Sky Island Capital LP

Item 5: Fees and Compensation

The following is a general description of fees, compensation, and expenses of the Private Funds. In the
future, differences will exist from Private Fund to Private Fund, and certain Private Funds may not
charge certain fees, compensation, or expenses that other funds charge. The Governing Documents of
the Private Funds describe fees, compensation, and expenses in greater detail. Fees, compensation and
expense provisions for co-investment vehicles or co-investors may differ from Private Funds pursuant
to applicable governing documents for each such vehicle. Similar advisory services may be available
from other investment advisers for higher, similar or lower fees.

Management Fee
Sky Island or a General Partner will assess a Private Fund a management fee for advisory services
provided to the Private Funds in accordance with their respective Governing Documents. Private
Funds, with the exception of Sky Island MSC, Sky Island Capital Associates I LP, Sky Island Capital
Associates II LP, Sky Island Capital I SkyMark CIV LP, Sky Island Capital I USA CIV LP, and Sky
Island Capital II Plastic Partitions CIV LP are expected to pay the Firm quarterly in advance a
management fee of up to 2.0% of each limited partner’s committed capital during the Investment

Period and 2% of invested capital after the Investment Period as defined in each partnership’s
Governing Documents. For Sky Island MSC, the underlying portfolio company pays the Firm a fixed
management fee negotiated at the time of acquisition.
Other Fees and Compensation
Sky Island charges portfolio companies of Fund II a quarterly management fee equal to 5% of such
portfolio company's EBITDA. These fees are paid by the portfolio companies and are separate from the
fees paid by Fund II and its investors.
Sky Island has received transaction-based fees in connection with certain portfolio investments of Fund
I and Fund II. Specifically, such fees were received upon the closing of Fund II investments, as well as
in connection with the disposition of certain Fund I portfolio companies. Such transaction fees were paid
by the applicable portfolio companies or transaction counterparties and are separate from the fees paid
by Fund I and Fund II and their investors.
Management Fee Offset

To the extent specified in Fund Governing Documents, Sky Island or an affiliate or related person are
permitted to receive fees, commissions and other compensation from portfolio companies and in
relation to portfolio company transactions, subject to Management Fee offset provisions. Such fees
may include director’s fees, transaction fees, commitment fees, monitoring fees, break-up fees and
success fees or other remuneration (“Fee Income”). Fund Management Fees generally will be reduced
by the Fund’s applicable portion of such Fee Income. To the extent permitted by applicable Fund
Governing Documents, Fee Income received by Sky Island that is attributable to third-party investors
or co-investment vehicles generally will not reduce the Management Fees payable by any Private Fund.
Fee Income attributable to such investors will be retained by Sky Island or such investors may negotiate
the right to share a portion of such fees from a particular investment. In addition, Sky Island and its
affiliates may receive compensation for management and other services performed in connection with
co-investment vehicles, which will not reduce the Management Fees payable by any Private Fund.

Certain Governing Documents permit the General Partner to waive or agree to a reduction of the
Management Fee, and any waived or reduced portion of such Management Fee reduces the amount of
capital contributions the General Partner would otherwise be required to contribute to the Private Fund.
The General Partner reserves the right to treat any waived portion of a Management Fee installment
as a deemed capital contribution in respect of the General Partner’s commitment. Accordingly, the
limited partners of the applicable Private Fund typically would, in such circumstances, be required to
make a pro rata contribution according to their respective commitments to fund any contribution that
would otherwise be required of the General Partner in connection with any such waiver or reduction as
described above and, as a result, the exercise of such waiver may result in an acceleration of investor
capital contributions. Waived or reduced Management Fees are not subject to the Management Fee
offsets described above, and the amount of such waived or reduced Management Fees has the potential
to be significant.

Carried Interest

Subject to provisions in each Fund’s Governing Documents, Sky Island or an affiliate of Sky Island

generally is or may be entitled to receive an incentive distribution “Carried Interest” up to 20% of
distributable proceeds, subject to limited partners receiving a return of all capital contributions and a
preferred return (typically 8%). Fund investors may negotiate different Carried Interest arrangements
in side letters or other agreements. Investors and prospective investors should refer to a Fund’s
Governing Documents for a detailed description of the Carried Interest and distribution provisions.
Sky Island employees and affiliates generally are not subject to Carried Interest. For additional details
about performance-based compensation, please refer to Item 6 – Performance-Based Fees and Side-
by-Side Management.

Organizational Expenses

The Private Funds reimburse Sky Island (or the General Partner) for the Private Funds’ organizational
and startup expenses, including legal, travel, accounting, filing, capital raising and other organizational
expenses. Additionally, the General Partner will bear the cost (through an offset against the Management
Fee or otherwise) of any placement fees payable directly or indirectly to any placement agent in
connection with the formation of the Private Funds.

Other Expenses
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Item 7: Types of Clients

Sky Island provides investment advisory services to privately-offered pooled investment vehicles. For
information on minimum commitment amounts, please see the related Private Fund’s offering
documents.

Investment in the Private Funds is limited to investors that meet certain financial sophistication
requirements. Investors in the Private Funds must be (i) “accredited investors” within the meaning of
Regulation D under the Securities Act of 1933, as amended, and (ii) “qualified purchasers” within the
meaning of the Investment Company Act of 1940, as amended (the “1940 Act”). Certain of Sky Island’s
employees who qualify as “knowledgeable employees” under Rule 3c-5 of the 1940 Act are also
permitted to invest directly or indirectly in the Private Funds. Investors considering an investment in
the Private Funds should consult with their own investment, tax and/or legal consultants prior to
investing. Sky Island may waive such minimum investment amounts and qualification requirements
in its discretion.