New Mountain Vantage Advisers LLC

5. Fees and Compensation

A. Advisory Fees and Compensation
Compensation received by NMVA and NMV GP from the Private Funds is comprised of fees based
on a percentage of assets under management and performance-based allocations, as applicable.

Management Fees
The Private Funds’ asset-based management fees range up to a maximum of 1.5% (per annum) of each
investor’s capital account. The asset-based management fee charged to a particular investor is
generally tied to the liquidity option selected by such investor and may be tied to investor size or
timing of investment into the Fund. Asset-based fees are generally charged quarterly at the
commencement of the calendar quarter during which NMVA will perform the services to which the
fees relate and are generally debited from limited partners’ capital accounts. Capital contributions
made on a date other than the first day of a calendar quarter will be subject to a prorated portion of the
asset-based fee for that calendar quarter with respect to such contribution based on the number of days
remaining in that calendar quarter. NMVA, at its discretion, may waive all or a portion of the asset-
based fee.

Performance Allocations or Fees
As general partner of a Private Fund, NMV GP is entitled to performance-based allocations, which
generally range up to 20% of the annual net gain of the Private Fund’s investment portfolio during
each year subject to a high-water mark a n d may be subject to a hurdle. Performance-based
allocations are generally calculated on a monthly basis and crystallized as of the end of each fiscal
year (December). NMVA, NMV GP or an affiliate may, at its discretion on an investor-by-
investor basis, with certain limitations, waive all or a portion of the performance-based allocation.

NMVA may enter into side letters or similar written agreements with investors which have the
effect of establishing rights under, or altering or supplementing the terms of, the relevant governing
documents.

The Private Funds can terminate their investment management agreements with NMVA under the
provisions of their respective governing documents. Upon the occurrence of such an event, or if the
date on which a Private Fund liquidates is a date other than the last day of a calendar quarter, NMVA
will refund to the applicable Private Fund the amount of the most recent installment of the asset-
based management fee allocable to the portion of the calendar quarter for which that installment was
paid which is subsequent to the liquidation date.

Fees and Compensation paid to the Investment Adviser or its affiliates by the Private Funds are
generally deducted directly from the Private Funds. As discussed above, Management Fees are
generally deducted in advance on a quarterly basis and Performance Allocation is generally deducted
on an annual basis where applicable.

B. Expenses

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In addition to the foregoing, investors in the Private Funds generally bear expenses relating to the
Funds’ operations. These vary by Private Fund, but typically include the fees and expenses of
custodians, depositaries, counsel, independent accountants, administrators, and other professionals
and consultants (including unaffiliated third party individuals or firms that introduce investment
opportunities to NMVA in connection with NMVA’s activism initiatives (who may receive flat
commissions, profit sharing or others types of fees), and any taxes, fees or other governmental charges
levied against the Private Fund, interest on indebtedness, bank service fees, insurance premiums and
any extraordinary expenses of the Private Fund, such as litigation and indemnification expenses. A
Private Fund generally will also pay the out-of-pocket costs associated with making and realizing
investments, such as brokerage commissions, certain regulatory filing and registration fees (including
those related to the SEC and the Hart-Scott-Rodino Act) and other reporting and filing expenses and
the costs incurred by the general partner in connection with specific shareholder initiatives (such as
the costs of calling shareholder meetings, proxy solicitation fees and costs, and professional consulting
fees). The Private Funds’ offering documents further clarify such expenses to include other investment
and trading-related expenses (including ticket charges, expenses related to short sales, clearing, and
settlement charges, custodial fees, financing charges, including interest on margin accounts and other
indebtedness, appraisal fees and expenses and prime brokerage and commission charges); risk,
research and market data-related expenses (including software and hardware); expenses relating to
sale and offering of interests in the partnership and/or interests in the Private Fund; partnership
licensing expenses; expenses relating to investor communications; bookkeeping, audit and accounting
expenses; expenses incurred by the Adviser for investment research and due diligence; third party
administrator fees; marketing costs and expenses (including printing); expenses associated with
Private Fund transactions; expenses associated with amending the governing documents of a Private
Fund (including the solicitation of consent to such amendments); withholding and transfer fees; blue
sky fees; fees, costs and expenses (including legal fees and expenses) incurred to comply with any
applicable law, rule or regulation (including expenses relating to AIFMD compliance, preparation and
filing of Form PF and/or other regulatory filings of NMVA and its affiliates relating to the activities
of the Private Funds) or incurred in connection with any governmental inquiry, investigation or
proceeding involving the partnership; FATCA related expenses; and costs associated with windup,
liquidation, dissolution and termination of the Private Fund. In the event that a Private Fund invests
in a master fund, the Private Fund will bear a pro rata share of such expenses of such master fund.
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7. Types of Clients
As described in Item 4 above, NMVA provides investment advisory services to Private Funds.
Investment advice is provided directly to those Clients and not individually to any single investor.

