McNally Advisors LLC

Fees and Compensation

The Adviser or its affiliates generally receive Advisory Fees and Carried Interest (each as defined
below) or similar performance-based remuneration from a Fund. A Fund, and/or its portfolio
companies also typically reimburse the Adviser and its affiliates for certain expenses and/or make
other payments to the Adviser or its affiliates for services provided to the Fund and/or its portfolio
companies, which, in certain circumstances, reduce the Advisory Fees payable to the Adviser.
Additionally, consistent with the Organizational Documents of a Fund, the Fund typically bears
certain out-of-pocket expenses incurred by the Adviser in connection with the services provided
to the Fund and/or the portfolio companies. Details about such fees and expenses are contained in
the Organizational Documents of a Fund. Further details about certain common fees and expenses
are set forth below.

                                           Advisory Fees

As compensation for investment supervisory services rendered to the Funds, the Adviser receives
from each such Fund an advisory fee (each, an “Advisory Fee”) typically calculated based on
committed capital or remaining invested capital, with respect to such Fund. Advisory Fees may
be reduced during the life of a Fund. The precise amount of, and the manner and calculation of,
the Advisory Fees for each Fund are established by the Adviser and are set forth in such Fund’s
Organizational Documents.

The Organizational Documents for each Fund provide that Fund’s Management Fees will be
calculated and charged on a basis that is generally not tied to the Fund’s then-current net asset
value. As further specified in each Fund’s Organizational Documents, from the effective date of
the relevant Fund until a date specified in the Organizational Documents (the “Stepdown Date”),
Management Fees generally will be charged based on a formula tied to the amount of the relevant
Fund’s aggregate capital commitments. Further, after the Stepdown Date, Management Fees
generally will be calculated and charged on a formula tied to the amount of investment
contributions (including, where applicable, a Fund borrowing component (including interest
expense) and the amount of any capitalized Transaction Fees (as defined below) or expenses) made
by the relevant Fund relating to investments that have not been realized or completely written off
for U.S. federal income tax purposes (such investments, “Impaired Value Investments”). Due to
differences in the criteria set forth in their respective Organizational Documents, in the event where
more than one Fund participates in an investment, there is the possibility that an investment will
become an Impaired Value Investment for purposes of one Fund’s Organizational Documents but
not those of one or more other Funds.

The Advisory Fees and other fees and distributions described herein are generally subject to
modification, waiver or reduction by the Adviser in its sole discretion, both voluntarily and on a
negotiated basis with selected investors via side letter and other arrangements, which may not be
disclosed to other investors in the same Fund. The fee structures described herein may be modified
from time to time. Fees may differ from one Fund to another, as well as among investors in the
same Fund.

The Advisory Fees paid by a Fund will generally be reduced by a percentage of (1) 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, (2) the fees incurred by the Adviser in
connection with the organization of such Fund that exceed a limit specified in such Fund’s
Organizational Documents and/or (3) certain Other Fees (as defined and described in more detail
below under “Other Fees”) received by the Adviser or its affiliates. Funds will have different fee
offset terms. The amount and manner of such reduction, if any, is set forth in the Organizational
Documents of the applicable Fund. Certain investors in the Funds that are employees, former
employees, Special Consultants (as defined below), 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.
Furthermore, the Adviser has in the past and may, from time to time in the future establish certain
investment vehicles through which Adviser Investors or other third parties may invest alongside
one or more Funds in one or more investment opportunities, which generally do not pay Advisory
Fees or Carried Interest. Notwithstanding that Adviser Investors will generally not pay Advisory
Fees, Adviser Investors will generally pay for their pro rata share of certain Fund expenses, or the
pro rata portion of such Adviser Investors’ expenses will be allocated to the Adviser or the General
Partner of the applicable Fund.

The Adviser from time to time enters into economic and/or other fee-sharing arrangements with
respect to one or more Funds and/or certain limited partners thereof, the rights of which will not
generally be offered to other limited partners.

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 of any obligation of the Adviser and certain employees and affiliates
of the Adviser to invest in and alongside such Fund, which could result in acceleration of investor
capital contributions. Waived or reduced Advisory Fees are not generally subject to various offsets
or the reductions described above. Due to waived or reduced Advisory Fees and/or the timing of
...

Types of Clients

The Adviser provides investment management 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.

Private investment funds are investment partnerships or other investment entities operated as
investment pools exempt from registration under the Investment Company Act. The investors
participating in the private investment funds will be family offices and their related ultra high net
worth individuals, pension and profit-sharing plans, governmental entities, charitable organization
and other corporations or business entities and may include, directly or indirectly, principals or
other employees of the Adviser and its affiliates such as McNally Capital. Investors must be
“accredited investors” as defined in Regulation D of the Securities Act and may also meet the
“qualified purchasers” definition under Section 3(c)(7) of the Investment Company Act.

The Adviser does not have a minimum size for a Fund, but minimum investment commitments
may be established for investors in the Funds. The General Partner of each Fund may in its sole
discretion permit investments below the minimum amounts set forth in the Organizational
Documents of such Fund.