VMG Partners II LLC

ITEM 5 - FEES AND COMPENSATION

       A.      Fees

The applicable fees for each VMG Fund are disclosed to investors in the private offering materials
for the relevant private offering of each VMG Fund. VMG, the General Partners or their affiliates
generally receive a management fee and the General Partners receive a “carried interest” or
performance fee, in each case, from the respective VMG Funds they manage. Performance fees
are typically measured as a percentage of the proceeds of the disposition of each portfolio company
investment by a VMG Fund, as more fully described in Item 6 below, and are negotiated separately
for each VMG Fund.
In addition, VMG, the General Partners or their affiliates have received, and may also in the future
receive, directors’ fees, transaction fees, topping and break-up fees, commitment fees, consulting
fees, advisory fees, monitoring fees, financing fees, divestment fees or other fees from portfolio
companies or prospective portfolio companies of a VMG Fund. Such fees are compensation for
financial advisory and similar services paid in connection with the consummating, monitoring or
disposition of investments or from unconsummated transactions, including warrants, options,
derivatives and other rights, in each case valued as of the grant date and the terms thereof generally
will be determined by the General Partners in their sole discretion. In certain circumstances, non-
affiliated co-investors or joint owners of such prospective portfolio companies have the ability to
influence the terms of the arrangements giving rise to any such fees, including, without limitation,
the timing and amount of payments and the inclusion of acceleration provisions in circumstances
in which a VMG Fund may or may not have otherwise included such provisions.
Typically, the management fees payable by each investor in a VMG Fund will be reduced by a
percentage of its pro rata share of any directors’ fees, transaction fees, topping and break-up fees,

commitment fees, consulting fees, advisory fees, monitoring fees, financing fees, divestment fees
or other fees received by VMG or its affiliates in connection with portfolio investments or
prospective portfolio investments of a VMG Fund. VMG Funds and investors that do not pay a
management fee do not receive the benefit of the offset or otherwise share in such fees. In addition,
any offsets to the management fee that would otherwise be allocable to the General Partners (or
their affiliates), any co-investment vehicle, any co-investor or any other transaction participant
(including portfolio company management) will not be applied to reduce the aggregate
management fee payable in respect of the limited partners in a VMG Fund and will be retained by
the recipient thereof or its designees. For the avoidance of doubt, any fees payable by any co-
investor shall not offset the management fee and shall be retained by the recipient thereof or its
designees and will not be applied to reduce the aggregate management fee payable in respect of
the limited partners. Offsets are applied after taking into account the effect of any management
fee waiver described below.
Under the applicable governing agreements of a VMG Fund, VMG or the applicable General
Partner is permitted to waive a portion of the management fee. Any such waived portion of the
management fee reduces the amount of capital the applicable General Partner (or its affiliates)
would otherwise be required to contribute to the respective VMG Fund. Upon a waiver, the
investors in a VMG Fund are then required to make a pro rata contribution according to their
respective commitments to fund any such waived management fee that VMG or the applicable
General Partner elects to treat as a contribution.

       B.      How Fees are Charged

Management fees are assessed semi-annually and payable by each investor in a VMG Fund
partially in advance on a semi-annual basis. Management fees are collected no earlier than the
business day after the beginning of each semi-annual period. Management fees are paid by capital
contributions from investors to each VMG Fund pursuant to capital call notices delivered by each
VMG Fund’s General Partner out of the total amount of capital an investor agrees to contribute to
the applicable VMG Fund (i.e., an investor’s “capital commitment”) or are paid out of cash that is
otherwise distributable to the investors in the VMG Funds, including cash held by a VMG Fund
after a portfolio investment of such VMG Fund is disposed of and before the proceeds are
distributed to investors (i.e., deducted from the assets of a VMG Fund). In addition, management
fees are permitted to be paid out of cash reserves of the applicable VMG Fund.
“Carried interest” or performance fees are assessed periodically, typically after the receipt by the
VMG Funds of proceeds from a portfolio investment and are generally paid out of cash otherwise
distributable to VMG Fund investors.
VMG has and may in the future exempt certain principals, employees, consultants, service
providers and executive management members of portfolio companies from payment of all or a
portion of management fees and/or “carried interest” on their direct or indirect investment in one
or more VMG Funds.

       C.      Other Fees and Expenses

Generally, each VMG Fund, bears all of the fees, costs, expenses and other liability or obligations
relating to or arising from its operations, activities, meetings and eventual liquidation (either
directly or indirectly through the payment of such expenses by portfolio companies). The

operating and offering documents of each VMG Fund set forth the particulars of operating
expenses that are borne by a VMG Fund. Such operating expenses could include, but are not
limited to, fees, costs and expenses including travel expenses (including, but not limited to, first
and/or business class airfare and/or private travel, ground transportation, lodging and
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ITEM 7 - TYPES OF CLIENTS

VMG provides investment advice only to the VMG Funds, which are its only clients. Interests in
the VMG Funds are offered privately to a limited number of sophisticated investors, including
institutional investors (for example, public and private pension funds) and individuals who qualify
to invest in the VMG Funds because they have a sufficiently high income or net worth. Such
investors are generally limited to (i) “accredited investors” within the meaning of the rules and
regulations promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and
(ii) “qualified purchasers” or “knowledgeable employees” within the meaning of the rules and
regulations promulgated under the Investment Company Act of 1940, as amended. VMG typically
imposes a minimum investment in connection with investing in a VMG Fund, often in the range
of $2.5 million to $10 million, although such minimums are permitted to be waived in the
discretion of VMG. In addition, each General Partner will generally make a capital commitment
to the applicable VMG Fund and its capital commitment will be funded through such General
Partner by members and employees of VMG, the applicable General Partner and in some cases,
other third parties. For certain VMG Funds, a General Partner’s capital commitment is permitted
to be to be structured as a profits interest.