Wellspring Capital Management LLC

Fees and Compensation
WCP V paid a management fee to the Registrant in accordance with the terms of its offering
documents. Management fees were generally payable tri annually in advance. Such fees were payable
on a pro rata basis for any period that is less than a full four-monthperiod. Fee arrangements vary for
the Registrant Clients and are described in the constituent documents for each Registrant Client. Each
of the investment advisory agreements or other constituent documents generally provided for an
annual management fee of 1.0%-2.0% of either thecapital commitments or the actively invested
capital of third-party investors in a Registrant Client during the expected life of the Registrant Client.
All management fees were negotiated with the Registrant Clients’ investors during the fundraising

period of the applicable Registrant Client. WCP V is no longer paying management fees as the
period in which fees were payable has concluded.

WCP V is subject to a carried interest of 20% of profits on distributions derived from the disposition
of investments or securities on an investment-by-investment basis (after taking into account expenses
of the Registrant Client, including management fees). Investors receive an 8% preferred return prior
to the imposition of the carried interest (generally calculated based on cumulative cash flows), after
which the carried interest “catches up”to 20% of total profits. Subject to any giveback, at the time of
each distribution, investments which have suffered a permanent diminution in value, as determined
at the discretion of the general partner, must be returned to investors (including the preferred return
thereon) before carried interestis owed to the general partner.

In making the determination whether or not, and when, a particular investment has suffered a
permanent diminution in value, the Adviser has an incentive to (i) make more speculative
investments prior to the end of a Registrant Client’s investment period and/or any management fee
payment date, (ii) hold investments, or retain and not distribute proceeds longer, or (iii) postpone the
decision to permanently dimunitize the value of an investment, in each case than it otherwise would
have if the management fee were solely based on capital commitments in order to receive
performance-based compensation earlier and higher management fees or to help with fundraising.
The Adviser and its personnel’s commitments to a Registrant Client should tend to reduce this
incentive.

Registrant may waive or reduce management fees and/or carried interest for Registrant’s employees
and a limited number of strategic partners and consultants who invest in certain of the Registrant
Clients.

In connection with the investments of the Registrant Clients, portfolio companies of the Registrant
Clients may pay to Wellspring various transaction fees (“Transaction Fees”) and reimbursements of
expenses incurred by Wellspring on behalf of the Registrant Clients and/or their portfolio companies.
Such fees are retained in full by Wellspring; however, an amount equal to 75-100% ofall Transaction
Fees (net of expenses) reduce the management fees, if any, otherwise payable by the applicable
Registrant Client. Transaction Fees generally include all advisory fees, break-up fees, commitment
fees, director’s fees, monitoring fees and similar fees, payments or compensation received by
Wellspring in connection with an investment or potential investment. These Transaction Fees are
usually, but not always, due prior to the time of an exit or sale of a Registrant Client investment.
Accordingly, Wellspring may receive Transaction Fees when a Registrant Clientdoes not ultimately
profit from an investment. Pursuant to the terms of the governing documents of certain Registrant
Clients, Wellspring may not charge Transaction Fees to the portfolio companies of such Registrant
Clients if there are no management fees available to be offset by suchTransaction Fees. However,
certain of such Transaction Fees may be taken to the extent that they are used to offset expenses
otherwise payable by or reimbursable by such Registrant Clients.

All costs and expenses related to the acquisition, carrying or disposition of investments including,
but not limited to private placement fees, sales commissions, appraisal fees, taxes, brokerage fees,
underwriting commissions and discounts, accounting, market data services (e.g., Capital IQ), legal,
investment banking, consulting, information services, professional fees, custodial, trustee, record
keeping, partnership reporting, taxes, insurance, telephone, travel (which may, on occasion, include
the use of non-commercial planes) and other such expenses are either paid by or reimbursed to
Registrant by the Registrant Clients or their portfolio companies. Such fees could include payment
to third parties for successfully sourcing deals and could be in the form of cash or equity in the

portfolio company, which may be dilutive to investors in the Registrant Clients. In addition, co-
investors may not agree to pay or otherwise bear fees, costs or expenses related to unconsummated
co-investments. In such event, such fees, costs and expenses will be considered operating expenses
of and be borne by the Registrant Clients, as further discussed below.

