expected to be provided by an employee of HealthQuest. The
Clients shall also bear the fees of independent certified public accountants incurred in
connection with the annual audit of the Clients’ books and the preparation of the Clients’
annual tax return; costs of independent appraisers; legal expenses of the Clients; accounting
and administration expenses paid for the maintenance of the Clients’ books and records,
including preparation of reports and administration of anti-money laundering compliance
and accounting; costs associated with developing, licensing, implementing, maintaining or
upgrading any web portal, extranet tools, computer software or other administrative or
reporting tools (including subscription-based services) for the benefit of the Clients or their
Investors; premiums associated with insurance, if any, to insure against fraud or crimes
against the Clients or any claims that could be made directly against the Clients or that would
give rise to Client liability (the purchase of such insurance, if any, shall be in the sole
discretion of the General Partners); preparation and other expenses associated with annual
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Item 7 – Types of Clients

HealthQuest provides investment advice and management to its Clients which are pooled
investment vehicles and may in the future provide the same or similar services to other
privately placed investment funds and/or other clients.
HealthQuest intends to restrict the number of Investors in a Fund and will offer Interests only
through non-public transactions in order to maintain their exclusion from “investment
company” status under the Investment Company Act of 1940, as amended (the “Investment
Company Act”).
Prospective Investors in a Fund must meet eligibility criteria and are subject to certain
withdrawal requirements and limitations. Prospective Investors are encouraged to
thoroughly review a Fund’s Governing Documents, which set forth all of the Funds’ terms in
detail. Though the Clients generally pursue similar strategies, offering terms may differ.
Terms for funds which are SPVs formed primarily to invest in a specific target company of a
Fund are generally similar to their respective Funds but can be negotiated on a case by case
basis and may differ from those of such respective Funds.
Each Investor must be an “accredited Investor” (as defined in Regulation D under the
Securities Act) and a “qualified client” (as defined in Rule 205-3 under the Advisers Act) and
must meet other criteria as specified in the Governing Documents. The minimum initial
investment varies by Fund and is subject to waiver at the discretion of HealthQuest.