MSouth Equity Partners LLC

Item 5 - Fees and Compensation
MEP (through the MEP Affiliates) is entitled to receive management fees (“Management Fees”) for the
investment management and advisory services provided to the Funds. Co-investment entities generally
have not been charged a management fee. The principal terms related to the Management Fees payable by
the Funds are currently as follows:

    •   Management Fees are due and payable quarterly in advance (per the dates set forth in the relevant
        Fund Documents).
    •   Prior to the end of the relevant Fund’s investment period, Management Fees are 2% per annum of
        the aggregate amount of the capital commitments by the limited partners to the relevant Fund.
    •   After the investment period, Management Fees are 1.75% - 2%, as specified by the relevant Fund
        Documents, of the aggregate amount of the limited partners’ capital contributions in respect of
        investments that have not been realized (or the unrealized portion of any investment that has been
        partially realized).
    •   Transaction fees, consulting fees, directors’ fees, break-up fees and other similar fees from
        portfolio companies (or potential portfolio companies in the case of break-up fees) received by
        MEP or MEP Affiliates (“Other Fees”) will reduce the Management Fee by an amount specified in
        the relevant Fund Documents. The offset for the Funds is 100%.
    •   MEP may waive all or a portion of the Management Fee. In such case, limited partners will be
        required to make additional capital contributions in an amount up to the amount of any waived
        Management Fees, the required capital contributions from relevant MEP Affiliates will be reduced
        by a corresponding amount, and MEP will receive distributions and allocations of profits in
        connection with such contributions.

In addition to Management Fees, MEP Affiliates are also entitled to receive a carried interest or incentive
allocation from each Fund of up to 20% of cumulative net profits after satisfaction of an 8% hurdle return.
MEP’s entitlement to carried interest is subject to clawback provisions and other more detailed allocation
and distribution provisions set forth in the Fund Documents of each Fund.

Additional detailed information regarding the fees charged to the Funds is set forth in the Fund Documents
of each Fund. In addition to Management Fees and carried interest allocations, limited partners will
indirectly bear fees and expenses associated with acquiring or selling portfolio investments that are paid to
third parties, as well as direct fund-level fees and expenses. Fund-level fees and expenses will vary, but
typically include legal, consulting and accounting fees, taxes, bank fees, insurance premiums, dead deal
expenses, costs associated with the annual or other information meetings of the Partners (including the
costs of meals for MEP personnel in attendance), indemnifications and other expenses allowable under the
terms of the Fund Documents of the relevant Fund. The Funds have engaged third-party fund
administrators and as such, will incur the expenses associated with fund administration. Investors will also
bear the costs of certain expenses associated with ongoing compliance obligations such as e-mail retention
services. Certain the fund-level expenses such as insurance premiums for directors and officers liability,
employment practice liability, private equity firm professional liability, and identity fraud expense
reimbursement cover the activities of MEP and its professionals above and beyond what is required to
manage the Funds. Such insurance coverage is packaged in a bundle known as private equity fund liability
insurance. MEP is not able to obtain pricing for the coverages independently and believes that the bundled
pricing substantially lowers the cost of insurance coverage overall. Further, MEP has elected to allocate a
portion of this coverage to MEP itself. The allocation of these costs to the Funds, rather than to MEP,
results in a conflict of interest for MEP. Expense allocation practices differ for various investment advisers
and private fund complexes, and in some cases expenses that are the same or similar to those listed above
may be borne by a private fund complex’s investment adviser. The Funds do not reimburse MEP for other
general overhead costs. Investors should review all fees charged by MEP, any MEP Affiliates, and any
third parties to fully understand the total amount of fees to be paid directly or indirectly by the Funds.
When allocating expenses across the Funds, MEP will ensure that such expense allocation methodology is
fair and equitable. Generally, the expenses will be allocated on a pro rata basis based on the assets of the
relevant Funds or as otherwise deemed fair and equitable by MEP, which could include on a per-investor
basis or evenly split among Funds, depending on the specific expense.

In certain circumstances, as discussed below, MEP will provide co-investment opportunities. To the extent
that there are expenses associated with a proposed but unconsummated investment in which co-investments
were offered, and the co-investors or other third parties (if any) that were proposed to participate in such
investment alongside a Fund do not agree to pay (or otherwise fail to pay) all or any portion of such
expenses, all of such expenses are expected to be borne by the Fund that would have otherwise participated
in the investment.

Item 7 - Types of Clients
MEP provides investment management and advisory services to the Funds. Investment management
services and advice is provided directly to the Funds, subject to the direction and control of the MEP
Affiliate that serves as the relevant Fund’s general partner. Investment advice is not provided individually
to the limited partners of the Funds. The minimum capital commitment for the limited partners of the

Funds is $5,000,000, although MEP has the authority to deviate (and has deviated in the past) from these
minimum commitment requirements.

Investors are required to make certain representations when investing in a Fund. These representations
include, but are not limited to representations that (i) the investor has the capacity and authority to enter
into the relevant Fund Documents and has validly executed and delivered the relevant Fund Documents,
(ii) the investor is an “accredited investor” as such term is defined under Regulation D promulgated under
the Securities Act , (iii) the investor is a “qualified purchaser” as such term is defined under the Investment
Company Act, and that (iv) the investor will make, and has sufficient funds to make, capital contributions
in accordance with the relevant Fund Documents.

The Funds and/or MEP Affiliates have entered into separate agreements, commonly referred to as “side
letters,” with certain limited partners that have the effect of establishing rights under, or altering or
supplementing the terms of, the relevant Fund Documents in order to meet certain requirements of the
relevant limited partner. Side letters generally include, among other provisions, “most favored nation”
clauses; supplemental or modified reporting or disclosure rights; provisions addressing specified laws or
regulations applicable to the relevant limited partner; understandings regarding certain permitted transfers
of limited partner interests; acknowledgement of interest in co-investment opportunities; and membership
on the limited partner advisory boards of the Funds.