Lake Capital Management LLC

FEES AND COMPENSATION

       The following is a general description of fees, compensation, and expenses of the Funds.
Differences exist between the Funds, and a Fund does not necessarily charge certain fees,
compensation, or expenses that the other Fund charges. The Partnership Agreements of the
Funds describe fees, compensation and expenses in greater detail.

        In general, the Management Company receives a management fee (the “Management
Fee”) and the applicable General Partner receives a carried interest in connection with advisory
services provided to each Fund. For each Fund, the carried interest distributed to a General
Partner is generally subject to a potential giveback after the final distribution of the Fund’s assets
if the General Partner has received excess cumulative distributions. To the extent specified in
the applicable Fund Documents, the Management Company or other Lake entities or affiliates
are permitted to, and often do, receive additional compensation in connection with management
and other services performed for portfolio companies (e.g., monitoring or other fees) of Funds
and the applicable Fund Documents typically provide that a specified percentage of the portion
of such additional compensation attributable to the Fund’s investment in a portfolio company
will be credited against the Management Fees otherwise payable to the Management Company.
Investors should review the applicable Fund’s Partnership Agreement for details regarding the
fee structures summarized below. Terms not defined herein are defined in the applicable
Partnership Agreement.

Management Fees

       Fund I

      Initially, Fund I paid a Management Fee equal to 2% on an annual basis of aggregate
Commitments. Effective upon the receipt of Fund II’s Management Fees, Fund I’s Management
Fee has been reduced to 1.5% per annum of (i) the aggregate amount of Investment

Contributions less (ii) distributions to the extent of Investment Contributions made with respect
to investments that have been disposed of and capital invested in any investment that has been
completely written-off (in accordance with the valuation provisions of Fund I’s Partnership
Agreement) to the extent distributions have not been made with respect thereto, in each case as
determined on the first day of the period with respect to which a determination is being made.
The amount of Management Fees will not be reduced based on reductions in investment value,
except where specified by Fund I’s Partnership Agreement.

         As set forth in Fund I’s Partnership Agreement, Fund I’s Management Fee is generally
reduced, although not below zero, by a portion of directors’ fees, consulting fees, commitment
fees, monitoring fees, break-up fees, closing fees, investment banking fees, placement fees and
other similar fees (collectively, “Supplemental Fees”) paid to the Advisers and certain of their
affiliates and attributable to Fund I’s investment in the applicable portfolio company. To the
extent that such an offset credit would reduce Fund I’s Management Fee for a given period
below zero, the credit will be carried forward for future application against payable Management
Fees and if a credit remains upon liquidation, a payment will be made crediting limited partners
unless a limited partner has elected to waive such amount (e.g., where an adverse tax
consequence potentially will result). A fee offset credit typically will not apply to the portion of
any Supplemental Fee that relates to co-investors, which have the potential to be significant.

       Fund II

        Initially, Fund II paid a Management Fee equal to 2% on an annual basis of the aggregate
Commitments. Since Fund II’s Commitment Period has ended, its Management Fee has been
reduced to 1.5% per annum of (i) the aggregate amount of Investment Contributions and deemed
contributions made with respect thereto and, subject to certain limitations, guarantees of portfolio
company related indebtedness, less (ii) distributions to the extent of Investment Contributions
made with respect to investments that have been disposed of and capital invested in any
investment that has been completely written-off (in accordance with the valuation provisions of
Fund II’s Partnership Agreement) to the extent distributions have not been made with respect
thereto, in each case as determined on the first day of the period with respect to which a
determination is being made. The amount of Management Fees will not be reduced based on
reductions in investment value, except where specified by Fund II’s Partnership Agreement.

        As set forth in Fund II’s Partnership Agreement, Fund II’s Management Fee is generally
reduced, although not below zero, by a portion of Supplemental Fees paid to the Advisers and
certain of their affiliates and attributable to Fund II’s investment in the applicable portfolio
company. To the extent that such an offset credit would reduce Fund II’s Management Fee for a
given period below zero, the credit will be carried forward for future application against payable
Management Fees and if a credit remains upon liquidation, a payment will be made crediting
limited partners unless a limited partner has elected to waive such amount (e.g., where an
adverse tax consequence potentially will result). A fee offset credit typically will not apply to the
portion of any Supplemental Fee that relates to co-investors, which have the potential to be
significant.

