McKinney Capital LLC

Item 5.               Fees and Compensation
For our services to the Funds, the Funds’ General Partners/Managing Members, affiliates
of MC through common ownership and control, will receive Carried Interest, a form of
performance-based compensation described below and/or a fixed fee, as specified in the
Fund offering documents. Relevant management or monitoring fees are charged directly
to the portfolio company(ies).

Management Fees and Carried Interest:

Carried Interest, typically 20%, is allocated upon the sale of any portfolio company or
realization of an investment or dividend. Limited Partners/Members should refer to the
appropriate Fund offering documents for detailed information regarding fees and fee
offsets. It is also important to note that any new Fund launched by MC may have similar
or materially different terms than those summarized above.

Other Fees and Expenses

MC investment professionals have been appointed and are expected to be appointed in
the future as directors to portfolio companies in which MC has made an investment. MC
investment professionals closely monitor the business activities of the portfolio
companies and may provide strategic advice and access to industry resources. As
compensation for this service MC may charge annual monitoring fees to portfolio
companies that are separate and apart from the management monitoring type fee. Annual
monitoring fees are negotiated and agreed upon with the portfolio company. Other
transaction fees may be charged by MC or our affiliates to compensate us or our affiliates
for facilitating successful transactions involving acquisitions, add-ons, or other
financings, purchases or sales of portfolio companies and securities. Please see Item 12
of this Brochure for additional information. Some compensation arrangements may
contain acceleration payment clauses the result of which is full payment for services prior
to the completion of such services. These acceleration payments may be triggered by
realization events or other agreed-upon contractual provisions.

GENERAL INFORMATION:

Investments in Funds: MC may itself serve as the General Partner/Managing Member
for a Fund. Alternatively, the General Partner/Managing Member for a Fund may be
affiliated with MC through common ownership and control as well as shared executive
officers. The General Partner/Managing Member of each Fund, principals and/or other
related persons of MC will generally participate in the Fund’s investments by investing
assets directly in the Fund.

Co-Investments: MC or a Fund’s General Partner/Managing Member may make co-
investment opportunities available to Limited Partners/Members, their affiliates, MC
employees, MC’s related persons, and certain third-parties, as determined by MC. If a
co-investment opportunity is presented to an outside investor or third-party, MC will
follow co-investment opportunity allocation procedures set forth below. Allocation of
such opportunities may create a conflict of interest as they are, by nature, limited and
participation is not possible for all or even most investors in the Funds. As such, MC
must determine which investors will be given the opportunity to co-invest and which will
not. Moreover, MC has not in the past and may not in the future allocate certain deal
expenses to participating co-investors.

To address these potential conflicts, we have adopted written policies and procedures that
provide investors with appropriate disclosures regarding the conflicts of interest inherent
in co-investing. Investors should note, however, that MC’s allocation of co-investment
opportunities and deal expenses is at the sole discretion of MC and may be driven by
prior arrangements and other factors. For example, MC may give priority to Limited
Partners/Members that had negotiated side letters requiring that MC provide co-
investment opportunities at the time of their original capital commitment to the applicable
Fund. In addition, co-investment opportunities may be allocated to and deal fees waived
or reduced for third party investors that are necessary to help MC complete a transaction
or investors that will be involved with the particular company post-closing. Finally,
although investors are not typically a source of investment opportunities, when
applicable, MC may generally give priority with respect to co-investment opportunities
and deal fee and expense allocations or reductions to any investor that brought an
opportunity to MC’s attention. Deal fees and expenses may also be reduced or waived
for a co-investment party that may have an impact on the viability or terms of the
proposed investment opportunity and the ability of the Funds to take advantage of such
opportunity

Pursuant to the respective Limited Partnership/Membership Agreements, certain
executive officers and/or employees of MC have, and may acquire in the future, direct
investments in one or more of the underlying portfolio companies through separate,
affiliated entities formed for co-investment purposes. Employees and related persons of
MC may also be offered additional opportunities, on a case-by-case basis, to co-invest in
portfolio companies with the Funds. These co-investments will either be made pursuant
to certain limitations outlined in each Fund’s legal documents or will be disclosed in
advance to Limited Partners/Members in Funds that do not contain such limitations.

If a proposed transaction is not consummated, no such co-investment vehicle will have
been formed, and the full amount of any expenses relating to such proposed but not
consummated transaction (“Dead Deal Costs”) would therefore be borne by either MC or
the Funds or Funds selected by MC as proposed investors for such proposed transaction
(depending on the structure of each particular fund). Similarly, co-investment vehicles
are not typically allocated any share of fees paid or received in connection with such an
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Item 7.                Types of Clients
We anticipate providing investment management services to several private equity funds
and associated co-investors as disclosed at Item 4 of this Brochure.

Prospective investors in any new Fund launched by MC should refer to the appropriate
Fund offering documents for information regarding that Fund’s minimum required capital
commitment and any additional qualifications required for investment.