Sverica Capital Management LP

Item 5: Fees and Compensation

A. Description

The respective General Partners of Sverica’s Clients structured as limited
partnerships, all of which are affiliates of Sverica, are entitled to management fees
(based on a percentage of partners’ capital commitments during the investment
period defined in the limited partnership agreements, generally 5 years from the final
closing date, and based on cost of portfolio investments thereafter), and also to
performance-based fees from each respective Client. Sverica provides certain
management and operational services for its Clients pursuant to management
services agreements with the General Partners and under which management fees
are directed to Sverica.

Management fees are computed quarterly, not to exceed 2.25% of the committed
capital of the limited partner. The limited partnership agreements of the respective
Clients provide for a prospective reduction in the next quarterly management fee
computation based on amounts collected by Sverica in the current quarter period for
transaction fees, broken deal fees, ongoing monitoring, consulting and advisory fees
and other similar fees from portfolio companies. The limited partnership agreements
provide for sharing a fixed percentage of collected fees or for sharing a fixed
percentage of the excess of collected fees over a specified limit during each annual
period and, for three Clients, cumulative collected fees retained by Sverica are
subject to a life of the fund cap. Management fees to private equity fund Clients are
further reduced dollar for dollar by an amount that the respective Clients’ General
Partners otherwise would have been required to make in cash contributions. Clients
also pay respective affiliates of Sverica a performance allocation in the form of
carried interest generally equal to twenty percent (20%) of net distributed cash or
securities (distributed to the General Partner pursuant to arrangements which are
thoroughly described in the applicable governing documents) after all of the
Client’s partners have received the sum of a return of their capital contributions
made for i.) cumulative fund expenses adjusted, where applicable, for management
fees applied to the limited partner class, and ii.) the cost of investments that have
been realized or written off; plus iii.) a preferred annual return of 8%, compounded,
as provided in the respective limited partnership agreements. In the case of one
Client, the carried interest could be up to 30% if certain performance thresholds are
met. Investors that participate in co-investment opportunities alongside Sverica
funds (which may include investors that are limited partners of such Sverica funds
or other funds managed by Sverica, or third parties) may or may not pay to Sverica
or its affiliates management fees, carried interest and/or other expenses in
connection with such co-investments.

B. Fee Billing

Management fees are computed quarterly and paid in advance with the next
succeeding quarter’s fees due on the first business day of each quarterly period.
Generally, capital is called from the partners in the respective Clients to enable
payment of management fees but proceeds from sales of portfolio companies or
from distributions from portfolio companies may be used for this purpose in the
discretion of the General Partner. Once sufficient funds are available and upon
attainment of the due date, Sverica deducts its fees from the respective Clients’
accounts.
Clients structured as limited partnerships also pay respective affiliates of Sverica a
performance allocation in the form of carried interest generally equal to twenty
percent (20%) of net distributed cash or securities after all of the Client’s partners
have received the sum of a return of their capital contributions made for i.)
cumulative fund expenses adjusted, where applicable, for management fees applied
to the limited partner class, and ii.) the cost of investments that have been realized
or written off; plus iii.) a preferred annual return of 8%, compounded, as provided
in the respective limited partnership agreements. In the case of one Client, the
carried interest could be up to 30% if certain performance thresholds are met.
Performance allocations are generally paid by deduction from the respective
Clients’ accounts following receipt of the proceeds from a sale or realization of
portfolio investments or may be paid in kind as part of a fund liquidation.

C. Other Fees and Expenses
Each Client shall pay all fees, costs, expenses, liabilities and obligations relating to
the respective private equity fund Client and/or its subsidiaries’ activities,
investments and business, including, without limitation:
(a) any taxes, fees, interest, penalties or other governmental charges (except as
provided below) levied against the private equity fund Client and all expenses
incurred in connection with any tax audit, investigation, dispute, settlement or
review of the Client (other than taxes, fees, interest, penalties or other amounts
attributable to one or more partners).
(b) duties, fees or government charges of any kind which may be assessed against
the Client;
(c) all fees, costs, expenses (including travel, lodging and meal expenses; provided
that any private air travel expenses borne by the Client shall be limited to the cost
of equivalent first class commercial airfare), liabilities and obligations incurred in
the investigation, due diligence, negotiation, sourcing, organizing, structuring,
monitoring, holding, acquiring, managing, operating, taking public or private,
valuing, hedging, restructuring, winding up, liquidating, dissolving, sale, exchange
or disposition of the Client’s investments (whether or not any transaction by the
Client is ultimately consummated) including, without limitation, any financing,
legal, tax, accounting, advisory, consulting, other professional fees and expenses,
and interest and fees on money borrowed by the Client, the management company,
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Item 7: Types of Clients

Description

Sverica Capital Management provides investment advisory services to private
equity funds on a discretionary basis.

Account Minimums

The private equity fund Clients structured as limited partnerships that Sverica
manages have minimum capital commitments ranging from $0 to $5,000,000 for
their respective limited partners. Each limited partner in each private equity fund
Client must meet the eligibility requirements specified in the subscription
agreements for each fund.