SC Management LLC

Item 5 – Fees and Compensation
Fee Schedule
The specific fees and compensation payable to the Firm are typically not negotiable and may (and
do) vary among the SC Funds. However, the types of fees and compensation payable to SC
Management and any affiliated Special Member entities are generally the same and are described
below. Prospective Investors should review the specific fees and expenses disclosures applicable
to each SC Fund or SPV contained in the Governing Documents for those entities.

Management Fee
SC Management typically receives an annual investment management fee equal to a percentage
(generally, 2% payable quarterly in advance) of the applicable SC Fund’s committed capital
commencing on the initial closing date as set forth in the respective SC Fund’s Governing
Documents. During a specified period following an SC Fund's initial closing, the management fee
is generally calculated based on the applicable investor's capital commitment. Following this
period, the management fee percentage may be reduced as set forth in the applicable Governing
Documents. However, certain SC Funds have paid fees ranging from 2% to 4% at closing, and
certain SC Funds do not currently pay management fees as determined by SC Management or
the applicable Special Member at their discretion. Furthermore, SC Management or the Special
Members may waive fees and expenses for certain investors affiliated with SC Management, or
structure multiple fee options within any vehicle at SC Management’s or the Special Members’
discretion.

LR Manager receives a fee of 2.5% of committed capital for the first four years of operations and
no fee thereafter.

For a description of intercompany compensation arrangements between SC Management and
LR Manager, including any amounts paid by LR Manager to SC Management for shared services,
please see Item 10.

Performance-Based Compensation
SC Management generally charges performance-based compensation to Clients. The amount
and calculation methodology of the compensation is outlined in each relevant SC Fund’s
Governing Documents; however, the fee is typically equal to a percentage (generally, 20%) of all
realized profits and usually subject to a clawback at the end of life of the SC Funds if the Special
Members, as applicable, have received excess cumulative distributions.

SC Management and the Special Members reserve the right to modify or waive the fees outlined
above for any investor at any time subject to SC Management’s or the Special Member’s
discretion.

Performance-based Compensation will only be paid by “qualified clients” as defined in Rule 205-
3 of the Investment Advisers Act of 1940, as amended (“Advisers Act”).

Side Letters
As noted above, SC Management or an affiliated Special Member may (and does) waive, reduce,
defer, or calculate differently the management fee or carried interest with respect to individual
investors or make other such adjustments to the terms of the relevant investment vehicle as SC
Management deems reasonable. Side Letters may grant certain investors in the SC Funds
materially advantageous fee and expense, liquidity, or transparency terms than those provided in
the relevant Governing Documents.

Broken Deal Expenses
The Investment Objectives pursued by SC Management and the SC Funds differ from those
pursued by LR, but there remains an opportunity for potential cross-over or joint investing.
“Broken Deal Expenses,” as outlined in the Governing Documents, will be allocated entirely to the
relevant investment vehicle(s) that were intending to invest, irrespective of whether any actual or
potential co-investment partnerships or additional entities might have invested should the
investment have been successful.

Payment of Fees
Management fees, performance-based fees, and other fees and expenses are typically deducted
from the applicable vehicle’s assets. If management fees are assessed, they will be paid quarterly
in advance unless otherwise set forth in the applicable Governing Documents. Performance-
based fees are only paid when the SC Funds distribute realized proceeds to investors pursuant
to such SC Fund’s Governing Documents.

The Firm does not receive a management fee with respect to the General Partner’s or other
affiliated Special Member’s capital commitment.

Fund Expenses and Other Fees
Each SC Fund bears (or reimburses the Firm or Special Member, as applicable) all costs,
expenses, liabilities and obligations relating to such SC Fund’s and/or its subsidiaries’ or holding
entity’s incurred in connection with operation of its activities, investments and business (to the
extent not borne or reimbursed by a portfolio company), including but not limited to those costs
associated with holding or sale of securities; all legal, audit, registration, financial fees; the cost
of SC Fund meetings; and any extraordinary expenses of such SC Fund. Each SC Fund shall
bear its pro rata share of all organizational and syndication costs, fees and expenses incurred in
connection with the formation and organization of such SC Fund, any parallel funds, the General
Partner or other affiliated Special Member and the Firm. The management fee will be reduced by
any placement fees paid by a SC Fund with respect to the sale of interests in the SC Fund.
Investors should review all fees and expenses charged by the Firm, its affiliates, and others to
fully understand the total amount of fees and expenses to be paid by the SC Funds and, indirectly,
their limited partners.

It is critical that Investors refer to the relevant confidential Governing Documents for a
complete understanding of fees and expenses. The information contained herein is a
summary only and is qualified in its entirety by such documents.

Prepayment of Fees
The SC Funds invest primarily in the securities of private companies on a long-term basis.
Accordingly, all fees are paid during the term of the SC Funds and Investors are generally not
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Item 7 – Types of Clients

The Firm provides investment advisory services to pooled investment vehicles (including parallel
funds, SPVs and Co-investment vehicles) which generally operate as exempt investment
companies under the Investment Company Act of 1940, as amended. The Firm intends to restrict
the number of Investors in the SC Funds and will offer Interests only through non-public
transactions to maintain their exclusion from “investment company” status under the Investment
Company Act.

Prospective Investors in the SC Funds must meet eligibility criteria and are subject to certain
withdrawal requirements and limitations. Prospective Investors are encouraged to thoroughly
review the applicable SC Fund’s Governing Documents, which set forth all of the terms in detail.
Each Investor generally must be an “accredited investor” (as defined in Regulation D under the
Securities Act) and a “qualified client” (as defined in Rule 205-3 under the Advisers Act) or a
“qualified purchaser” (as defined in Section 2(a)(51) under the Investment Company Act) and
must meet other criteria as specified in the Governing Documents. The minimum initial investment
varies by SC Fund and any applicable minimums are and will be disclosed in the Governing
Documents and subject to waiver at the discretion of the Firm.

In certain situations, SC Management or the Special Members may determine that it is in the best
interests of the SC Fund to offer a co-investment opportunity. In those circumstances, SC

Management and the relevant General Partner or Special Members may, but are not obligated
to, offer the co-investment opportunity to current limited partners of the SC Fund. Co-investment
opportunities may also be allocated to non-affiliated third parties for a variety of strategic reasons.
The Firm does not guarantee interests in co-investments to any investor, prospective investor, or
unaffiliated third parties and such interests are offered at the sole discretion of SC Management
or the relevant General Partners and Special Members.