The Sterling Group LP

Item 5 – Fees and Compensation
Management Fees and Performance Compensation

Sterling receives both a management fee and a performance fee for providing investment advisory
services to the Private Investment Funds. Such fees differ for each Private Investment Fund, are
negotiated with certain of the participating investors in each Private Investment Fund at the time of
its organization and are generally not negotiable thereafter. Additionally, to the extent permitted by
the governing documents, certain general partners have the right to permit investors, affiliated with
the general partner or otherwise, to invest through the relevant general partner or other vehicles that
do not bear management fees and/or performance fees. In general, the management fee reductions
described below apply only with respect to the commitments of fee-paying investors. Detailed
information regarding the fees charged to each Private Investment Fund is provided in each Private
Investment Fund’s offering documents and governing documents, which set forth the precise amount
and calculation of the management fees and the full list of terms under which a management fee will
be reduced, offset or otherwise be limited. Investors should expect to bear the full specified
management fee in the relevant governing documents until reduced in the circumstances and on the
date(s) specified therein.

       Management Fees

Management fees charged to each Private Investment Fund are generally payable quarterly in
advance, are non-refundable, and are pro-rated for any period that is less than a full calendar quarter.

The management fee charged to each Private Investment Fund is specified in the governing
documents of such Private Investment Fund and, for the Equity Funds, is generally determined based
upon a percentage of capital commitments to such Private Investment Fund during its investment
period, and a percentage of actively invested capital after the end of its investment period. For the
Credit Funds, management fees are generally determined based upon a percentage of actively
invested capital during the life of such Private Investment Fund. The Private Investment Funds will
pay Sterling an annual management fee based on a percentage as described above (the current
maximum percentage of the existing Private Investment Funds is 2.0% for the Equity Funds and
1.5% for the Credit Funds) commencing, generally, from the initial closing or the commencement
date of a Private Investment Fund (whether or not an investor was admitted at an initial or subsequent
closing) until all portfolio investments are distributed. Pursuant to the applicable governing
documents, the annual management fee is subject to reduction over time and to potential reductions
due to waivers and offsets under certain circumstances. Each limited partner in a Private Investment
Fund bears its pro rata portion of the management fee, subject to Sterling’s right to reduce or waive
fees as described below. As a general matter, management fees will be payable during term
extensions unless otherwise agreed with investors.

The governing documents of the Private Investment Funds provide that a Private Investment Fund’s
management fee will be calculated and charged on a basis that generally is not tied to the Private
Investment Fund’s then-current net asset value. As further specified in the governing documents,
after the end of the investment period for an Equity Fund, and during the life of a Credit Fund,

management fees generally will be charged based on a formula tied to actively invested capital
(including, where applicable, a Private Investment Fund borrowing component (including interest
expenses) and the amount of any capitalized Advisory Fees (as defined below) or expenses) made by
the relevant Private Investment Fund relating to the Private Investment Fund’s aggregate investments
in its portfolio companies that have not been realized or completely written off for U.S. tax purposes
(such investments, “Impaired Value Investments”). Due to differences in the criteria set forth in
their respective governing documents, in the event where more than one Private Investment Fund
participates in an investment, there is a possibility that an investment will become an Impaired Value
Investment for purposes of one Private Investment Fund’s governing documents but not to those of
one or more other Private Investment Funds.

Under the governing documents of the Private Investment Funds, where the fair market value of an
investment exceeds the total amount of investment contributions relating to such investment, post-
investment period management fees, as applicable, will not be calculated based upon applicable
appreciated value, and will instead continue to be calculated based on the amount of such investment
contributions. Conversely, the governing documents of the Private Investment Funds do not require
management fees to be reduced or refunded following the occurrence of a write down, decrease
(including a significant decrease) in fair value or other event not constituting a complete realization,
such as a partial sale or disposition, reorganization, recapitalization (including recapitalizations
involving dividends), roll-over investment in connection with a sale or dividend distribution, except
in the case of investments meeting the relevant Impaired Value Investment standard under the
governing documents of the Private Investment Funds. For the avoidance of doubt, following the
investment period, as applicable, if the fair market value of an Impaired Value Investment is less than
the total amount of investment contributions relating to such Impaired Value Investment, then the
amount of management fees otherwise payable relating to such investment will be reduced solely
based on the ratio of the fair market value of each relevant remaining investment(s) as compared
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Item 7 – Types of Clients
Sterling provides investment advice solely to its Private Investment Fund clients, and references
throughout this Brochure to Sterling’s related duties to and practices on behalf of its clients and/or
investors should be construed accordingly. Private Investment Funds include investment partnerships
or other investment entities formed under domestic or foreign laws and operated as exempt
investment pools under the Investment Company Act of 1940, as amended. The investors
participating in Private Investment Funds generally 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 include, directly or indirectly, partners or other
personnel of Sterling and its affiliates, as well as executives of portfolio companies.

The Private Investment Funds generally have a minimum investment amount of $5 million for third-
party investors, and Private Investment Fund interests are offered and sold solely to investors who
are qualified purchasers and accredited investors who are also qualified clients (or qualified
knowledgeable Sterling personnel). Sterling generally is permitted to waive such minimum
investment amount.