Shoreline Equity Partners LLC

Fees and Compensation
The Adviser receives a management fee and carried interest in connection with its advisory services.
Shoreline or its affiliates receive additional compensation in connection with the management or
other services performed for Portfolio Companies which typically result in an offset to the
management fees in accordance with, and as described by, the Funds Governing Documents.

Management Fees

The Funds will pay Shoreline an annual management fee equal to a percentage of the aggregate
commitments of the Limited Partners, excluding Limited Partners who are affiliated members of
the General Partner, which shall be payable quarterly in advance beginning with the date of the
partnership commencement date as defined in the Governing Documents. Management fees are
typically reduced during the life of a Fund. The precise amount and manner and calculation of the
management fee for each Fund is established in a Fund’s governing documents. The management
fee and other fees and distributions described herein are generally subject to modification, waiver
or reduction by Shoreline in its sole discretion, both voluntarily and on a negotiated basis with
selected investors via side letter and other arrangements, which may not be disclosed to other
investors in the same Fund. The fee structures described herein may be modified from time to time.
Fees can differ from one Fund to another, as well as among investors in the same Fund.

The management fee is subject to reductions or offsets as described in the applicable Funds’
Governing Documents. Shoreline receives fees from Portfolio Companies subject to contractual
requirements such as, but not limited to, monitoring fees, transaction fees, director fees, financial
advisory fees, organization and financing fees, operational fees, commitment, break-up and topping
fees, divestment fees, termination fees, project fees, fees relating to the arrangement of acquisitions
or other financial restructuring, or divestments, investment banking fees, fees relating to credit
origination, loan syndication, loan serving and/or other types of management consulting and other
similar operational and financial matters and/or other fees and annual retains from, or with respect
to, the Portfolio Companies (such fees, “Portfolio Company Fees”). These Portfolio Company Fees
are often substantial and are typically paid in cash, in securities of the Portfolio Companies,
prospective Portfolio Companies or investment vehicles (or rights thereto) or otherwise. Although
Portfolio Company Fees are in addition to the management fees, Shoreline will reduce the amount
of management fees paid by the applicable Fund in connection with the receipt of such Portfolio
Company Fees in accordance with the Governing Documents of the applicable Fund. Under the
terms of the applicable Governing Documents, for purposes of calculating any management fee
offset, Portfolio Company Fees are net of out-of-pocket costs and expenses incurred by Shoreline
in connection with consummated or unconsummated transactions or in connection with generating
any such fees.

To the extent a Portfolio Company Fee relates to more than one Fund, the portion of the Portfolio
Company Fee allocable to capital invested by a Fund, co-investment vehicle, or third-party investor
that does not pay management fees or to capital committed by a Fund investor that does not pay
management fees will be retained by Shoreline and such amounts will not offset the management
fee.

With respect to certain Funds, the General Partner and/or the Adviser will be reimbursed for actual
expenses incurred in connection with paying for certain in-house services, including but not limited
to fund administration services (“Internalized Operations Resources”) (i) where the respective
Funds would have otherwise hired a third party to do so and (ii) the cost of which would otherwise
be a fund expense; provided that without the consent of the LP Advisory Committee such amounts
paid for or reimbursed by the Fund for Internalized Operational Resources and other costs and
expenses for related services that are provided by in-house personnel shall not exceed $250,000 per
year. Internalized Operations Resources may benefit the Fund, Related Funds and co-investors, and
the Adviser may have a conflict of interest in determining how to allocate the costs of such
Internalized Operations Resources, particularly where the Related Fund or co-investor does not
permit reimbursement of the Adviser for Internalized Operations Resources. The allocation of costs
and expenses related to Internalized Operations Resources between the Adviser, the Fund, any
Related Funds, any co-investors, and/or the Portfolio Companies of the Fund or portfolio companies
of a Related Fund requires judgments as to methodology that Management Company makes in good
faith but in its sole discretion. These allocation methodologies may include: requiring personnel to
periodically record and allocate their time with respect to the Funds, any co-investors, and/or the
Portfolio Companies of the Funds; Adviser approximating the portion of time a person has spent
with respect to the Funds, any co-investors, and/or the Portfolio Companies of the Funds; the
assessment of an overall dollar amount (for instance, based on a fixed fee or a percentage of a
proposed annual budget related to such services) that the Adviser believes represents a fair
recoupment of expenses and a fair rate for such services; and any other methodology determined by
the Adviser to be appropriate under the circumstances. Any methodology chosen by Management
Company involves inherent conflicts of interest and could result in a greater expense to the Limited
Partners (via a reduction in the management fee offset) and Portfolio Companies than would be the
case if such services were provided by third parties.

