Hildred Capital Management LLC

FEES AND COMPENSATION

       In general, the Firm receives a management fee and carried interest in connection with
advisory services. The Firm or other Firm entities or affiliates receive additional compensation in
connection with management and other services performed for portfolio companies of the Funds
and, except as otherwise set forth in the applicable Governing Documents, such additional
compensation generally will offset in whole or in part the management fees otherwise payable to
the Firm in accordance with the relevant Governing Documents. In addition, in certain
circumstances the Firm receives compensation for management and other services performed in
connection with co-investments made in portfolio companies of the Funds. Investors in a Fund
also bear certain expenses. Investors should consult the Governing Documents for more details
regarding the calculation of fees and expenses.

Management Fees

         In general, Fund II, Fund III, HPPI and ACP Fund (the “Fee Paying Funds”) pay HCM, quarterly in
advance, a management fee (the “Management Fee”) equal to a percentage of aggregate Fund II
and Fund III investor capital commitments (“Commitments”) held by investors not designated as
“affiliated partners” by the General Partner. Following the sixth anniversary (fifth for Fund II) of
the initial closing date (or earlier upon the occurrence of certain events as set forth in the Governing
Documents), the Management Fee rate will be reduced and generally will equal a percentage of (i)
the aggregate investment contributions made (or payable to the Fee Paying Funds pursuant to capital
call notices then issued or to be issued to repay indebtedness incurred by the Fee Paying Funds and
used to fund an investment), less (ii) the aggregate amount of investment contributions with respect
to the portion of each investment that has been disposed of or permanently written-down, in each
case with respect to investors not designated as “affiliated partners.” Investors participating in a
closing after the initial closing date bear the Management Fee retroactive to the initial closing date
as if such investors were admitted for their full Commitment on the initial closing date and, in
addition, will be charged an amount equal to the product of (a) the prime rate plus a percentage
rate per annum multiplied by (b) the amount of such assessed Management Fees, calculated from
the date such Management Fee payments would have been due if such investors were admitted for
their full Commitment on the initial closing date. The Management Fee will be payable until all
portfolio investments are distributed or until HCM’s relationship with the Fee-Paying Funds is
       terminated for other reasons (as described in the relevant Governing Documents).

       The Management Fee assessed for each Co-Invest Fund (as well as any relevant offsets) is
described in further detail in such Co-Invest Fund’s governing documents.

       It is expected that future Funds generally will have a similar fee structure. However, the

Executive Fund will not pay HCM Management Fees.

        With respect to the Fee-Paying Funds, the Management Fee will be reduced by an amount
equal to 100% of transaction fees attributable to investors not designated as “affiliated partners”
by the General Partner. Transaction fees include: (i) directors’ fees, financial consulting fees or
advisory fees paid to the General Partner with respect to any Fund investment; (ii) transaction fees
paid to the General Partner with respect to any Fund investment; and (iii) break-up fees with respect
to Fund transactions not completed that are paid to the General Partner, in each case net of certain
expenses (including those described below) as set forth in the Governing Documents; but not
including, in any event, any amount received by the General Partner, any operations group
established by the General Partner (the “Operations Group”) or a member thereof or other person
from a portfolio company (a) as reimbursement for expenses directly related to such portfolio
company, (b) as payment for services provided to such portfolio company in the ordinary course
of such portfolio company’s business, (c) as compensation for services provided by the General
Partner or other person as an employee of or in a similar capacity for such portfolio company or
(d) as compensation (including fees, incentive equity or other stock awards) for services rendered
by the Operations Group (or a member thereof) to a portfolio company or prospective portfolio
company.

        As a matter of practice, HCM is typically paid fees of the type referred to in the preceding
paragraph from, on behalf of or with respect to co-investors in an investment. The receipt of such
fees will not reduce the Management Fee payable by any Fund(s) that have also invested in such
investment, and as a result a Fund will, in most cases, only benefit with respect to its allocable
portion of any such fee and not the portion of any fee related to General Partner or affiliated partners
commitments or that relates to such co-investors, which have the potential to be significant.
Similarly, in certain circumstances, HCM expects that co-investors or other parties will negotiate
the right to share a portion of such fees from a particular investment, and the above-described offset
percentage will be applied after excluding any amounts paid to such persons. Additionally, as
further described below and in the Governing Documents of each Fund, it is HCM’s practice to use
or retain certain Operating Partners (defined below) to provide services to (or with respect to)
certain portfolio companies in which one or more Funds invest. Such operating partners generally
receive compensation and other amounts described herein from the relevant portfolio companies
or Funds to which they provide services, but no such amounts will result in additional offsets to
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TYPES OF CLIENTS

        The Firm provides investment advice to the Funds. The Funds may include investment
partnerships or other investment entities formed under domestic or foreign laws and operated as
exempt investment pools under the Investment Company Act. The investors participating in the
Funds may include individuals, banks or thrift institutions, other investment entities, university
endowments, sovereign wealth funds, family offices, pension and profit-sharing plans, trusts,
estates or charitable organizations or other corporations or business entities and may include,

directly or indirectly, principals or other employees of the Firm and its affiliates and members of
their families, Operating Partners or other service providers retained by the Firm.

