PennantPark Investment Advisers LLC

Item 5: Fees and Compensation

As compensation for the services received, Clients (i) typically pay a management fee or investment
advisory fee based on the assets held by such Client (“Management Fees”) and (ii) may pay incentive or
performance-based fees (“Incentive Fees”). See Item 6 for more information about Incentive Fees. All
Management Fees and Incentive Fees are negotiated with each Client or established in connection with
the formation of the Client. We have no set fee schedules. We may waive Management Fees and/or
Incentive Fees at our discretion. The exact nature, timing, and calculation of Management Fees and
Incentive Fees is set-forth in applicable Governing Documents.

Management Fees

The scope and level of Management Fees will vary across each Client and is specifically set-forth in
applicable Governing Documents.

Asset-based management fees may be calculated on a gross basis, which can create conflicts of interests
when we control the timing and amount of leverage, if any, used by a Client, since the use of leverage
would provide additional capital to such Client enabling such Client to make additional investments and
thus increase the base against which management fees are calculated. This opportunity to earn higher
fees could give us an incentive to allocate investment opportunities based on a Client’s use of leverage.
We seek to mitigate this conflict through our allocation policy.

Incentive Fees

Funds

PennantPark and its affiliates, in their role as General Partners or Managing Members of Funds, are
generally eligible to receive performance-based compensation, which may be in the form of an incentive
allocation or carried interest (collectively, “Carried Interest”), with respect to the Fund’s Investment
Proceeds, or such similar metric as set forth in applicable Governing Documents, which is generally
determined as a percentage of profits derived from interest, principal repayment, dividends, sale, or
distribution proceeds of all investments (after taking into account expenses of the Fund, including
management fees, following a preferred return to investors). If the payment of Carried Interest results in
a distribution in excess of the amount of Carried Interest contemplated in the Governing Documents to
the applicable Fund’s General Partner or Managing Member, such General Partner or Managing Member
is generally subject to a “claw back” arrangement in which instance the excess amounts are returned to
the Fund.

BDCs and PEIF

The Incentive Fees with respect to the BDCs have two parts: the first part is based on the BDC’s net
investment income and the second part is based on a share of realized capital gains. The Incentive Fees
with respect to PEIF is based on net investment income. More information on the Incentive Fees payable

be the BDCs and PEIF is available in the Governing Documents for the BDCs and PEIF, including their
publicly-available registration statements.

Transaction Fees and Other Obligor Related Expenses

We may receive and retain compensation from related loan obligors (i.e., each borrower or guarantor of
a loan) or otherwise receives fees or compensation in connection with such loans. Such fees and
compensation that may be retained by us are set-forth in Client Governing Documents but generally could
include, but is not limited to, commitment, origination, prepayment penalties, structuring, diligence and
consulting fees or other fees received from portfolio companies in connection with such loans
(“Transaction Fees”). We may also receive and retain fees for providing administrative agent services with
respect to loan obligors; third party loan agent expenses may be reimbursed by Clients under or netted
against fees earned by us as loan agent and forwarded to clients as set forth in the Governing Documents.
In addition, loan obligors may be obligated to reimburse us and/or Clients for current expenses that are
reimbursable pursuant to loan agreements with such obligors and consistent with administration
agreements with applicable Clients.

Our receipt of fees for services and reimbursement of expenses with respect to loans that could be offered
to or acquired by Clients represents a conflict of interest to the extent that we have an economic incentive
to underwrite and originate, and recommend or cause Clients to invest in, such loans. However, Client
Governing Documents may provide that our receipt of Transaction Fees will offset the Management Fees
payable by such Client. We mitigate conflicts that may arise as a result of Transaction Fees through our
allocation policy (as described in Item 11).

Client Expenses

In addition to Management Fees, Incentive Fees, and other fees described above, Clients pay or reimburse
us for certain fees and expenses. These fees and expenses vary from Client to Client and are specifically
set-out in each Client’s Governing Documents. Funds may be established with or without expense caps or
other limitations on the bearing of expenses. Expense caps or other limitations vary from Client to Client
and are specifically set-out in each Client’s Governing Documents.

BDCs, the RIC and Funds will typically bear organizational and offering expenses and operating expenses,
which may include but are not limited to investment related expenses, travel and entertainment expenses
incurred in sourcing loans from fund sponsors, transaction related expenses, professional fees, valuation
fees, audit and tax preparation fees, insurance, and other similar costs and expenses.

Administration Fees

Clients may enter into administration agreements with us or an affiliate for the provision of administrative
services on behalf of such Clients. As compensation for administrative services, Clients may be obligated
to pay their allocable portion of overhead and other expenses incurred by the administrator in performing
its obligations under such administration agreement, including rent and an allocable portion of the costs
...

Item 7: Types of Clients

We currently provide investment advice to BDCs, Funds, and the RIC. The minimum investment amount,
if any and as applicable, and other criteria for investments in Clients are set forth in the relevant Client
Governing Documents.

The Funds are excepted from the definition of an “investment company” and are exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”).

We and/or the relevant General Partner or Managing Member have entered into and in the future may
enter into additional separate agreements, commonly referred to as “side letters”, with certain investors
in the Funds, which may have the effect of establishing preferential rights under, altering, or
supplementing the terms of, the Governing Documents of the applicable Fund with respect to such
investor, in a manner more favorable to such investor than those applicable to other investors in such
Fund. Such rights or terms pursuant to such side letters may include, for example (and without limitation),
fee arrangements or hurdle rates with respect to an investor, reporting obligations, waiver of certain
confidentiality obligations, consent to certain transfers or withdrawals by an investor, or rights or terms
necessary in light of particular legal, regulatory, or tax requirements or concerns of an investor. The
provisions set forth in any such side letter may be available for review (but not necessarily adoption) by
all of the investors in the relevant Fund that have entered into side letters.