L Squared Capital Management LP

FEES AND COMPENSATION

L Squared and its affiliates, as applicable, are generally entitled to receive a management fee
(“Management Fee”) and carried interest allocation (“Carried Interest”) in connection with the
advisory services provided to Clients. L Squared typically also shares in all or a portion of the
additional fees described below. The Firm and its employees provide services to portfolio
companies with or without additional compensation, including but not limited to serving as
appointed directors of portfolio companies. Additional compensation is paid by L Squared or the
portfolio company from time to time. If paid by the portfolio company and not subject to an offset
against L Squared’s compensation, the compensation may be indirectly borne by a Fund and its
investors along with the other owners of the portfolio company. L Squared may agree to different
or reduced Management Fee and Carried Interest arrangements with an individual Fund or
investors in a Fund, including investors who are affiliated with L Squared, through consulting/side
letter agreements or other similar arrangements.

The Funds typically bear certain out-of-pocket expenses incurred by L Squared and its affiliates
in connection with the services provided to the Funds, which are set forth in the Funds’ governing
documents and consulting/side letter agreements entered into between investors and L Squared.
Information about L Squared’s typical fee structures are detailed below.

Please note that the information provided below is intended to be a general summary of fees
charged and other general business practices of L Squared in connection with the advisory services
it provides to Clients. Because L Squared generally structures its investments through separate
series, the fees payable by an investor for any particular investment varies by investment on a
series-by-series basis. The descriptions below are for summary purposes only and are
supplemented and superseded in their entirety by the consulting/side letter agreements between
each applicable investor and L Squared, and the governing documents of the Funds.

Management Fees

Investors in the Funds pay (directly or indirectly through the Funds) Management Fees to L
Squared as more fully described in the individual consulting/side letter agreements entered into
between L Squared and each applicable investor and the governing documents for each Fund.
These Management Fees are typically calculated and charged quarterly in advance based upon
each investor’s committed capital.

Typically, L Squared Management Fees are based on a fixed percentage of committed capital
during the Management Fee Period; however, certain of our Funds continue to pay Management
Fees after the Management Fee Period based on a fixed percentage of invested capital. Typically,
investors in a Fund pay the Management Fees and other fees, including Breakup Fees, Transaction

Fees and Monitoring Fees (see definitions below) as more fully described in the consulting/side
letter agreement and governing documents related to a respective Fund.

The Funds generally invest on a long-term basis. Accordingly, Management Fees and other fees
are expected to be paid, except as otherwise described in the relevant governing documents, over
the term of the applicable Fund, and investors generally are not permitted to withdraw or redeem
interests in the Fund.

Management Fee Offsets

Generally, Management Fees payable to L Squared are offset by certain other fees as more
specifically described in each applicable investor’s consulting/side letter agreement with L
Squared and the governing documents for each Fund. These fee offsets typically include
Monitoring Fees, Breakup Fees and Transaction Fees as such terms are defined in the relevant
agreement (collectively referred to as “Fee Offsets”). Typically, Management Fees are calculated
and charged quarterly in advance, however, these fees are reduced by the amount of the prior
quarter’s Fee Offsets. These Management Fees and Fee Offsets may have other specific
computational and contractual terms as more fully described in each applicable investor’s
consulting/side letter agreement and the governing documents for each Fund.

Transaction Fees

L Squared receives Transaction Fees from portfolio companies from time to time. These fees
relate to payment for services provided to portfolio companies in connection with certain
transactions. Any Transaction Fees received by L Squared from portfolio companies in which the
Funds are invested are typically 100% offset against Management Fees paid by investors.

Monitoring Fees

L Squared typically receives Monitoring Fees from portfolio companies. While it varies from
Fund to Fund, up to 100% of Monitoring Fees will offset the Management Fee paid by investors,
in a process more fully described in each Fund’s governing documents and each applicable
investor’s consulting/side letter agreement. Generally, Monitoring Fees are consulting fees,
directors’ fees and other similar fees received by L Squared or L Squared management persons
with respect to the investment in any portfolio company held by a Fund. Monitoring Fees may be
subject to a reduction by any amount necessary to reimburse L Squared management persons for
all unreimbursed costs and expenses incurred by them in connection with any consummated or
unconsummated transactions. These reductions may not include certain payments received by L
Squared or management personnel for services performed as an employee in any similar capacity
for a portfolio company held by a Fund and may not include certain Breakup Fees (as described
below) and certain Transaction Fees.

