PeakEquity Partners Management Co LLC

Item 5        Fees and Compensation
Management Fee

PeakEquity Partners receives an annual management fee from its funds (the “Management Fee”)
that varies from fund to fund but is generally 1.75-2.25% of an investor’s commitment during the
fund’s investment period or for a specific period of years. After the investment period or a specific
period of years, the fund pays a Management Fee based on each investor’s pro rata share of the
Fund’s invested capital, which generally equals the declining balance of the portfolio’s acquisition
cost of the portfolio investments held by the Fund, taking into account any realizations or
permanent write offs of portfolio investments. PeakEquity Partners can and has waived all or a
portion of its Management Fee for investors through side letters, and/or for the Fund at the

discretion of PeakEquity Partners. Management Fees are payable quarterly in advance and are
deducted from the fund’s account.

 Other Fees /Portfolio Based Compensation

 We can also receive (and have in the past) monitoring, transaction, advisory, consulting, directors
 and other fees in connection with the activities of the Fund (“Other Fees”). In addition, we are
 reimbursed by the Fund’s portfolio companies for expenses we incur in connection with our
 performance of the services that give rise to Other Fees. The Other Fees received from portfolio
 companies allocable to other co-investors, determined by co-investor percentage of capital
 contributed relative to total capital contributed by co-investors and fund clients at closing, are
 typically retained by the management company. The limited partnership agreements of the funds
 set forth the applicable fee calculations and any offsets. The monitoring fees that we receive with
 respect to a portfolio investment are sometimes determined with reference to the adjusted EBITDA
 and/or revenues upon which the purchase price for such portfolio investment is based. Other fees
 that we receive with respect to a portfolio investment may be determined at the time of acquisition
 or disposition. Both monitoring fees, advisory and transaction fees are agreed to with the
 applicable portfolio companies at the closing of the Fund’s investment in such portfolio
 companies. PeakEquity Partners does not accelerate the monitoring fees upon exiting a position.

 PeakEquity Partners does employ and has employed operating partners. These operating partners
 are compensated directly either from the management company or the portfolio company but not
 directly from the funds. When compensated directly from the portfolio company, the cost is
 ultimately borne by the funds.

 In general, the net Management Fee that a fund pays us is reduced by a portion of any Other Fees
 received by us in connection with the activities of the fund.

 If we cease to serve as the investment manager to a fund, the Management Fee payable by the fund
 for such period will be pro-rated based on the number of days during such period that we served
 as investment manager, and we will refund any excess.

 Expenses

 Additional fees and expenses for which our funds are responsible are described in the limited
 partnership agreements of each fund. Generally, the fund pays all costs and expenses relating to
 its operations, including but not limited to: legal, auditing, consulting and accounting fees and
 expenses; expenses of meetings of its limited partner advisory committee and of limited partners;
 indemnification and insurance expenses; expenses associated with the acquisition, holding and
 disposition of its proposed or actual investments (including related due diligence other than travel-
 related due diligence expenses of our personnel); extraordinary expenses such as litigation; interest
 on and fees and expenses arising out of any permitted borrowing; expenses relating to
 unconsummated transactions; expenses of liquidating the fund; and any taxes, fees or other
 governmental charges levied against the fund and any expenses incurred in connection with any
 tax, audit, investigation, settlement or review of the fund. Expenses associated with the
 acquisition, holding and disposition of an investment include the expenses of brokers or dealers to

the extent that any such person is engaged in connection with a transaction. See Item 12 -
Brokerage Practices. Such expenses include commissions, custodian fees, rating agency fees and
other transaction expenses.

Neither we nor any of our “supervised persons” accepts compensation for the sale of securities.

Please see Item 11 for discussion on conflicts of interests associated with fees.

Item 7        Types of Clients
We provide discretionary investment advice solely to private investment funds, which are
considered our “clients,” and not to the investors in the fund. Investors in the funds typically
include retirement plans, foundations, endowments, funds of funds, family offices, and high-net-
worth individuals.

