Velocity Capital Management LLC

ITEM 5 – FEES AND COMPENSATION

Investors and prospective Investors in a particular Private Fund should review the applicable
Offering Materials for more complete information on the fees, expenses and other compensation
payable with respect to that Private Fund. The information contained in this Brochure is a
summary only and is qualified in its entirety by reference to those documents.

   A. Compensation for Advisory Services

The Private Funds compensate Velocity for its advisory services through the payment of
management fees. In addition, the General Partner may receive performance-based compensation
(commonly referred to as carried interest) from the Private Funds as described in Item 6 of this
Brochure. The specific terms relating to the fees and compensation paid by each Private Fund are
set at the time of its formation and, as such, may vary from fund to fund. Following their formation,
the fees paid by Private Funds are not open to renegotiation.

With respect to each Private Fund, Velocity generally receives a management fee based on a fixed
percentage of the fund’s total capital commitments. During the period in which the Private Fund
will be making investments, the management fee payable to Velocity for each calendar quarter
generally will equal a specified percentage of the committed capital of the fund. Following the
end of the Private Fund’s commitment period, the management fee payable to Velocity for each
calendar quarter until the termination of the fund generally will equal a specified percentage of the
invested capital of the fund, which is determined by reference to the cost of assets remaining under
management. To the extent the management fee is paid by a Private Fund that is structured as a
master fund, no management fee will be paid at the corresponding feeder fund level. For its Private
Fund clients, Velocity’s management fee rate ranges from zero to 2.0% per annum. Management
fees may be reduced or waived with respect to certain Investors, including the co-founders of the
firm (the “Co-Founders”), officers, directors, and affiliates of Velocity or the General Partner, and
certain large and/or strategic Investors.

   B. Fee Deduction

Velocity is authorized under each Fund Agreement to deduct fees applicable to the relevant Private
Fund directly from the Private Fund’s assets. The Private Funds do not have the ability to choose
to be billed directly for fees incurred. Management fees are paid to Velocity in cash quarterly in
advance, with fees for any period shorter than a full quarter being pro rated for such quarter.

   C. Other Fees and Expenses

Velocity, its employees, the Operating Partners (as defined in Item 8), the General Partner, and
related persons and affiliates may receive certain transaction fees, advisory fees, directors’ fees,
break-up fees or other similar fees or compensation in connection with portfolio investments of a
Private Fund as compensation for advisory, consulting and similar services provided to the fund’s
portfolio companies. These fees and compensation, and the associated conflicts of interest they
present, are further described in Item 11 of this Brochure. Generally, if a Velocity employee
receives any directors’ fees from the portfolio companies of a Private Fund, a portion of these fees
allocable to the Private Fund will offset the management fees payable by the Private Fund to the

extent specified in the applicable Fund Agreement. However, no other compensation received by
Velocity, its employees, the Operating Partners, the General Partner or related persons or affiliates
from the portfolio companies or any other persons or entities will be subject to this offset unless
otherwise specified in the applicable Fund Agreement.

As set forth in the Fund Agreements, the Private Funds bear all reasonable organizational costs
and expenses of the Private Funds and their related entities, including the General Partner and
Velocity, in some cases up to a specified maximum. Additionally, each Private Fund is responsible
for all expenses relating to its own operations, including without limitation:

   •       management fees payable to Velocity, as described above;
   •       expenses (including transportation, meal and lodging expenses of the personnel of the
           General Partner and Velocity) relating to the origination, evaluation, diligence,
           valuation, structuring, negotiation, acquisition, financing, asset management, holding,
           monitoring, capitalization and sale or disposition of or bid on actual and potential
           Private Fund investments (whether or not consummated), including any costs related
           to transactions that may have been offered to co-investors;
   •       fees, costs and expenses related to broker, dealer, finder, underwriting (including both
           commissions and discounts), loan administration, private placement, sales, investment
           banking and other similar services;
   •       any and all expenses incurred in connection with the engagement of third-party
           investment sourcing consultants to identify investment opportunities for the Private
           Fund, and who may be engaged on an exclusive or nonexclusive basis (for the
           avoidance of doubt, such expenses shall include success or similar fees paid to such
           consultant upon the consummation of an investment, retainer fees paid on an ongoing
           basis to such consultants, reimbursement for expenses incurred by such consultant in
           connection with the engagement, and the reasonable use of Private Fund’s resources to
           further such consultant’s engagement);
   •       sales commissions and fees, commitment fees, nonrefundable deposits and costs and
           expenses incurred in connection with the acquisition or disposition of actual or
           potential investments (whether or not consummated) (including the Private Fund’s
...

ITEM 7 – TYPES OF CLIENTS

Velocity provides investment advisory services solely to Private Funds, as described in Item 4 of
this Brochure. Each Investor in the Private Funds must meet certain eligibility requirements.
Specifically, each investor in the Private Funds is required to represent that it is an “accredited
investor” as defined in Regulation D under the Securities Act of 1933 and a “qualified purchaser”
as defined in section 2(a)(51)(A) of the Investment Company Act of 1940. The Private Funds
require a significant minimum capital commitment from an Investor.