CNL Strategic Capital Management LLC

Item 5 – Fees and Compensation

Pursuant to the Management Agreement executed between us and the Client, we will be paid a
Base Management Fee and a Total Return Incentive Fee. In accordance with the Sub-Management
Agreement executed between us and the Sub-Manager, the Sub-Manager will be entitled to 50%
of the Base Management Fee and the Total Return Incentive Fee earned by the Manager. In

addition to the fees listed above, we also entered into an Administrative Services Agreement with
the Client under which we will not receive a separate fee, but will be paid reimbursement of
expenses on a direct cost basis or the amount that would be paid for comparable services.

Base Management Fee. The base management fee will be calculated for each share class at an
annual rate of (i) for the non-founder shares, 2% of the product of (x) the average gross assets and
(y) the ratio of non-founder share Average Adjusted Capital for a particular class to total Average
Adjusted Capital and (ii) for the founder shares, 1% of the product of (x) the average gross assets
and (y) the ratio of outstanding founder share Average Adjusted Capital to total Average Adjusted
Capital, in each case excluding cash, and will be payable monthly in arrears. For purposes of this
calculation, "average gross assets" means the arithmetic average of the Gross Asset Value as of
the last day of (1) a calendar month and (2) the immediately preceding calendar month. "Gross
Asset Value" means, with respect to any date, the sum of the values of all of the Company’s assets
(excluding cash) as used in determining net asset value pursuant to the Company's valuation policy
as of such date. Average Adjusted Capital of an applicable class is computed on the daily Adjusted
Capital for such class for the actual number of days in such applicable month. The base
management fee may be reduced or deferred by us and the Sub-Manager under the Management
Agreement and the Expense Support and Conditional Reimbursement Agreement. The fact that
our base management fee for a certain month is calculated based on the average value of our
Client’s gross assets at the end of that month and the immediately preceding calendar month, which
would include any borrowings for investment purposes, may incentivize us to recommend that the
Client use leverage. We seek to mitigate this conflict ensuring that all the loan agreements
associated with Client borrowings (borrowings by Client businesses are not considered for this
purpose) approved by the Client’s board of directors, including a majority of the independent
directors.
Additionally, the Client has stated that it will not use leverage in excess of 35% of the Client’s
gross assets (for which calculation borrowings of Client businesses are not included) unless a
majority of the Client’s independent directors specifically approves any excess above such limit
and determines that such borrowing is in the best interests of our Client.
Transaction Fees. In connection with the services that the Sub-Manager or its affiliates may
provide to the businesses acquired by the Client, the Sub-Manager may be paid transaction fees in
connection with services customarily performed in connection with the management of such
businesses (except that no such transaction fees were charged on the acquisition of the initial
businesses). Transaction fees are subject to annual limitations based on the amount total Client
Assets. CSCM does not receive any portion of such transaction fees. On a quarterly basis, our
Client’s board of directors receives a report of all transaction fees charged to our Client’s
businesses by the Sub-Manager, including the reasonable details of services actually performed
for such fees. Prior to any transaction fee that individually or as a series of related expenses
exceeds $100,000 being charged to any of our Client’s businesses, the Sub-Manager shall obtain
the approval of a majority of our Client’s board of directors, including a majority of the Client’s
independent directors.
Expense Support and Conditional Reimbursement Agreement. CSCM and the Sub-Manager have
entered into an Expense Support and Conditional Reimbursement Agreement with the Client

pursuant to which we agree to reduce the payment of base management fees, total return incentive
fees and the reimbursement of reimbursable expenses due to us, to the extent that the Client’s
annual regular cash distributions exceed its annual net income. Subject to the terms of this
agreement, reimbursement of fees waived shall be made from excess operating funds, if any, at
the end of the calendar year. The Client’s obligation to reimburse fees waived shall terminate
three years following the date on which the expense support was provided to the Client.
Additional information regarding the Fees earned by CSCM is available in the Client’s prospectus
as amended and may be requested by contacting our Chief Compliance Officer.

Item 7 – Types of Clients

We intend to be Manager and Administrator to CNL Strategic Capital, LLC, who will be our sole
client. CNL Strategic Capital, LLC is a limited liability company, organized as a holding company
that primarily seeks to acquire controlling equity stakes and loan positions in durable, middle-
market companies through subsidiaries as operating companies. Our Client is currently raising
capital for operations through a public offering of securities registered with the Securities and
Exchange Commission and previously through private offerings exempt from registration.

We do not intend to have any other clients.