PeakEquity Partners generally requires a minimum account of $1,000,000 or more to invest in its
funds. Each general partner of the funds, in its sole discretion, can make and has made exceptions
to the required minimum. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss

Investment Strategies and Methods of Analysis

We generally seek investment opportunities for the funds where we can play a role in enhancing
the target company’s value through two complementary strategies. First, we seek to identify a
compelling value proposition within an established industry and then assemble a knowledgeable
management team led by a CEO to build the business around that value proposition and team.
Second, we seek growth for portfolio companies through evaluating and executing strategic
acquisitions, as well as supporting the implementation of value-added strategies, such as internal
capital investment, geographic expansion, product line extension and management team
enhancement.

We generally source investment opportunities consistent with these strategies through our
differentiated origination networks, including the relationships of our investment professionals and
our strategic alliances with third parties who assist us in sourcing portfolio investments. We
believe that such networks allow us often to source investments on a proprietary basis.

We generally seek to identify investments that we believe are at appropriate valuations, are in
quality established businesses, have a knowable and sustainable value proposition, are leaders in
their markets and for which there exists a vision for achieving growth and value accretion.
Furthermore, we seek investment opportunities for which exit alternatives are expected to exist for
the realization of value created. We primarily focus on investments in North America.

In screening potential investment opportunities, we seek to implement due diligence processes that
are aimed at assessing and quantifying the opportunities for, and challenges to, value creation by
such potential portfolio companies. Such processes typically involve research of a prospective
portfolio company’s markets served, competitive position, capabilities, customer relationships,
environment, potential for future growth and ultimate realization of value, but vary depending on
the facts and circumstances relating to the particular investment opportunity, including the type of
information available. Our efforts are typically augmented by outside industry advisors,
accountants, lawyers, and other relevant experts that we determine are necessary.

In executing investments, we seek to invest at attractive valuation levels, maintain price discipline,
and differentiate between market overreactions or cyclical valuation peaks and long-term
sustainable valuations. In particular, we seek to implement capital structures that support value-
creation strategies and future growth, with a preference for entirely private capital structures and
avoiding excessive leverage. We also work closely with management of our portfolio companies
to assess whether a strategic acquisition, internal capital investment, geographic expansion or
product line extension provide a clear strategy for creating long-term value.

Post-investment, we monitor portfolio companies closely, regularly speaking with management
and reviewing performance reports. Furthermore, our personnel often can and do serve on the
boards of directors of our funds’ portfolio companies. This regular contact is intended to permit
us to assess opportunities for portfolio company growth, identify the optimal realization point, and
find suitable exits.

Risk Factors

Investors in our funds should be prepared to bear the risk of loss inherent in our funds, including
to principal. The discussion below of risks associated with investment in the funds does not purport
to be an exhaustive list of all such risks. Please see the confidential offering memoranda of our
funds for a more detailed discussion of risks.

Risk of Loss of Capital. Investing in securities involves the risk of loss of capital. Investors that
cannot bear the loss of their entire investment in a fund should not make such an investment. While
we believe that our investment processes, strategy, and research techniques mitigate the investment
risk through a careful selection and monitoring of investments, no guarantee or representation is
made that we will achieve a fund’s investment objectives or that we will be successful.

Market Volatility. Volatile market conditions can occur and can have a dramatic effect on the value
of private investments. Terrorist attacks; other acts of violence or war; health-related outbreaks,
epidemics and/or pandemics; natural hazards; and/or force majeure, among other events and
conditions over which we have little to no control can affect the operations and profitability of a
fund’s portfolio companies and the fund’s ability to harvest its investments in those companies.
Such events also could cause consumer confidence and spending to decrease or result in increased
volatility in the U.S. and worldwide financial markets and economy(ies). Any of these occurrences,
and any combination, could have a significant impact on the operating results and revenues of a
fund’s portfolio companies and, in turn, on the return of a fund’s investments.

Leverage. While investments in leveraged companies offer the opportunity for capital
appreciation, such investments also involve a high degree of risk. Our funds’ investments can be
highly leveraged and therefore may be more sensitive to adverse business or financial
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