Prelude Growth Partners Management Company LLC

Item 5 – Fees and Compensation

A.      Compensation for Advisory Services

Prelude Growth receives asset- and performance-based fees and allocations from the Funds (as well as other
compensation and reimbursements of expenses, as described further below). The specific payment terms
and other conditions of these fees and allocations are set forth below and in the relevant Fund
Documentation. (Capitalized terms used, but not defined, in this Item 5 have the respective meanings set
forth in the Fund Documentation.)

Management Fees

The following is a summary of the method used to calculate the management fees paid to Prelude Growth,
by the Funds:

Fund I, Fund II, and Fund III pay Prelude Growth an annual management fee (the “Management Fee”) in
respect of each Limited Partner, payable in advance on a semi-annual basis. During the Investment Period,
the Management Fee in respect of each Limited Partner equals 2.0% of such Limited Partner’s Commitment,
as further disclosed in each Funds’ Offering Documents.

After the end of the Investment Period, the Management Fee in respect of each Limited Partner will be
equal to 2.0% of such Limited Partner’s share of Net Invested Capital. No Management Fee will be payable
in respect of any extension to the term of the Fund, except with the approval of the Advisory Committee.
“Net Invested Capital” as of any date means an amount equal to the aggregate cost basis of all investments
(other than cash and cash equivalents) then held by the Fund, less the aggregate cost basis of all such
investments that have been written off as worthless for U.S. federal income tax purposes.

Highland Citrus Holdings, L.P. pays management fees that differ from those of Fund I, Fund II and Fund
III. With respect to co-investments made alongside Fund II, Highland Citrus pays a management fee of
1.0% per annum based on invested capital. Highland Citrus does not pay a management fee with respect to
co-investments made alongside Fund III. The applicable fee terms are described in the governing documents
of Highland Citrus and may vary depending on the structure of the underlying investment.
Prelude Growth may reduce the Management Fee in respect of any Limited Partner in its discretion provided
that any such reduction does not increase the Management Fee payable by any other Limited Partner.

Management Fees payable will be reduced by any transaction, closing, monitoring, consulting, directors or
similar fees paid by portfolio companies or the Fund to Prelude Growth or the Principals (collectively, “Fee
Credits”). Organizational expenses in excess of $250,000 are also be treated as a Fee Credit for Fund I and
Fund II. Organizational expenses in excess of $1,200,000 are to be treated as a Fee Credit for Fund III.
Organizational expenses in excess of $150,000 are to be treated as a Fee Credit for Highland Citrus
Holdings, L.P.. Fee Credits in excess of Management Fees in respect of a period will be carried forward to
offset Management Fees accruing in subsequent periods. If, immediately prior to termination of the Fund,
there remains any Fee Credit that has not been applied against Management Fees, then such unapplied Fee
Credit will be returned to the Fund and distributed to the Partners in the same manner as proceeds from the
disposition of a portfolio investment unless a Partner elects not to receive such amounts.

Because Management Fees are based on Commitments, Prelude Growth may be incentivized to oversize
the Funds to increase the amount of its management fees. Prelude Growth believes that, notwithstanding
this potential conflict, it has sought and continues to seek capital commitments in amounts that allow it to
effectively deploy capital towards attractive investment opportunities on behalf of the Funds.

Prelude Growth may also receive advisory fees, consulting fees, break-up fees, directors’ fees, monitoring
fees, and transaction fees at the time of investment from and with respect to the portfolio companies in
which the Funds invest. Any such fees paid to Prelude Growth are generally shared with the Funds and its
Limited Partners through reductions or off-sets against management fees that would otherwise be payable
to Prelude Growth, as further described in the relevant Fund Documentation.

The Management Fees described above (along with the carried interest distributions described below)
constitutes the compensation paid by the Funds. Prelude Growth does not otherwise maintain a fee schedule.

Carried Interest

The General Partner of each of the Funds are entitled to share in the profits (if any) generated on behalf of
the Funds. Such compensation is in the form of carried interest distributions made based on proceeds
generated and distributed from the sale or other capital event of portfolio investments made by such Funds.
The carried interest distributions are in an amount equal to 20% of all such distributions made to Limited
Partners of such Funds, after the return of invested capital, expenses, and a preferred return. For Fund I,
Fund II and Fund III, a preferred return of 8% per annum is calculated for the Limited Partners’ contributions
followed by a “catch-up” by the General Partner, then the General Partner is entitled to the 20% of
distributions discussed above.

For Highland Citrus Holdings, L.P., the General Partner is entitled to a carried interest of 10% on co-investments
made alongside Fund II, which is not subject to a preferred return. There is no carried interest on co-investments
made alongside Fund III.

The General Partner may receive carried interest distributions from the Co-Investment Vehicles as
negotiated with investors in the Co-Investment Vehicle.

All performance-based compensation payable to the General Partner will be effected consistent with the
requirements of Section 205 of the Advisers Act and Rule 205-3 thereunder.

B.      Valuation
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Item 7 – Types of Clients

As noted in Item 4 above, Prelude Growth provides discretionary investment advisory services to the Funds
(which may be organized as domestic partnerships, corporations, limited liability companies or other
incorporated or unincorporated entities). The Limited Partners of the Funds are generally institutional
investors.

The limited partnership interests of the Funds are not registered under the Securities Act. Accordingly,
interests in such entities are offered exclusively to investors satisfying the applicable eligibility
requirements either in private placement transactions within the United States or in offshore transactions.
The Funds are excepted from the definition of an “investment company” under Section 3(c)(1) of the 1940
Act. Future investment vehicles may be formed that rely on the exception provided under Section 3(c)(7)
of the 1940 Act.

Limited Partners in the Funds are required to complete and submit a subscription agreement binding them

to the terms of the relevant Funds Documentation. The minimum investment is generally $1 million for the
Funds. However, such minimum investment amounts may be modified on a case-by-case basis in
accordance with the relevant Fund Documentation.