STG Partners LLC

ITEM 5 − FEES AND COMPENSATION

        STG and its affiliated General Partners receive fees and compensation in exchange for
advisory services provided to the Funds, including a management fee (the “Management Fee”),
carried interest (“Carried Interest”), additional compensation in connection with the provision of
advisory services 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 in fees
and expenses 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. Limited partners should refer to the
Governing Documents of the applicable Fund for a complete understanding of how STG 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

        The Flagship Funds and the Allegro Funds initially pay a Management Fee equal to 2.0% on
an annual basis of aggregate non-affiliated limited partner capital commitments (“Commitments”)
payable quarterly in advance. Upon the occurrence of certain events set forth in the applicable
Governing Documents, such as when a Fund’s investment period expires, when STG begins to accrue
Management Fees with respect to certain new investment funds or following certain key person
events, the Management Fee will be reduced to an amount equal to 2.0% on an annual basis of the
aggregate amount of investment contributions made by non-affiliated limited partners with respect to
investments that have not been disposed of, less the aggregate amount of any write-offs of such
investments, subject to any limitations set forth in such Governing Documents. For certain Funds,

such Fund’s borrowings are generally taken into account for purposes of calculating the Management
Fee, as provided in each Fund’s Governing Documents.

        As is generally the case in private equity funds, the Governing Documents provide that a
Fund’s Management Fees will be calculated and charged on a basis that generally is not tied to the
Fund’s then-current net asset value. As further specified in the Governing Documents, from the
effective date of the relevant Fund until a date specified in the Governing Documents (generally
representing the earlier of the end of the Fund’s defined investment period, the date the relevant
General Partner (or an affiliate thereof) first begins receiving or accruing Management Fees from
another Fund meeting certain criteria, and a certain time after a “key person” event) (the “Stepdown
Date”), Management Fees generally will be charged based on a formula tied to the amount of the
relevant Fund’s aggregate Commitments. Further, after the Stepdown Date, Management Fees
generally will be charged and calculated based on a formula tied to the amount of investment
contributions made by the relevant Fund that have not been disposed of or completely written-off for
U.S. federal income tax purposes.

        Under the Governing Documents, where the aggregate fair market value of an investment
exceeds the total amount of investment contributions relating to such investment, post-Stepdown
Date Management Fees will not be calculated based upon such appreciated value and will instead
continue to be calculated based on the amount of such investment contributions. Where there has
been a partial distribution, partial permanent write down or partial sale of an investment and the fair
market value of such investment following such event exceeds the total amount of investment
contributions relating to such investment, the Governing Documents do not require Management
Fees after the Stepdown Date to be reduced.

         As a result, 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 any write
downs (whether temporary or permanent), except in the case of investments that have been disposed
of or completely 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), partial
sales, 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 or that occur partway through the relevant
calculation period. Further, where there has been a partial disposition or permanent write-down of a
Fund’s investment and the fair market value of the investment following such event exceeds the total
amount of the Fund’s investment contributions relating to the investment, the Governing Documents
do not require the post-Stepdown Management Fees to be reduced. In most circumstances, the fair
market value component of such post-Stepdown Date Management Fees will include capitalized
transaction-specific expenses of unrealized investments, 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.

       The Governing Documents set forth the full list of terms under which Management Fees will
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ITEM 7 − TYPES OF CLIENTS

        STG provides investment advice solely to its Fund clients, and references throughout this
Brochure to “clients” and to STG’s related duties to and practices on behalf of its clients and/or
limited partners should be construed accordingly. The Funds generally include investment
partnerships or other investment entities formed under U.S. or non-U.S. laws and operated as exempt

investment pools under the Investment Company Act of 1940, as amended (the “Investment
Company Act”). Certain Funds are structured to include alternative investment vehicles established
from time to time in order to permit one or more limited partners to participate in one or more
particular investment opportunities in a manner desirable for tax, regulatory or other reasons.
Alternative investment vehicle sponsors generally have limited discretion to invest the assets of these
vehicles independent of limitations or other procedures set forth in the organizational documents of
such vehicles and the related Fund.

