Merit Capital Partners Management LLC

Item 5        – Fees and Compensation

         A.      Describe how you are compensated for your advisory services. Provide your fee
                 schedule. Disclose whether the fees are negotiable.

The precise amount of, and the manner and calculation of, the management fees for each fund are
established at the time of the respective Fund’s formation, as modified by negotiations with investors
in the applicable fund, and are set forth in each Fund’s Governing Documents prior to investment in
a fund. Any commitment of a limited partner in excess of a specified threshold may be subject to a
reduced management fee schedule as described in the applicable Partnership Agreement.

As compensation for investment advisory services rendered to the funds, the Adviser receives both a
management fee and a carried interest allocation. In addition, the Adviser and its affiliates may perform
transaction-related, financial advisory and other services (“Related Services”) for, and receive fees
from, actual or prospective portfolio companies of the Funds, including fees in connection with
mergers, acquisitions, add-on acquisitions, refinancings, sales and similar transactions. Such additional
compensation reduces the management fees otherwise payable to the Adviser. Additionally, a portfolio
company may reimburse Merit Capital for expenses (including without limitation travel expenses)
incurred by the Adviser in connection with its performance of services for such portfolio company,
and such reimbursements are not subject to the sharing arrangements described below.

Fund VII pays its General Partner, Merit VII, quarterly in advance, an annual management fee equal
to 1.75% of aggregate Commitments. Beginning the earlier of (i) five years after the activation of Fund
VII, or (ii) the effective date of a mezzanine fund with substantially similar objectives to Fund VII,
the management fee will be reduced to 1.50% of invested capital which will further be reduced to
1.25% upon the activation of a mezzanine fund with at least $400 million of committed capital.

Fund VIII has closed on approximately $500 million of commitments as of the brochure date. Fund
VIII has not yet commenced operations.

The General Partner of each partnership is entitled to receive a carried interest allocation equal to 20%
of all profits if the partnership earns at least an 8% preferred return (compounded monthly), subject
to a General Partner catch-up provision, as more fully described in the Partnership Agreement of the
applicable partnership. The carried interest distributed to the General Partner is subject to a potential
giveback at the end of the life of the partnership if the General Partner has received excess cumulative
distributions.

         B.      Describe whether you deduct fees from clients’ assets or bill clients for fees
                 incurred. If clients may select either method, disclose this fact. Explain how
                 often you bill clients or deduct your fees.

Management fees are generally deducted from clients’ accounts on a quarterly basis based on its

respective Governing Documents. Current Merit Capital funds that pay fees do so in advance.

        C.      Describe any other types of fees or expenses clients may pay in connection with
                your advisory services, such as custodian fees or mutual fund expenses.
                Disclose that clients will incur brokerage and other transaction costs, and direct
                clients to the section(s) of your brochure that discuss brokerage.

Each fund is charged for all management fees payable to the respective General Partner, legal and
accounting services, investment related expenses (e.g., commissions; clearing fees; fees, interest and
other costs on margin accounts or other financings or re-financings), expenses incurred by Merit
Capital and its affiliates in connection with the initial and continuous offering of fund interests,
extraordinary expenses and other similar expenses.

Each partnership bears all partnership expenses to the extent not paid by portfolio companies,
including: (i) all costs and expenses attributable to acquiring, holding and disposing of the partnership's
investments (including, without limitation, interest on money borrowed by the partnership or the
General Partner on behalf of such partnership, registration expenses and brokerage, finders', custodial
and other fees); (ii) legal, accounting, auditing, insurance, consulting, financing, filing and other fees
and expenses (including, without limitation, expenses associated with the preparation of partnership
financial statements, tax returns and Schedules K-1); (iii) expenses of any advisory committee of
limited partners of the partnership; (iv) extraordinary expenses, costs, liabilities and obligations of the
partnership (including, without limitation, litigation and indemnification costs and expenses,
judgments and settlements); (v) all out-of-pocket fees and expenses incurred by the partnership, the
General Partner, Merit Capital or their affiliates relating to transactions consummated but not
reimbursed by the portfolio company, and (vi) all out-of-pocket fees and expenses incurred by the
partnership, the General Partner, Merit Capital or their affiliates relating to investment or disposition
opportunities for the partnership not consummated.

Each General Partner bears the normal expenses incurred by it or its affiliates in administering the
relevant partnership, including salaries, rent, and other administrative expenses. All funds are charged
brokerage commissions and other transaction costs and expenses in connection with trading and
investment activities and any custodian fees for assets held in cash or securities at banks, broker-
dealers, and other financial institutions. For a discussion of the brokerage arrangements that Merit
Capital enters into on behalf of the funds, see Item 12.
...

Item 7        – Types of Clients

         A.      Describe the types of clients to whom you generally provide investment advice,
                 such as individuals, trusts, investment companies, or pension plans. If you have

                 any requirements for opening or maintaining an account, such as a minimum
                 account size, disclose the requirements.

Merit Capital provides discretionary investment advice to the funds. Investment advice is provided
directly to the funds and not individually to limited partners in the funds. Identifying details about the
funds may be found in Item 4, above, as well as the portion of Merit Capital’s ADV Part 1 captioned
“Private Fund Reporting” at Section 7.B.(1). Merit does not manage or control any co-investment
vehicles.

Funds are investment partnerships or other investment entities formed under domestic or foreign
laws and operated as exempt investment pools under the Investment Company Act of 1940, as
amended. The investors participating in the funds may include banks or thrift institutions, other
investment entities, pension and profit-sharing plans, trusts, estates or charitable organizations or
other corporations, business entities or individuals, and may include, directly or indirectly, principals
or other employees of the Adviser and their affiliated entities.

Each partnership has a minimum investment of $5 million for third-party investors, which may be
waived by the applicable General Partner. Interests in Fund VII and Fund VIII are generally offered
and sold to investors that are (i) "accredited investors" as defined under Regulation D of the
Securities Act of 1933, as amended and (ii) either "qualified purchasers" or "knowledgeable
employees" as defined under the Investment Company Act.