Palm Peak Capital LLC

Fees and Compensation
Except as otherwise specified in the Governing Documents, Palm Peak charges management fees
to the Funds which is passed on to the Funds’ limited partners and also receives performance-based
compensation in the form of carried interest.

The fees that Palm Peak charges for Fund investments are described below:

The Funds will pay Palm Peak a management fee (the “Management Fee”) during the investment
period is paid quarterly in advance, equal to 2% of aggregate investor capital commitments
(“Commitments”). Investors participating in a closing after a Fund’s initial closing date bear the
Management Fee from the initial closing date, generally in addition to an interest component
payable to Palm Peak or an affiliate. Upon a date specified in the Governing Documents (the
“Stepdown Date”), the Management Fee will be reduced and will equal 2.0% of (a) the aggregate
unrecouped bridge financings and investment contributions made (or, in each case, payable to the
Funds pursuant to any outstanding capital call notice or capital call notice that the relevant General
Partner intends to issue to repay indebtedness incurred to fund investments and bridge financings
pursuant to the Partnership Agreement), as reduced by (b) permanent write downs and distributions
constituting returns of capital. The Management Fee will be payable until proceeds from all
portfolio investments are distributed or until Palm Peak’s relationship with the relevant Fund is
terminated for other reasons (as described in the Governing Documents). Installments of the
Management Fee payable for any period other than a full quarterly period are adjusted on a pro rata
basis according to the actual number of days in such period. As a general matter, Management Fees
will be payable during term extensions unless otherwise agreed with investors.

As is generally the case in private equity funds, the Governing Documents provide that a Fund’s
Management Fees will be calculated and charged on a basis that generally is not tied to the Fund’s
then-current net asset value. As further specified in the Governing Documents, from the effective
date of the relevant Fund until the Stepdown Date, Management Fees generally will be charged
based on a formula tied to the amount of the relevant Fund’s aggregate Commitments. Further, after
the Stepdown Date, Management Fees generally will be charged and calculated based on a formula
tied to the amount of investment contributions (including, where applicable, a Fund borrowing
component (including interest expenses) and the amount of any capitalized Supplemental Fees (as
defined below) or expenses, including costs of Operating Partners (as defined herein)) made by the
relevant Fund relating to the Fund’s aggregate investment(s) in its portfolio companies 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
Governing 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 Governing Documents but not those of one or more other Funds.

Under the Governing Documents, where the fair market value of an investment exceeds the total
amount of investment contributions relating to such investment, post-Stepdown Date Management
Fees will not be calculated based upon such appreciated value, and will instead continue to be
calculated based on the amount of applicable investment contributions. Conversely, the Governing
Documents do not require Management Fees to be reduced or refunded following the occurrence of

a writedown, decrease (including a significant decrease) in fair value or other event not constituting
a complete realization, such as a partial sale or disposition, reorganization, recapitalization
(including recapitalizations involving dividends), roll-over investment in connection with a sale or
dividend distribution, except in the case of investments meeting the relevant Impaired Value
Investment standard under the Governing Documents. For the avoidance of doubt, following the
Stepdown Date, if the fair market value of an Impaired Value Investment is less than the total
amount of investment contributions relating to such Impaired Value Investment, then the amount
of Management Fees otherwise payable relating to such investment will be reduced solely based on
the ratio of the fair market value of each relevant remaining investment(s) as compared against the
amount of total investment contributions relating to such investment(s) as of the date of the relevant
event.

As a result, and as is generally the case for private equity funds, the amount of Management Fees
generally will not correspond with fluctuations in the net asset value of individual investments or
of a Fund, including following the relevant investment period, and will not be reduced in connection
with any write downs (whether temporary or permanent), except in the case of Impaired Value
Investments. Except where the Governing Documents expressly provide to the contrary,
Management Fees will not be reduced (in whole or in part) in the case of partial sales or dispositions,
distributions (e.g., those resulting from a dividend recapitalization) or reorganizations,
restructurings, roll-over investments, extraordinary dividends or similar transactions, in each case
in circumstances that do not result in the complete disposition of the relevant Fund’s interest therein,
and even in cases where the value of the Fund’s investment or the Fund’s ownership percentage in
such investment has been reduced (including substantially reduced) as a result of such transaction.