       In addition, Fund II’s Partnership Agreement allows General Partner II to waive or agree
to reduce the Management Fee. Certain waived portions of the Management Fee are treated by

the Partnership Agreement as a deemed capital contribution by General Partner II, which is
effectively invested in Fund II on General Partner II’s behalf, and operates to reduce the amount
of capital General Partner II would otherwise be required to contribute to Fund II. The limited
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TYPES OF CLIENTS

         The Management Company provides investment advice solely to its Fund clients, and
references throughout this Brochure to “clients” and to the Advisers’ related duties to and
practices on behalf of its clients and/or investors should be construed accordingly. The Funds
generally include investment partnerships or other investment entities formed under domestic or
non-U.S. laws and operated as exempt investment pools under the Investment Company Act of
1940, as amended. The investors participating in the Funds generally 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 or other investment entities, and from time to time include,
directly or indirectly, principals or other employees of the Management Company and its
affiliates.

        Fund I and Fund II are closed to new investors, but each Fund generally had a minimum
investment amount of $5 million for third-party investors, which each Fund’s General Partner
had the right to waive. In most circumstances investors in the Funds must meet minimum
suitability and net worth qualifications prior to investing in the Funds. Generally, investors must
be (i) “accredited investors” as defined under Regulation D of the Securities Act of 1933, as
amended and (ii) for certain funds, either “qualified purchasers” or “knowledgeable employees”
as defined under the Investment Company Act of 1940, as amended.

            METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

General

        The Management Company provides day-to-day investment advisory services to the
Funds; provided that all decisions, consents and other determinations (including, without
limitation, decisions, consents and other determinations with respect to a Fund relating to the
acquisition and disposition of the Fund’s investments, distributions by the Fund of cash and
securities and amendments to the respective Partnership Agreement) are made by the General
Partner. The General Partner has ultimate decision-making authority for the respective Fund.
Because the Advisers have common owners and personnel, the Advisers’ general investment
methodology is described below. Investors should refer to the applicable Fund Documents for
further information regarding investment strategies employed for a specific Fund.

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

Investment Strategy and Process

        The Advisers typically invest a Fund’s capital in a limited number of private equity and
equity-related investments in middle-market service-based and related companies. The Advisers
typically seek to acquire an enterprise with revenues of $25 million to $150 million as the initial
platform company for a portfolio investment initiative. After acquiring a platform, the Advisers
generally will seek to accelerate organic growth by adding complementary service offerings and
geographic scope (including through add-on acquisitions) to enable the portfolio company to
achieve scale, market positioning, improved profitability and market-reach objectives, and to
position the company strategically for a successful exit.

         The Advisers focus principally on growth companies within the services sector and
generally target investments in the following segments, among others: (i) marketing services
(e.g., sales promotion, direct response, interactive marketing, public relations, media services and
event services); (ii) finance-related services (e.g., accounting-related, cost recovery, billing and
financial services consulting); (iii) operational and infrastructure services (e.g., human capital
management, staffing, operational consulting, distribution, logistics, technology consulting and
related outsourced services); (iv) specialty services (e.g., corporate training, in-store retail
services and government services); (v) specialty consumer services (e.g., consumer products
marketers and consumer financial services); and (vi) franchising. The Advisers believe the
services sector generally is highly fragmented and provides investment opportunities that have
the potential to produce substantial capital appreciation. The Advisers also believe these
segments can provide significant organic revenue growth opportunities. Further, opportunities
typically exist to meaningfully enhance profit margins of service-based businesses given the
economies of scale that can be achieved.

        The principals participate in the Advisers’ investment decisions. The Advisers’
investment process consists of: (i) origination and evaluation; (ii) due diligence; (iii) customized
transaction and capital structures; (iv) transaction execution; (v) active operations oversight; and
(vi) investment realization.

        The principals draw on their experience, as well as utilize their network of key
relationships to cultivate deal flow in the small to middle-market.

        Once a target is identified, the Advisers generally conduct on-site meetings with the
company’s management team and perform a detailed, preliminary review of the business. If the
parties move forward, the Advisers conduct due diligence, including financial and accounting,
legal, tax, industry, background, client, operations, technology, benefits and insurance due
diligence, typically in stages to reduce transaction costs should an irresolvable issue arise during
the process. The Advisers proceed to the closing of an investment only when satisfied with the
due diligence review and evaluation.

        In executing transactions, the Advisers work diligently to structure and finance a
transaction to enhance value at realization. The Advisers refine customized transaction and
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