SPC Management Co Inc

Item 5 – Fees and Compensation

SPC and its affiliated General Partners receive fees and compensation in exchange for advisory services
provided to the Funds, including management fees, carried interest, additional compensation in
connection with management services performed for the portfolio companies of the Funds and
reimbursements from portfolio companies for certain expenses advanced on their behalf. The Funds
are also responsible for bearing certain expenses as detailed below and in each Fund’s Governing
Documents. Differences exist from Fund to Fund, and certain Funds do not charge certain fees,
compensation, or expenses that other Funds charge or charge them in different amounts. The following
is a general description of fees, compensation, and expenses of the Funds. Investors should refer to the

Governing Documents of the applicable Fund for a complete understanding of how SPC is compensated
for its advisory services; the information contained herein is a summary only and is qualified in its entirety
by such documents.

Management Fees

SPC charges each Fund a management fee (the “Management Fee”), charged on a specified percentage
per annum of non-affiliated investor’s commitments or invested capital, depending on the life cycle of
the Fund and as further detailed in each Fund’s Governing Documents. As specified in the relevant
Governing Documents, from the effective date of the relevant Fund until a date specified in the
Governing Documents (generally representing the end of the Fund’s defined commitment period (the
“Stepdown Date”)), Management Fees generally will be charged based on a percentage of the relevant
Fund’s aggregate commitments. After the Stepdown Date, Management Fees generally will be charged
based on a percentage of investment contributions made by the relevant Fund that have not been
disposed of or permanently written down for U.S. federal income tax purposes, minus the aggregate
amount of permanent write downs.

The amount of Management Fees generally will not correspond with fluctuations in the net asset value
of individual investments, aggregate investments in a portfolio company or of a Fund, including following
the investment period, and will not be reduced in connection with write downs, except in the case of
investments permanently written off for U.S. federal income tax purposes. Except where the Governing
Documents expressly provide to the contrary, Management Fees will not be reduced (in whole or in part)
in the case of partial distributions (e.g., those resulting from a dividend recapitalization), reorganizations,
restructurings, roll-over investments or similar transactions, in each case in circumstances that do not
result in the complete disposition of the relevant Fund’s interest therein, and even in cases where the
value of such Fund’s investment or ownership percentage in a portfolio company has been reduced as a
result of such transaction. In addition, Management Fees generally will not be reimbursed or refunded
under the Governing Documents in the event of realizations, dispositions, or partial write-downs that
occur partway through the relevant measurement period. In most circumstances, the post step-down
Management Fee base will include capitalized transaction-specific fees and expenses of unrealized
investments, including transactions fees charged by SPC in connection with the investment, which poses
a conflict of interest in that the inclusion of such fees and expenses results in a higher Management Fee
than if such transaction fees and expenses were not capitalized into the asset base.

Assessed semi-annually in advance, Management Fees are collected through a capital call, through a draw-
down on the Fund’s line of credit or offset against a distribution to investors. All Management Fees
were negotiated with investors during the fundraising period of the applicable Fund and are not subject
to negotiation thereafter. If investors participate in a subsequent closing after a Fund’s initial closing
date, they generally will be assessed Management Fees retroactive to the effective date plus additional
fees, as described in the relevant Governing Documents. As a general matter, Management Fees will be
payable during term extensions unless otherwise agreed with or notified to investors.

The General Partners are permitted, in their sole discretion, to reduce or waive all or a portion of the
Management Fee. Management Fees can differ from one Fund to another as well as among investors in
the same Fund. Such differences can arise from the size of an investor’s commitment to a Fund,
provisions of side letter agreements or other negotiated terms. Management Fees are generally waived
for SPC employees investing in a Fund (either as direct investors or through a General Partner), affiliates,
Operating Partners and their respective families investing in a Fund (although in each case, these
investors generally pay their pro rata share of certain Fund expenses).

Management Fees will generally be reduced by, as applicable: (i) the amount of fees paid by a Fund to
entities or persons acting as a placement agent in connection with the offer and sale of interests in such
Fund; (ii) costs incurred by SPC in connection with the organization of a Fund that exceed a limit as
specified in such Fund’s Governing Documents; (iii) certain supplemental fees and compensation with
respect to portfolio companies, including director’s fees, consulting fees, commitment fees, monitoring
fees, transaction fees, break-up fees and success fees or other remuneration (including any options,
warrants or other equity securities) (together, “Portfolio Fees”). The receipt of such Portfolio Fees is
offset against the Management Fee paid by a Fund as described below and in each Fund’s Governing
Documents, net of any expenses incurred in connection with any consummated or unconsummated
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Item 7 – Types of Clients

