Shorehill Capital LLC

FEES AND COMPENSATION

        In general, Shorehill Capital receives a Management Fee (as defined below) and a carried
interest in connection with the provision of advisory services to its clients. The General Partners or
other Shorehill Capital entities or affiliates receive additional compensation, including transactional
consulting compensation and monitoring fees, in connection with management and other services
performed for portfolio companies of the Funds and all or a portion of such additional compensation
will offset in whole or in part the Management Fees otherwise payable to Shorehill Capital to the
extent provided by the Governing Documents. Investors in a Fund also bear certain expenses.

Management Fees

        During its investment period, a Fund will pay its General Partner an annual management fee
(the “Management Fee”), payable quarterly in advance, equal to 2.0% of aggregate investor capital
commitments (“Commitments”) held by partners not designated as “affiliated partners” by the
relevant General Partner, as more fully described in the Governing Documents. Upon a date
specified in the Governing Documents (the “Stepdown Date”), the Management Fee, as applicable,
has been or will be reduced and equals or will equal 1.75 - 2.0% of (a) the aggregate investment
contributions, as reduced by (b) the aggregate amount of investment contributions with respect to
the portion of each investment that has been disposed of or completely written-off for U.S. federal
income tax purposes. As a general matter, the Management Fee will be payable during term
extensions unless otherwise agreed with investors.

        As is generally the case in private equity funds, the Governing Documents provide that a
Fund’s Management Fees will be calculated and charged on a basis that generally is not tied to the
Fund’s then-current net asset value. As further specified in the Governing Documents, from the
effective date of the relevant Fund until the Stepdown Date, Management Fees generally will be
charged based on a formula tied to the amount of the relevant Fund’s aggregate Commitments.
Further, after the Stepdown Date, Management Fees generally will be charged and calculated based
on a formula tied to the amount of investment contributions (including, where applicable, a Fund
borrowing component and the amount of any capitalized Portfolio Fees (as defined below) or
expenses) made by the relevant Fund relating to the Fund’s aggregate investment(s) in its portfolio
companies that have not been disposed of or completely written-off for U.S. federal income tax
purposes (such investments, “Impaired Value Investments”).

        Under the Governing Documents, where the fair market value of an investment exceeds the
total amount of investment contributions relating to such investment, post-Stepdown Date
Management Fees will not be calculated based upon such appreciated value, and will instead
continue to be calculated based on the amount of such investment contributions. Conversely, the
Governing Documents do not require Management Fees to be reduced or refunded following the
occurrence of a write-down, decrease (including a significant decrease) in fair value or other event
not constituting a complete realization, such as a partial sale or disposition, reorganization,
recapitalization (including recapitalizations involving dividends), roll-over investment in connection
with a sale or dividend distribution, except in the case of investments meeting the relevant Impaired
Value Investment standard under the Governing Documents.

        As a result, and as is generally the case for private equity funds, the amount of Management
Fees generally will not correspond with fluctuations in the net asset value of individual investments
or of a Fund, including following the relevant investment period, and will not be reduced in
connection with any write downs (whether temporary or permanent), except in the case of Impaired
Value Investments. 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 sales or dispositions,
distributions (e.g., those resulting from a dividend recapitalization) or reorganizations,
restructurings, roll-over investments, extraordinary dividends 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 the Fund’s investment or the Fund’s ownership percentage in
such investment has been reduced (including substantially reduced) as a result of such transaction.

        In many circumstances, the post-Stepdown Date Management Fee base will include
capitalized transaction-specific fees and expenses of unrealized investments, including certain fees
(such as Portfolio Fees) and expenses paid to third parties, Shorehill Capital or its affiliates. Further,
Management Fees generally will not be reimbursed or refunded under the Governing Documents in
the event of realizations, dispositions or partial write-downs or write-offs that occur partway through
the relevant calculation period.

        The Governing Documents set forth the full list of terms under which Management Fees will
be reduced, offset or otherwise be limited, and consequently investors should expect to bear the full
specified Management Fee rate in the Governing Documents until they are reduced in the
circumstances and on the date(s) specified therein.