        The Funds may include alternative investment vehicles established from time to time in
order to permit one or more investors to participate in one or more particular investment
opportunities in a manner desirable for tax, regulatory or other reasons. Alternative investment
vehicle sponsors generally have limited discretion to invest the assets of these vehicles independent
of limitations or other procedures set forth in the organizational documents of such vehicles and
the related Fund.

        Fund II, Fund III and HPPI generally have a minimum investment amount of $5 million for
third-party investors, and interests therein are offered and sold solely to accredited investors that
are also qualified clients (or qualified knowledgeable HCM personnel) and, unless waived in the
discretion of HCM, qualified purchasers. Such minimum investment amount may be waived by
HCM. Investors in Co-Investment Funds are subject to such minimum amounts as may be
disclosed in the relevant Co-Invest Fund’s Governing Documents.

             METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

Investment Strategy

        The Firm intends to make primarily growth equity investments in lower middle market and
middle market healthcare-oriented companies generally located in the United States or Canada.
The Firm’s overall investment philosophy is to seek to achieve long-term capital appreciation
through a value-oriented approach, while mitigating operating and financial risk across both
portfolio companies and the overall portfolio. To achieve this overarching philosophy, the Firm
intends to apply a robust set of investment criteria to drive deal sourcing and screening efforts in
order focus the Funds on the most attractive risk-adjusted opportunities available. The Firm
believes that this approach and overall strategy has the potential to result in the creation of larger
and improved portfolio companies that interest investors at attractive valuations, resulting in
attractive risk-adjusted investment returns to limited partners. Each Fund’s specific investment
strategy is discussed in the applicable Memorandum.

        There can be no assurance that the Firm will achieve the investment objectives of any Fund
and a loss of investment is possible.

Risks of Investment

        Each Fund and its investors bear the risk of loss that the Firm’s investment strategy entails.
The risks involved with the Firm’s investment strategy and an investment in a Fund include, but
are not limited to:

       Business Risks. A Fund’s investment portfolio is expected to consist primarily of securities
issued by privately held companies, and operating results in a specified period will be difficult to

predict. Such investments involve a high degree of business and financial risk that can result in
substantial losses.

       Future and Past Performance. The performance of prior investments by the Firm’s
principals (the “Principals”) is not necessarily indicative of a Fund’s future results. While the
Firm intends for a Fund to make investments that have estimated returns commensurate with the
expected risks undertaken, there can be no assurances that any targeted internal rate of return will
be achieved. On any given investment, loss of principal is possible.

       Investment in Junior Securities. The securities in which a Fund will invest may be among
the most junior in a portfolio company’s capital structure and, thus, subject to the greatest risk of
loss. Generally, there will be no collateral to protect a Fund’s investment once made.

       Concentration of Investments. Each Fund will participate in a limited number of
investments and intends to make all of its investments in the healthcare industry and within a short
period of time. As a result, a Fund’s investment portfolio could become highly concentrated, and
the performance of a few holdings or of the healthcare industry may substantially affect its
aggregate return. Furthermore, to the extent that the capital raised is less than the targeted amount,
a Fund may invest in fewer portfolio companies and thus be less diversified.

        A Fund may provide bridge financing to facilitate portfolio company investments. It is
possible that all or a portion of a bridge financing will not be recouped within the time period
specified in the applicable Governing Documents, in which case the investment would be treated
as a permanent investment of a Fund. As a result, a Fund’s portfolio could become more
concentrated with respect to such investment than initially expected.

       Lack of Sufficient Investment Opportunities. The business of identifying, structuring and
completing private equity transactions is highly competitive and involves a high degree of
uncertainty. It is possible that a Fund will never be fully invested if enough sufficiently attractive
investments are not identified. However, investors will be required to bear the Management Fee
through a Fund during its investment period based on the entire amount of the investors’
Commitments and other expenses as set forth in the applicable Governing Documents.
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