Transition Equity Partners LLC

Item 5 – Fees and Compensation

TEP 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. Limited partners
should refer to the Governing Documents of the applicable Fund for a complete understanding of
how TEP 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

TEP charges each Fund a management fee (the “Management Fee”), generally 2% per annum of non-
affiliated limited partners’ commitments. Specifically, Management Fees are initially charged at 2% of
each non-affiliated limited partner’s committed capital for the period of time during which each Fund
is making investments; thereafter, the Management Fee is equal to 2% of each non-affiliated limited
partner’s invested capital with respect to investments that have not been disposed of or completely
written off for U.S. federal income tax purposes. A Fund’s borrowings are generally taken into
account for purposes of calculating the Management Fee, as provided in each Fund’s Governing
Documents.

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 stepdown date, and will not be reduced in connection with any write-downs, except in
the case of investments that have been completely written off for U.S. federal income tax purposes.
Permanent write-down determinations are made in the discretion of the valuation committee in

accordance with the relevant Governing Documents and the Firm’s valuation policy. 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. 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
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 Management Fees after the stepdown date to be reduced. In most circumstances, the
post-stepdown Management Fee base will include capitalized transaction-specific fees and expenses
of unrealized investments, including transaction fees charged by TEP 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 quarterly 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 limited partners. All Management
Fees were negotiated with limited partners during the fundraising period of the applicable Fund and
are not subject to negotiation thereafter. Generally, limited partners participating in a subsequent
closing after the initial closing of a Fund are responsible for paying the Management Fee as of the date
of the initial closing of such Fund, plus interest, as applicable. In addition, Management Fees are
payable during term extensions unless otherwise notified to limited partners.

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 limited
partners in the same Fund. Such differences can arise from the size of a limited partner’s commitment
to a Fund, provisions of side letter agreements or other negotiated terms. Management Fees are
generally waived for TEP employees investing in a Fund (either as direct limited partners or through
a General Partner), affiliates, Operations Group members and their respective families investing in a
Fund (although in each case, these limited partners 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 TEP 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 closing fees, investment banking fees,
placement fees, litigation proceeds from transactions not consummated, monitoring fees, consulting
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Item 7 – Types of Clients

TEP provides investment advice to its Funds, which are exempt from registration under the
Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder
(the “Investment Company Act”). The Funds limit their respective limited partners to: (i) “accredited
investors” as defined in the Securities Act of 1933, and (ii) “qualified purchasers” or “knowledgeable
employees,” each as defined in the Investment Company Act, or (iii) if applicable, “qualified clients,”
as defined in the Advisers Act. Investors in the Funds must also meet certain other suitability
qualifications prior to making an investment in a Fund. The Funds are not registered or required
to be registered under the Investment Company Act, are not made available to the general public,
their securities are not registered or required to be registered under the Securities Act of 1933 and
Fund interests are privately placed to qualified investors. Qualified investors include individuals or
entities to which Fund interests are permitted to be sold, which generally includes (i) in the United
States, people or organizations who meet certain net worth, income and/or financial sophistication
requirements as described above or (ii) in other countries, as permitted by the relevant securities laws
in such jurisdiction and in compliance with any foreign offering provisions applicable to TEP and/or
the Funds. The Funds typically require capital commitments from each limited partner of at least $5
million, depending on the Fund, although the applicable Fund’s General Partner has, in its sole
discretion, accepted lesser amounts.

The limited partners participating in the Funds currently include and are expected in the future to
include high net worth individuals, other investment entities, university endowments, family offices,
pension and profit-sharing plans, trusts, estates or charitable organizations, fund of funds,
corporations, limited partnerships, limited liability companies or other business entities, Operations
Group members or other service providers retained by TEP, and typically include, directly or
indirectly, principals or other employees of TEP and its affiliates and members of their families.

On occasion, TEP offers co-investment opportunities for certain investors to invest alongside a Fund
in certain Fund portfolio companies. Opportunities to participate in co-investment transactions arise
when TEP has the opportunity for an investment in an existing or prospective portfolio company and
TEP 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) TEP 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 TEP 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. TEP’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.

TEP will select the investors that are permitted to co-invest in a particular portfolio company in its
sole discretion based on various factors, including those detailed in its Governing Documents and as
outlined in its internal policies and procedures. While one or more limited partners in the Funds are
on occasion invited to co-invest in a Fund’s portfolio companies, TEP is authorized in its sole
discretion to offer any or all of a co-investment opportunity to investors that are not limited partners
in the Funds. Co-investment opportunities are made available to select Fund limited partners and
third parties, including, without limitation, management or founders of the applicable portfolio
company, co-sponsors, strategic investors, lenders, investment bankers, deal sources (including finders
and consultants), other sponsors (including other private equity or venture capital firms), service
providers, Operations Group members, sector experts, strategic advisors, other persons or entities
affiliated, associated or otherwise known to TEP or its personnel. Certain service providers, including
lenders and individuals who source transactions, have in the past and are expected in the future to
negotiate co-investment rights or co-investment priority rights as a component of their compensation
in connection with the services provided. 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.

TEP can cause some co-investors to bear a Management Fee, Carried Interest or other fees while not
imposing a Management Fee, Carried Interest or other fees (or imposing different fees) on other co-
investors. In certain cases, co-investment opportunities can include opportunities to invest in Fund
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