KarpReilly LLC

Item 5. Fees and Compensation

As compensation for investment supervisory services rendered to the Funds, the Adviser receives
from each such Fund (though it is possible that Co-Investment Vehicles, Feeder Vehicles and
Alternative Investment Vehicles formed at a later date may not pay such a fee) an advisory fee
(each, an “Advisory Fee”). Advisory Fees paid by a Main Fund are indirectly borne by investors
in such Main Fund (including, if applicable, any Feeder Vehicles).

The precise amount of, and the manner and calculation of, the Advisory Fees for each Fund are
established by the Adviser, as modified by negotiations with investors in the applicable Fund,
and are set forth in such Fund’s Advisory Agreement, organizational documents and/or other
documentation received by each investor prior to investment in such Fund. The Advisory Fees
and other fees and distributions described above are generally subject to waiver or reduction by
the Adviser in its sole discretion, both voluntarily and on a negotiated basis with selected
investors. The fee structures described above may be modified from time to time. Fees may
differ from one Fund to another, as well as among investors in the same Fund.

Certain investors in the Funds that are employees, business associates and other “friends and
family” of the Adviser, its affiliates or their personnel (including any related entity established
by any of the foregoing, such as trusts, charitable programs, endowments or related programs,
family investment vehicles and other estate planning vehicles) (collectively, “Adviser Investors”)
will not typically pay Advisory Fees or Carried Interest in connection with their investment in a
Fund.

Advisory Fees received from the Funds are payable quarterly in advance on the first business day
of each quarter.

Upon termination of an Advisory Agreement, Advisory Fees that have been prepaid are
generally returned on a prorated basis.

The Advisory Fees paid by a Fund will generally be reduced by the amount of fees paid by such
Fund to persons acting as a placement agent in connection with the offer and sale of interests in
such Fund to certain potential investors, as well as by fees incurred by the Adviser in connection
with the organization of such Fund that exceed a limit specified in such Fund’s limited
partnership agreement or analogous organizational documents. In addition, the Adviser may
waive or reduce all or a portion of the Advisory Fee paid by a Fund in full or partial satisfaction

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of any obligation of the Adviser and certain employees and affiliates of the Adviser to invest in
or alongside such Fund.

In addition, the Adviser and its affiliates may perform management, advisory, transaction-
related, financial advisory and other services (“Related Services”) for, and receive fees from,
actual or prospective portfolio companies or other investment vehicles of the Funds, including
fees in connection with monitoring (and any associated accelerated of monitoring fees), mergers,
acquisitions, add-on acquisitions, refinancings, public offerings, sales and similar transactions
(collectively, “Other Fees”). Although these fees are in addition to the Advisory Fees, the
Adviser will in some circumstances reduce the amount of Advisory Fees paid by the applicable
Fund in connection with the receipt of such fees. The amount and manner of such reduction is set
forth in the Advisory Agreement and/or organizational documents of the applicable Fund. For a
discussion of material conflicts of interest created by the receipt of such fees, please see Item 11
below.

As noted above, the Adviser and its affiliates receive “monitoring fees” pursuant to monitoring
agreements with portfolio companies of the Funds governing the advice, consultation and other
similar ongoing services provided by the Adviser to such portfolio companies. The terms of a
monitoring agreement may include (among other things) annual automatic renewals, the payment
of monitoring fees (which may be fixed fees or calculated as a percentage of EBIDTA or similar
performance metric), and the acceleration of payment of the monitoring fees upon certain
termination events, including the occurrence of an initial public offering or strategic exit. The
accelerated monitoring fee may be calculated as the present value of hypothetical future
payments, which may be based on an assumed growth in performance, based on an assumed
growth of EBITDA or similar metric, and may be calculated using a discount rate as low as the
risk-free rate, as determined by the Adviser. Since the monitoring agreements may have
prolonged terms (often exceeding ten years and/or subject to automatic extensions and renewal),
the financial effect of such acceleration may be substantial, particularly in the event such
circumstances occur early in the life of the Fund’s investment in such portfolio company.

Other Fees are often substantial and may be paid in cash prospective portfolio companies or
investment vehicles (or rights thereto) or otherwise. The payment of Other Fees and
reimbursements by portfolio companies and prospective portfolio companies will, in some, but
not all, circumstances create a conflict of interest between the Adviser and its affiliates, and the
Funds and their investors, because the amounts of these Other Fees and reimbursements are often
substantial and the Funds and their investors generally do not have a direct interest in these fees
and reimbursements. The Adviser determines the amount and timing of these Other Fees for the
services provided and reimbursements in its own discretion, subject to agreements with sellers,
buyers, and management teams, the board of directors of or lenders to portfolio companies,
and/or third-party co-investors in its transactions. Generally, the amount of such fees and
reimbursements will not be disclosed to investors in the Funds.

In many cases with respect to the implementation of the arrangements described above, there is
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Item 7. Types of Clients

The Adviser currently provides investment supervisory services to the Funds. Investment advice
is provided directly to the Funds (subject to the direction and control of the general partner of
each such Fund, if applicable) and not individually to investors in such Fund.

Interests in the Funds are offered pursuant to applicable exemptions from registration under the
Securities Act and the 1940 Act. Investors in the Funds are generally “qualified purchasers” as
defined in the 1940 Act, and may include, among others, pension and profit sharing plans,
corporations, limited partnerships and limited liability companies or other entities.