        Subject to certain suitability and net worth qualifications, limited partners participating in the
Funds include individuals, banks or thrift institutions, insurance companies, endowments, sovereign
wealth funds, family offices, pension and profit-sharing plans, trusts, estates or charitable
organizations, corporations or other business entities or other investment entities, and from time to
time include, directly or indirectly, principals or other employees of STG and its affiliates and members
of their families, Operations Group Members or other service providers retained by STG, as well as
executives of portfolio companies. The Funds generally have a minimum investment amount of $20
million for third-party investors, which on occasion has been waived by the applicable General
Partner. Fund interests are generally offered and sold to “qualified purchasers” as defined in the
Investment Company Act (or qualified knowledgeable STG employees).

        From time to time and as permitted by the relevant Governing Documents, STG provides (or
agrees to provide) investments or co-investment opportunities (including the opportunity to
participate in Co-Investment Funds) to certain current or prospective limited partners or other
persons, including other sponsors, market participants, finders, lenders, consultants and other service
providers, STG personnel and/or certain other persons associated with STG and/or its affiliates. In
certain cases, determinations to allocate such amounts or investment opportunities to vendors or
service providers will be made prior to the determination of the availability of opportunity for other
co-investors, and as such generally will decrease the amount of co-investment opportunities available.
As referenced in Item 4, above, co-investments have been structured either as (i) a separate Co-
Investment Fund or (ii) a direct investment by certain investors into a portfolio company or its holding
or operating company. When structured as a Co-Investment Fund, STG considers the investment to
be a Fund client, identifies the Fund in its Form ADV Part 1, Schedule D, Section 7.B.(1), obtains an
audit for the Fund, reserves the option to assess a Management Fee and Carried Interest on such Fund
and includes the amount of assets of such Co-Investment Fund in the Management Company’s
regulatory assets under management. In the case of direct co-investments, STG does not consider
the investment to be a Fund or a client, does not act as the investment manager to the co-investment
portion of the investment, does not charge Management Fees or Carried Interest to the investment,
does not have custody of the investment or include the amount of assets of the co-investment in the
Management Company’s regulatory assets under management. In such direct co-investment
opportunities, STG will perform management, advisory and other services for the portfolio companies
in which these co-investors invest, generally at no cost to such co-investors except portfolio company
fees and expenses (which such fees and expenses are recorded at the portfolio company).

         Opportunities to participate in co-investment transactions arise when STG has the
opportunity for an investment in an existing or prospective portfolio company and STG determines
that (i) an investment requires additional capital, (ii) all or a portion of the applicable opportunity is
not required to be offered to a Fund, (iii) the full investment opportunity is not appropriate for a
Fund, whether due to concentration restrictions contained in the Fund’s Governing Documents or
otherwise or (iv) STG believes the Fund will benefit from the participation of the co-investor(s). Such
determinations are based on the provisions of the applicable Governing Documents, side letter
agreements, agreements with lenders and such other factors as STG will consider in its sole discretion,
including those specified in its policies on investment allocation and co-investments. Subject to any
restrictions contained in the Governing Documents of the relevant Fund or any side letter or other
terms negotiated with respect to such Fund, in general no investor has a right to participate in any co-
investment opportunity. STG’s exercise of discretion in allocating co-investment opportunities will
not always result in proportional allocations among co-investors and such allocations can be more or
less advantageous to some co-investors relative to other co-investors. When co-investment
opportunities are permitted, it is possible that the size of the investment opportunity otherwise
available to the Fund will be less than it would otherwise have been without the inclusion of such co-
investors.

        STG can cause some co-investors in a Co-Investment Fund to bear a Management Fee,
Carried Interest or other fees while not imposing a Management Fee, Carried Interest or other fees
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