Paceline Equity Partners LLC

Item 5 – Fees and Compensation

Paceline 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 in fees and expenses 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.
Investors should refer to the Governing Documents of the applicable Fund for a complete
understanding of how Paceline 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

Paceline charges a management fee (the “Management Fee”) to the Funds. For Fund I and Fund II,
investors pay Management Fees of 2% per annum of the aggregate capital commitments calculated
based upon each non-affiliated investor’s committed capital during the investment period; thereafter
the Management Fee will be calculated at 2% based on invested capital in respect of investments that
have not been disposed of less the amount of permanent write downs, subject to other factors as
described in each Fund’s Governing Documents. 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 permanently written down. 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,
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. Where
there has been a partial disposition or permanent write-down of a Fund’s investment and the fair
market value of such investment following such event exceeds the total amount of such Fund’s
investment contributions relating to such investment, the Governing Documents do not require
Management Fees after the stepdown date to be reduced. In most circumstances, the post step-down

Management Fee base will include capitalized transaction-specific fees and expenses of unrealized
investments, including transaction specific fees charged by Paceline 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.

Payable quarterly in advance, Management Fees were negotiated with the Fund’s investors during the
fundraising period of the Fund and are not subject to negotiation thereafter. 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 investors. Generally, investors 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 investors.

The General Partners are permitted, in their sole discretion, to reduce or waive all or a portion of the
Management Fee. Management Fees differ from one Fund to another, as well as among investors in
the same Fund. Such differences can arise from the size of an investor’s commitment to a Fund,
provisions of side letter agreements or other negotiated terms. Management Fees are generally waived
for Paceline employees investing in a Fund (including employees investing thought a General Partner),
affiliates and their respective family members (although in each case, these investors generally pay
their pro rata share of certain Fund expenses). Similarly, investors in a Co-Investment Fund generally
pay a reduced or no Management Fee on the co-investment portion of their investment (although
such co-investors generally pay Management Fees on the main Fund portion of their investment, if
applicable, and pay their pro rata share of certain expenses as described more fully below).

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 Paceline in connection with the organization of such Fund that exceed
a limit as specified in such Fund’s Governing Documents; and (iii) certain supplemental fees and
compensation with respect to portfolio companies, including closing, commitment, break-up,
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Item 7 – Types of Clients

Paceline 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
(“Investment Company Act”). The Funds limit their respective investors 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 the Funds. 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 Paceline
and/or the Funds. The Funds typically require capital commitments from each investor of at least
$10 million, depending on the Fund, although the applicable Fund’s General Partner has, in its sole
discretion, accepted lesser amounts.

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

On occasion, Paceline offers co-investment opportunities for certain investors to invest alongside a
Fund in certain Fund portfolio companies. As referenced in Item 4 above, co-investments have been
structured either as (i) a separate Co-Investment Fund or (ii) a direct investment by certain investors
into a portfolio company or its holding or operating company. When structured as a Co-Investment
Fund, Paceline considers the investment to be a Fund client, identifies the Fund in its Form ADV
Part 1, Schedule D, Section 7.B.(1), obtains an audit for the Fund, reserves the option to assess a
Management Fee and Carried Interest on such Fund and includes the amount of assets of such Co-
Investment Fund in the Firm’s regulatory assets under management. In the case of direct co-
investments, Paceline does not consider the investment to be a Fund or a client, does not act as the
investment manager to the co-investment portion of the investment, does not charge Management
Fees or Carried Interest to the investment, does not have custody of the investment or include the
amount of assets of the co-investment in the Firm’s regulatory assets under management. In such
direct co-investment opportunities, Paceline will perform management, advisory and other services
for the portfolio companies in which these co-investors invest, generally at no cost to such co-
investors except portfolio company fees and expenses (which such fees and expenses are recorded at
the portfolio company).

Opportunities to participate in co-investment transactions arise when Paceline has the opportunity
for an investment in an existing or prospective portfolio company and Paceline 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)
Paceline 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 Paceline 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. Paceline’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 Paceline’s Fund(s) will be less than it would otherwise have been
without the inclusion of such co-investors.

Paceline 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 investors in the Funds are on
occasion invited to co-invest in a Fund’s portfolio companies, Paceline is authorized in its sole
discretion to offer any or all of a co-investment opportunity to investors that are not investors in the
Funds. Co-investment opportunities are made available to select Fund investors and third parties,
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