Breakup Fees

Breakup Fees are described in detail in each Fund’s governing documents and each applicable
investor’s consulting/side letter agreement. Generally, Breakup Fees are equal to 100% of all
commitment fees, breakup fees and litigation proceeds received by a Fund, L Squared or any of
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TYPES OF CLIENTS

L Squared currently provides investment advisory services to pooled investment vehicles.
Investment advice is provided directly to the Funds. Investors in the Funds are “qualified
purchasers” and “accredited investors” as such terms are defined in the Investment Company Act
3(c)(7) and may include, pooled investment vehicles, trusts, family offices, individuals, high net
worth individuals, corporations, limited partnerships, limited liability companies and other such
entities or suitable investors.

There is no minimum investment amount required of investors set forth in each of Fund’s
governing documents; however, the Firm reserves the right to set minimum investment
requirements. Investors are typically subject to minimum investment periods as more fully
described in the governing documents for each Fund.

      METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

Investment Objectives and Strategies

The principal investment strategy pursued by L Squared involves seeking long-term growth
investment opportunities in privately held companies including buyouts, recapitalizations and
founder liquidity events. The Firm actively seeks companies that it believes are well positioned
for transformational long-term growth. L Squared focuses on long-term value creation and allows
management teams to make decisions without the trade-offs associated with shorter-term
investment horizons. The Firm seeks to add significant value through high level strategic planning

and sourcing and executing accretive acquisitions. The Firm sources deals based on target
revenues, target EBITDA, target company growth profile, geography and ownership, among other
factors. More detailed strategy decisions are detailed below; however, complete investment
strategies and methods of analysis are set forth in the governing documents for each Fund.

There can be no assurance that L Squared will achieve the investment objectives of the Funds.
Investors may sustain losses including the potential for loss of principal.

The Firm’s investment strategy incorporates the following elements: (i) multi-faceted origination
capabilities; (ii) disciplined investing; (iii) diversification; (iv) transaction control; and (v) active
portfolio management.

Sourcing Deals
L Squared employs consistent, targeted marketing efforts in order to source proprietary deal flow
as well as to provide access to deal flow through auction processes. The Firm believes it has
developed strong relationships with industry service providers including investment bankers, deal
brokers, lawyers, accountants, financing sources and with the portfolio company executives with
whom the Firm has previously invested. L Squared seeks to leverage these relationships to support
industry-targeted marketing efforts aimed at identifying quality, small to medium sized growth-
oriented companies that compete in these markets. The Firm’s direct marketing efforts include
periodic press releases to update the marketplace on recent happenings of L Squared and its
portfolio companies, formal relationships with deal sourcing firms, direct calling efforts and
relationships with search firms. In a number of instances, the Firm has coordinated direct
marketing efforts on behalf of its portfolio companies to solicit acquisition opportunities.

L Squared also seeks to proactively market to small and middle market investment bankers, buy-
side agents, boutique intermediaries and other deal brokers. The objective of these efforts is to see
as many high-quality deals as possible in an effort to ensure that the Firm is reviewing the
opportunities that best fit L Squared’s investment criteria. While the Firm does not believe that it
depends solely on these sources for investment opportunities, the Firm recognizes that many
quality companies utilize investment bankers and these channels represent a source of high-quality
deal flow. L Squared will participate in auctions where it believes that the Firm has an advantage
relative to other bidders, either through industry knowledge or through a prior relationship with
the seller intermediary.

Upfront Screening
The Firm utilizes a disciplined, rigorous investment screening process focused on growth
investments. In general, the Firm focuses on areas where L Squared has previously invested,
including markets with above average, sustainable growth rates and companies which are well
positioned in those markets. As part of the comprehensive upfront screening process, the Firm
aims to complete detailed analyses of the target’s growth prospects, end-markets, competition,
historical and projected financial performance and customer and supplier dynamics. Importantly,
the upfront investment screening process generally includes at least one meeting with the target’s
management team early in the process to ensure the target has successful, proven management
teams. As part of the initial screening, the Firm generally conducts multiple meetings with
potential financing sources to get comfortable with available debt packages. The Firm also
develops preliminary financial models to confirm the likelihood of a successful investment. The

Firm regularly discusses new opportunities at weekly meetings to leverage L Squared’s broad
experience and various points-of-view.

Obtaining the Deal
To help ensure L Squared “locks up” a transaction, whether it is proprietary or part of an auction
process, the Firm seeks to maintain continuous contact with both the seller and intermediary,
respectively, to emphasize interest in the deal. The Firm seeks to leverage its broad network in
this effort to ensure that it is using every possible tool at its disposal to help obtain a deal. As part
of the bidding process, the Firm’s general practice involves creating a detailed bid package that
includes not only a letter of interest/term sheet, but also a continuing interest letter, timetable to
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