        In accordance with the Governing Documents, after payment of any amounts necessary to
reimburse the relevant General Partner for all unreimbursed due diligence, legal and other third-
party costs and expenses incurred in connection with consummated or unconsummated transactions,
the Management Fee payable by a Fund for each year generally will be reduced by (i) in the case of
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TYPES OF CLIENTS

       Shorehill Capital provides investment advice solely to its Fund clients, and references
throughout this Brochure to “clients” and to Shorehill Capital’s related duties to and practices on
behalf of its clients and/or investors should be construed accordingly. The Funds generally include
investment partnerships or other investment entities formed under U.S. or non-U.S. laws and

operated as exempt investment pools under the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated thereunder. The investors participating in the Funds generally
include individuals, banks or thrift institutions, other investment entities, university endowments,
sovereign wealth funds, family offices, pension and profit-sharing plans, trusts, estates or charitable
organizations or other corporations or business entities and often include, directly or indirectly,
principals or other personnel of Shorehill Capital and its affiliates and members of their families, or
other service providers retained by Shorehill Capital or a Fund, as well as executives of portfolio
companies.

       Fund I generally has a minimum investment amount of $50,000 and Fund II generally has a
minimum investment amount of $500,000, and each Fund’s interests have typically been offered
and sold solely to accredited investors that are also qualified clients (or qualified knowledgeable
Shorehill Capital personnel). Shorehill Capital generally is permitted to waive such minimum
investment amount.

     METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

       Shorehill Capital seeks to focus its investment activity primarily on making control-equity
investments in manufacturing, industrial service, and distribution companies.

        Strategy & Process. The Shorehill Capital strategy and process is intended to identify
attractive investment opportunities in companies participating in the industrial sector that
manufacture engineered products, provide business-to-business industrial services or engage in
value-added distribution (“Target Sectors”), confirm key investment selection criteria, design and
implement investment management plans, position companies for exit, and achieve attractive
returns. These business practices have been developed and refined throughout the co-founders’
careers to increase investment selectivity and enable value creation through specific investment
management initiatives. Shorehill Capital believes that the depth of its approach is unique among
middle market private equity investment firms, representing the best way to complete attractive
investments and add value to portfolio companies while minimizing risk and generating attractive
returns.

        Proactive Investment Sourcing. Shorehill Capital believes that targeting companies with
enterprise values ranging from $20 million to $150 million (“Preferred Company Size”) within its
narrow focus in its Target Sectors will result in the most effective use of Shorehill Capital’s
investment experience. This experience supports proprietary research and proactive outreach to
target sector businesses and their owners. Typically, a variety of investment origination efforts are
implemented by Shorehill Capital to develop industry research and manage relationships with key
industry contacts including executives, intermediaries, and advisors.

        Investment Selection. Shorehill Capital will primarily consider platform investments in
companies operating in Target Sectors at the Preferred Company Size generally based or having
significant operations in North America. Shorehill Capital believes that the potential for value
creation at portfolio companies will result from four principal factors: earnings growth, repayment
of acquisition debt, increased cash-flow, and the achievement of multiple expansion. Shorehill
Capital typically considers each of these factors during due diligence and investment evaluation and
incorporates conclusions into detailed investment management plans.

        Company Dynamics. Shorehill Capital expects to evaluate various company dynamics to
determine the earnings growth and investment management potential of each prospective
investment. Shorehill Capital will typically seek to identify companies with differentiated profit
margins and demonstrated pricing power because these characteristics may be indicators of
sustainable market positions leading to long-term success. Shorehill Capital will seek to invest a
Fund’s capital in companies with multiple opportunities for growth, including the potential for
expansion of geographic markets served, expanded product and service offerings, market share
gains, and add-on acquisitions.

         Active Investment Management. Shorehill Capital believes that active investment
management using a company-specific resource plan can result in accelerated earnings growth,
better risk management, and superior investment performance.

        Human Capital. Human capital initiatives are expected to improve the overall quality and
effectiveness of management teams, leading to improved portfolio company performance. Shorehill
Capital intends to recruit talented executives to complement and strengthen the management team
and boards of directors at each portfolio company.

       Strategic Growth. Strategic growth initiatives are designed to increase the rate of a
company’s revenue and earnings growth. Shorehill Capital expects to work closely with
management teams and third-party advisors to direct initiatives designed to generate organic growth
from new product development, product line extensions, expansion of service offerings, domestic
market share gains, and international growth.

         Capital Markets and Exit. Shorehill Capital has established relationships with numerous
investment banks and other financial institutions and intermediaries that can be called upon to assist
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