In addition, the Funds or a Portfolio Company expects to compensate certain individuals that are
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Types of Clients
As described above, Shoreline provides investment advisory services to private fund clients.
Investments in the Funds are only offered to investors who are “accredited investors” as defined in
Regulation D under the Securities Act, and “qualified purchasers” as defined in the Investment
Company Act. Investment advice is provided directly to the Funds (subject to the direction and
control of the General Partner of each such Fund, if applicable) and not individually to investors in
such Funds.

Investors in the Funds may include, among others, high net worth individuals, banks, thrift
institutions, pension and profit sharing plans, trusts, estates, charitable organizations, university
endowments, corporations, limited partnerships and limited liability companies or other entities.

The Funds have a minimum investment capital commitment amount of $5 million. However, the
General Partner reserves the right in its sole discretion to waive the minimum investment capital
commitment amount as set forth in the Governing Documents of each Fund.

Methods of Analysis, Investment Strategies and Risk of Loss
As described above, Shoreline seeks to generate risk-adjusted returns for its investors by making
control investments in U.S. lower middle market companies with enterprise values typically ranging
from $50 million to $250 million. The Adviser targets businesses primarily located or sourced in
the Southeast (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North
Carolina, South Carolina, Tennessee, Virginia, and West Virginia) as well as Texas, Maryland and
Washington D.C. Shoreline’s investment activities are generally focused on specialized

manufacturing, distribution, and business and industrial services, among other industries,
particularly where the investment team has historical experience and implements three sector-
agnostic investment strategies that includes investing in companies that (i) seek their first
institutional capital, (ii) are underinvested private equity-back companies, and/or (iii) possess an
attractive buy-and-build story.

The Adviser employs a robust and iterative investment process that requires new investment
decisions to be made by a unanimous vote of Investment Committee only after substantial due
diligence has been conducted. The investment team employs a hands-on approach and works closely
with management teams to implement necessary changes for transforming and growing their
businesses. Shoreline seeks to drive value through: (i) strategic planning; (ii) strengthening the
management team; (iii) implementing operational improvement initiatives; (iv) developing
measurable financial metrics; and (v) improving operational and reporting systems and will
continually evaluate the market dynamics and timing of potential exit opportunities.

Investors in the Funds are reminded to refer to the relevant Fund’s Governing Documents for
disclosure that specifically addresses the methods of analysis and investment strategies employed
by such Fund. The above information is intended to be a summary only.

All investing involves a high degree of risks, including the possibility of partial or total loss of
capital, that investors in the Funds should be prepared to bear. There can be no assurance that the
Funds will achieve its investment objectives or receive a return on its investments. The below risks
are intended to be a summary of potential material risks presented by the methods of analysis and
investment strategies pursued by Shoreline. Investors in the Funds should ultimately reference the
applicable Fund’s Governing Documents for additional detailed risks disclosure that specifically
address the risks of each Fund’s methods of analysis and investment strategies.

Financial Market Fluctuations

The Funds’ investment program is intended to extend over a period of years, during which the
business, economic, political, regulatory, and technology environment within which the Funds
operate may undergo substantial changes. There can be no assurance that such economic and market
conditions will be favorable in respect of both the investment and disposition activities of the Funds.
General fluctuations in the market prices of securities and economic conditions generally may
reduce the availability of attractive investment opportunities for the Funds and may affect the Funds’
ability to make investments and the value of the investments held by the Funds. Instability in the
securities markets and economic conditions generally (including a slow-down in economic growth
and/or changes in interest rates or foreign exchange rates) may also increase the risks inherent in
the Funds’ investments and could have a negative impact on the performance and/or valuation of
the Portfolio Companies. The Funds’ performance can be affected by deterioration in the capital
markets and by market events, such as the onset of the credit crisis in 2007 or the downgrading of
the credit rating of the United States in 2011, which, among other things, can impact the public market
comparable earnings multiples used to value privately held Portfolio Companies, investors’ risk-free
rate of return and the ability of Portfolio Companies to refinance debt securities (including their
ability to sell new securities in the public high-yield debt market or otherwise). To

the extent that such marketplace events occur, they may have an adverse impact on the availability
of credit to businesses generally and could lead to an overall weakening of the U.S. and global
economies. Such an economic downturn could adversely affect the financial resources of corporate
borrowers in which the Funds invested and result in the inability of such borrowers to make principal
and interest payments on outstanding debt when due. In the event of such default, the Funds may
suffer a partial or total loss of capital invested in such companies, which could, in turn have an
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