SPC provides investment advice solely to its Fund clients, which are exempt from registration under the
Investment Company Act of 1940, as amended (the “Investment Company Act”). Generally, investors
in the Funds must be (i) “accredited investors” as defined under Regulation D of the Securities Act of
1933, as amended, and (ii) for certain Funds, either “qualified purchasers” or “knowledgeable employees”
as defined under the Investment Company Act or (iii) if applicable, “qualified clients,” as defined in the
Advisers Act. Investors in the Funds must also meet certain suitability and net worth qualifications prior
to making an investment in the Funds. The Funds generally have a minimum investment amount of $5
million for third-party investors, although individual commitments of lesser amounts have been accepted
at the discretion of the General Partner.

The investors participating in Funds include individuals, banks or thrift institutions, other investment
entities, pension and profit-sharing plans, trusts, estates or charitable organizations or other corporations
or business entities and may include, directly or indirectly, employees of SPC and its affiliates, as well as
executives of portfolio companies.

As referenced in Item 4 above, from time to time, SPC offers certain current or prospective investors or
other persons the opportunity to invest alongside a Fund in certain Fund portfolio companies, typically
in circumstances when a Fund requires additional capital in order to complete a transaction. These co-
investments are not managed by SPC, are not subject to custody by SPC and are not deemed to be clients
of SPC. Nevertheless, SPC will perform management, advisory and other services for the portfolio
companies in which these co-investment vehicles invest alongside the Funds, generally at no additional
cost to such vehicles except portfolio company fees and expenses (which such expenses are recorded at
the portfolio company).

Although co-investment vehicles and co-investors typically invest and dispose of their investments in the
applicable portfolio company at substantially the same time and on substantially the same terms as the
SPC Fund making the investment, co-investors are generally subject to different economic terms than
the Fund. From time to time, for strategic and other reasons, a co-investment vehicle or co-investor
purchases a portion of an investment from a Fund after such Fund has consummated its investment in
the portfolio company (also known as a post-closing sell-down or transfer). Post-closing sell-downs are
generally funded through the Fund’s investor capital contributions and/or use of a Fund credit facility.
Any such purchase from a Fund by a co-investment vehicle or co-investor generally occurs shortly after
the Fund’s completion of the investment to avoid any changes in valuation of the investment; however,
in certain instances, a post-closing sell-down or transfer could occur well after the Fund’s initial purchase.
When co-investors purchase their interest from a Fund after the Fund has consummated the investment,
the price paid by co-investors is typically determined by the Fund’s General Partner in its sole discretion,
which has the potential to result in a conflict of interest. The Funds will bear the risk that any co-

investors acquiring an interest in an investment after the closing of such investment will acquire such
interest on terms that do not reflect the then-current value of such investment. Where appropriate, and
in SPC’s sole discretion, SPC reserves the right to charge interest on the purchase to the co-investor or
co-invest vehicle (or otherwise equitably to adjust the purchase price under certain conditions), and to
seek reimbursement to the relevant Fund for related costs. However, to the extent such amounts are not
so charged or reimbursed, they generally will be borne by the relevant Fund. The price reimbursed to
the Fund may not reflect the full cost incurred by the Fund in connection with the investment, any
interest charge on the co-investment amount, the cost of establishing the credit facility utilized to acquire
the portfolio company (if applicable) or the risk borne by the Fund in connection with purchasing and
warehousing the investment.

In either case, potential co-investors typically do not bear any transaction costs of investments that are
not consummated and are not subject to the same risks to which a Fund is throughout the investment
process. As fees paid by or on behalf of co-investors are not subject to a Management Fee offset and
are thus retained by SPC, the opportunity to receive such fees presents a conflict of interest in that SPC
could be incentivized to allocate a greater portion of an investment to a co-investor than it would have
otherwise allocated absent such an arrangement. SPC seeks to address any such potential conflict of
interest by investing in accordance with its policies and procedures governing investment allocation and
co-investments. In addition, to the extent that SPC engages in a secondary liquidity transaction in
connection with an investment, co-investors will not necessarily receive the same liquidity options as
investors in a Fund and may therefore be compelled to receive cash or continue to hold an interest in the
investment, depending on the particular facts of the transaction.

In the event SPC is not successful in offering a co-investment opportunity to potential co-investors, in
whole or in part, it is possible that a Fund will consequently hold a greater concentration and have greater
exposure in the related investment opportunity than was originally intended, which could make the Fund
more susceptible to fluctuations in value resulting from adverse economic and/or business conditions
with respect thereto and would result in a greater concentration of risk as a result. In addition, as a
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