The interests in the domestic Private Fund are offered on a private placement basis to persons who
are "accredited investors" as defined in Regulation D of the Securities Act of 1933, as amended (the
"Securities Act") and "qualified purchasers" as defined under the Investment Company Act of 1940,
and subject to certain other conditions as set forth in the respective offering documents.
The interests in the foreign Private Funds are offered on a private placement basis to persons who are
not “U.S. Persons” as defined under Regulation S of the Securities Act, and U.S. tax-exempt persons
who are both (i) “accredited investors” as defined in Regulation D of the Securities Act, and (ii)
“qualified purchasers as defined under the Investment Company Act of 1940, as amended (“40 Act”),
and subject to certain other conditions as set forth in the respective offering documents.
The offering documents of each Private Fund generally provide for a minimum investment amount
(typically $1 million, if any), although such minimums may be waived at the discretion of the
Investment Adviser.

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8. Methods, Analysis, Investment Strategies, and Risk of Loss
A. Methods Analysis and Investment Strategies

The Private Funds have the objective of generating attractive absolute long-term returns in excess of
the broader U.S. equity markets (such as the S&P 500 TR Index), or other investor-selected indices,
while attempting to do so with lower risk than that associated with such markets.

NMVA seeks to apply the skills and knowledge learned from New Mountain’s private equity
experience to meet its objectives in the public markets. The Private Funds have historically employed
minimal direct portfolio leverage to enhance their investment capacity. Additionally, the Funds
generally employ portfolio, sector, and single name hedges as well as a shorting strategy, and employ
add, trim and exit price levels for their positions. For quality and risk control purposes, core positions
of the Funds (generally those over 3% of aggregate fund assets) are subject to the review of New
Mountain and approval by New Mountain’s CEO, Steven B. Klinsky. This risk management strategy
is a cornerstone of New Mountain’s investment approach.

In evaluating long equity opportunities, NMVA generally seeks one or more of the following
characteristics:

     (1) Strong business models in defensive growth industries that are temporarily out-of-favor or in
         transition, providing a compelling entry point.

     (2) Situations where NMVA believes it will be able to add value to a company through
         constructive activism and/or long-term business building. This can include operational
         improvements, capital allocation changes, mergers and acquisitions and other strategic or
         governance changes.

     (3) Securities in companies that NMVA believes are underfollowed or misunderstood by the
         investment community, often in cases where there may be forced or technical selling, a
         complicated story or an asset arbitrage opportunity.

In evaluating NMVA’s individual short opportunities, NMVA generally focuses on what it believes
to be weak business models or flawed industry structures, among other factors. NMVA has and will
also engage in pair trades to take advantage of relative value differences.

NMVA may employ macro, sector and single name hedges with the goals of protecting capital during
market corrections, reducing the volatility of the Client portfolios and managing exposures.

Notwithstanding the above, NMVA may pursue a wide variety of public equity investment strategies
and may modify or depart from the investment strategy and investment process described above if it
identifies public equity investment opportunities that it believes are sufficiently attractive for the
Funds on a risk/reward basis.

Investing in the Private Funds involves material risks, including the risk of loss that investors should
be prepared to bear. The following is a list of certain material risks that are generally applicable to
investments in the Funds. Investors should review the offering documents of the applicable Private
Fund to understand the risks and potential conflicts of interest associated with an investment in such

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Private Fund.

B. Risks of Loss

No Assurance of Investment Return
There can be no assurance that any Fund will be able to generate returns for its investors or that the
returns will be commensurate with the risks of investing in the type of investments in which such Fund
participates. An investment in the Funds should only be considered by persons who can afford a loss
of their entire investment. There may be little or no near-term cash flow available to the investors in
any Fund and there can be no assurance that such Fund will make any distribution to the investors.
There can be no assurance that projected or targeted returns for any Fund will be achieved.
Suitability of Investments

An investment in the Funds is not suitable for all investors. An investment is suitable only for
sophisticated investors and an investor must have the financial ability to understand and willingness
to accept the extent of its exposure to the risks and lack of liquidity inherent in an investment in the
Funds. Investors with any doubts as to the suitability of an investment in a Fund are urged to consult
their professional advisors to assist them in making their own legal, tax, accounting and financial
evaluation of the merits and risks of an investment in the Funds in light of their own circumstances
and financial condition.

Availability of Suitable Investments; Highly Competitive Market for Investment Opportunities
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