Expenses incurred by members of the respective advisory board (“Advisory Board”) of the Registrant
Clients in connection withattending Advisory Board meetings may be paid by (or reimbursed to
Registrant by) the RegistrantClients. From time to time, Registrant may also retain consulting firms
and advisors to conduct duediligence, provide industry analysis and consult on portfolio companies.
The related consulting expenses are borne by the Registrant Clients or their portfolio companies. A
detailed list of variousother expenses paid by the Registrant Clients is set forth in the applicable
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Types of Clients

Wellspring provides investment advisory services, directly and indirectly through Wellspring
Management V, to privately offered funds, that invest primarily inprivate equity or distressed credit
investments. Investors in the privately offered funds managed byWellspring may include high net
worth individuals and a variety of institutional investors (e.g. trusts, employee benefit plans,
endowments, foundations, corporations, governmental entities and other types of entities, including
private funds of funds). All investors are required to be “accreditedinvestors” (as defined in Regulation
D promulgated under the Securities Act of 1933) and “qualifiedpurchasers” (as defined in Section
2(a)(51)(A) of the Investment Company Act of 1940) or otherwise be permitted to invest under
applicable securities laws.

Agreements with Certain Investors. Certain investors in the Registrant Client have been granted and
in the future additional investors may be granted one or more of the following rights with respect to
their investments: (i) a reduced management fee and/or performance-based compensation and/or
operating expense; (ii) the right to receive improved fees, liquidity, information rights and other terms
received by other investors; (iii) the right to receive certain additional information with respect to
certain funds, including position-level portfolio information or events related to the Adviser; (iv) the
right to reserved capacity for a certain fund; (v) notification to the investor with respect to the
investor’s ownership percentage of a certain fund; (vi) limitation on the investor’s ownership
percentage of a certain fund below certain thresholds; (vii) notification to the investor with respect to
the ownership by benefit plan investors of a certain fund’s equity classes; (viii) certain limitations on
an investor’s confidentiality obligations under a certain fund’s organizational documents pursuant to
laws or regulations to which the investor is subject (such as the public information or “sunshine”
laws); and (ix) an acknowledgement that such investor is entitled to sovereign status under U.S.
federal, state or non-U.S. law.

In addition to the above, certain investors in the Registrant Clients have been granted one or more
additional rights with respect to their investments, including, but not limited to: (i) the right to opt out
of the requirement to fund capital calls or otherwise be excused from participating in certain
investments due to regulatory, tax or public policy or the investor’s internal considerations; (ii) the
right to designate one or more members of an investor advisory or oversight committee; (iii) rights
with respect to distributions in kind; (iv) rights with respect to transfers of interests; (v) the right to
receive information regarding the investment and/or disposition strategy of the relevant Fund; (vi) an
acknowledgement that such investors are interested in learning about potential co-investment
opportunities; (vii) the right to provide selected confidential information to certain other recipients,
(viii) the right to modifications to an investor’s subscription agreement, (ix) arrangements with respect
to waivers of certain obligations, and (x) agreements by a general partner (or similar governing body)
to refrain from exercising certain remedies or taking certain actions against an investor (including in
connection with a default by such investor).

Such rights can be, and have been, granted on the basis of (i) the size, nature, timing or other features
of the investor’s investment in, or commitment made to, a Fund, (ii) the type, category, nature,
specificity or other features of the investor, (iii) the involvement or participation in Fund’s, the
Adviser’s or the applicable general partner’s management or activities (whether past, present and/or
future; in each case only to the extent permitted under applicable laws), or (iv) any other criteria,
element or feature as may be determined from time to time by, and in the discretion of, the Adviser or
the applicable general partner, to extent that such is not inconsistent with applicable laws and
regulations.

Certain investors have been granted “most favored nation” rights (an “MFN”) in their side letter,
which will give such investors the right to review and/or elect the benefit of certain side letter rights
granted to other investors that have made the same or smaller commitments to the Registrant Clients.
However, certain provisions will not be subject to disclosure or election, in all cases in accordance
with the terms of the MFN. The Adviser will make certain decisions regarding how to implement the
MFN, including what information to redact when side letters are shared, whether an investment policy
or practice is unique to a limited partner (and therefore not disclosable or electable) and whether
certain affiliated, related or commonly advised investor commitments should be aggregated for
purposes of the MFN. Further, the terms agreed with certain investors, including investors that are
affiliated with or managed by the Adviser, will be carved out in accordance with the terms of the
MFN.

Certain investors may engage investment consultants to evaluate a potential investment by such
investors in a Registrant Client and/or monitor such investment on an ongoing basis. Such Registrant
Client could have an incentive to agree to provide additional information to such investment
consultants, offer fee breaks to clients advised by such investment consultant (including by
aggregating such investors for purposes of the MFN) or provide other benefits because such
investment consultants may refer additional investors to the Registrant Clients.

In certain circumstances, the Registrant may determine that it would be in the best interests of a
Registrant Client to provide an opportunity for underlying investors to obtain liquidity for all or a
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