In many circumstances, the post-Stepdown Date Management Fee base will include capitalized
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Types of Clients
Palm Peak provides investment advisory services solely to its Funds on a discretionary basis. The
Funds generally include investment partnerships or other investment entities formed under U.S. 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 and often include, directly or indirectly, principals or other
personnel of Palm Peak and its affiliates and members of their families, Operating Partners or other
Service Providers retained by Palm Peak or a Fund, as well as executives of portfolio companies.
Each limited partner in each Fund must be an “accredited investor,” as defined under the Securities
Act of 1933, as amended.

The Funds generally have no minimum capital commitments for its respective limited partners.

Methods of Analysis, Investment Strategies and Risk of Loss
Palm Peak seeks to acquire control investments in what Palm Peak considers to be under-optimized
industrial and services companies in the lower-middle market that are fundamentally sound, yet
undervalued with tangible opportunities for operational improvement. Through a systematic
approach to sourcing and underwriting opportunities with high-probability projects independent of
macro dynamics, Palm Peak seeks to correlate investment performance with successful execution
of internally controlled value projects. Palm Peak is focused on the following sub-sectors:
Industrial:
    •   Industrial Technologies
    •   Building Products
    •   Food & Beverage
    •   Packaging
    •   Specialty Distribution
    •   Chemicals & Other Niche Manufacturing
Services:
    •   Environmental
    •   Industrial Maintenance & Related
    •   Residential & Commercial
    •   Staffing & Related
    •   Utility Maintenance & Construction
    •   Other Niche Services
A holistic, end-to-end, approach beginning with sourcing filters, continuing through underwriting,
and finally executing value creation anchored by a (i) shared vision process and (ii) active portfolio
engagement. Palm Peak seeks to identify value gaps for each investment beginning at the sourcing
stage, then confirm two to five actionable projects to address each one at the underwriting stage,
followed by execution of a plan with company management to deliver on each project over the
investment period.

Risks of Investment and Conflicts of Interest
Investment in Private Companies. A Fund’s investment portfolio is expected to consist primarily
of securities and/or interests issued by privately held companies, and operating results in a specified
period will be difficult to predict. Such investments are illiquid and involve a high degree of
business and financial risk that can result in substantial losses. In particular, these risks could arise

from changes in the financial condition or prospects of the companies in which the investment is
made, changes in national or international economic and market conditions and changes in laws,
regulations, fiscal policies or political conditions of countries in which investments are made,
including the risks of war, revolutions and the effects of terrorist attacks. The possibility of partial
or total loss of capital will exist and investors should not invest unless they can readily bear the
consequences of such loss.

Investment in Junior Securities. The Funds are permitted to invest in securities which are among
the most junior in a portfolio company’s capital structure and, thus, subject to the greatest risk of
loss. Generally, there will be no collateral to protect the Funds’ investment once made.

Concentration of Investments; Lack of Diversification. The Funds will participate in a limited
number of overall investments. The Funds reserve the right to make several investments in one
industry or one industry segment or within a short period of time. As a result, the Funds’ investment
portfolio could become highly concentrated, and the performance of a few holdings or of a particular
industry may substantially affect its aggregate return. To the extent that the capital raised is less
than the targeted amount, the Funds likely will invest in fewer portfolio companies and thus will be
less diversified. If a Fund co-invests with another private equity fund, a limited partner invested in
such other fund has the potential to have exposure to a single portfolio company through more than
one fund, potentially multiplying such limited partner’s losses.

Lack of Sufficient Investment Opportunities. The business of identifying, structuring and
completing private equity investments is highly competitive and involves a high degree of
uncertainty. It is possible that the Funds will never be fully invested if enough sufficiently attractive
investments are not identified and consummated. However, regardless of the extent to which the
Commitments of the limited partners are invested (or drawn down to be invested), the limited
partners will be required to bear Management Fees through the Funds during the Investment Period
based on the entire amount of the limited partners’ Commitments as well as other expenses as set
forth in the Governing Documents.

Dynamic Investment Strategy. The Funds are not restricted in terms of the percentage of their capital
that can be invested in a particular industry. Many factors have the potential to contribute to changes
in emphasis in the construction of the portfolio, including changes in market or economic conditions
or regulation applicable to particular industries and changes in the political or social situations in
particular countries. As a result, the relevant General Partner reserves the right to pursue additional
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