Jefferies Credit Management LLC

Item 5 FEES AND COMPENSATION

A.     Advisory Fees and Compensation

             The Investment Adviser may charge carried interest, incentive fees,
performance compensation, management fees, advisory fees and other fees to its Advisory

Clients. Advisory Clients should review the governing documents of the respective BDC,
Issuer or Private Fund for complete information on all fees and compensation. With respect
to any Advisory Clients of the Firm in which all investors are “qualified purchasers” as
defined in Section 2(a)(51) of the Investment Company Act of 1940, as amended (the
“Investment Company Act”), information regarding the fees and compensation payable by
such investors is not required to be provided herein. In certain circumstances, the advisory
fees payable to the Firm by separate account or Private Fund investors may be negotiable.
The fees as set forth in the Collateral Management Agreements are non-negotiable.

              With respect to fund of ones and separate accounts, as such accounts are
structured for a single investor or a group of investors, the fees and compensation to be
received by the Adviser may contain more customized calculations than those for Issuers
or Private Funds. The calculation method for the services provided to separate accounts
and Private Funds are disclosed in the applicable governing documents.

B.     Payment of Fees; Timing of Payments; Termination

               For many of our Advisory Clients, we are authorized under the Private Fund’s
or separate account’s governing documents to charge and deduct advisory fees directly
from the assets of the applicable Private Fund or separate account, at the times and in the
amounts set forth in the governing documents. For funds of one and separate accounts,
our ability to deduct advisory fees may be negotiable.

              Base advisory fees for many of our Advisory Clients, including many of the
Private Funds, are payable in arrears, generally on a quarterly or semi-annual basis.
Because such advisory fees are payable in arrears, they are not paid until after services
have been rendered. With respect to certain Private Funds and other Advisory Clients, the
base advisory fees are payable in advance, generally on a quarterly basis. Please refer to
the applicable governing documents for complete information on the timing of advisory fee
payments.

              Advisory Clients have the right to terminate the advisory or investment
management agreements in accordance with the terms of such agreements. Our policy is
to repay advisory fees paid in advance in excess of the pro rata portion earned (based on
the number of days during the period) through the termination date.

              When applicable, with respect to Issuers, the management fees (and if
applicable, any incentive fees) are paid on a quarterly basis. Fees are determined by the
Trustee in conjunction with the other payments that are required to be made on each
payment date, based on the collections received by each Issuer during the quarterly period
preceding such payment date. Pursuant to each Issuer’s governing documents, such fees
and other payments are set forth in a report that is prepared by the Trustee, reviewed and
approved by the Firm and distributed to the noteholders prior to the applicable payment

date. Payment of fees is made by the Trustee on behalf of Issuers on the applicable
payment date. Fees with respect to Issuers are not otherwise invoiced.

              The payment method for fees, and calculation thereof, to be received by the
Firm in connection with services provided to Private Funds and separate accounts are
disclosed in the applicable governing documents.

C.    Transaction-Related Fees

              Jefferies Finance lead arranges and underwrites a variety of debt products
consisting of senior secured loans, revolving credit facilities, bridge backstop
commitments, asset-based loans and other leveraged loan products. The leveraged
finance business of Jefferies Finance will involve a mix of both committed and “best
efforts” broadly syndicated and private credit transactions. Jefferies Finance may also act
as administrative agent and/or collateral agent in connection with these credit facilities,
and may also act as a lender on a proprietary basis and earn fees and interest in such
capacity. Jefferies Finance and its affiliates may receive origination, commitment,
arrangement, documentation, structuring, facility, monitoring, amendment,
administrative agent, and other transaction-related fees from portfolio companies in
which one or more Advisory Clients invest (or are considering investing). Jefferies Finance
and its affiliates will also receive fees and interest with respect to the loans and
commitments that it invests on a propriety basis.

              The receipt of these fees creates conflicts of interest because it gives
Jefferies Finance and its affiliates an economic incentive to pursue or recommend
transactions that generate such compensation. However, these fees and interest are not
considered advisory compensation and are not management-fee offsets unless a client’s
governing documents expressly provide for an offset. The Investment Adviser believes
that serving in these roles provides more attractive investments to the Firm’s Advisory
Clients over time, even if any particular role (and the fees received in connection
therewith) could conflict with the short-term interests of any Advisory Clients on any
particular deal.

               In some cases, a portion of an asset (or commitment) is held by Jefferies
Finance on proprietary basis in anticipation of a subsequent transfer to an Advisory Client
or to a third party. When that portion is sold to third parties, Jefferies Finance may receive
a fee or profit. We have an incentive to find larger deals than our Advisory Clients would
ordinarily want to purchase to generate these transaction fees and profits. Further, these
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Item 7 TYPES OF CLIENTS

              As described in Item 4 above, JCM’s Advisory Clients include Business
Development Companies, Issuers and separate accounts. The terms and conditions of the
advisory arrangements with the particular type of BDC, Issuer or separate account vary
depending upon the type of services provided or the type of Private Fund, Issuer or separate
account, and these terms and conditions may vary among Advisory Clients.

              The minimum account size necessary to open and maintain a separate
account with the Firm varies by the type of Advisory Client and the relevant strategy.
Furthermore, while we generally do not impose an investment minimum on our Advisory
Clients, certain Advisory Clients, such as Private Funds, often impose investment
minimums for investors in such funds. These investment minimums, if any, can be found
in the applicable Advisory Clients’ documents. We reserve the right to reduce or waive any
investment minimums that are required of investors, depending on a variety of factors,
such as a particular Advisory Client’s circumstances or investment strategies.

              The Adviser may advise additional Advisory Clients in the future (including
additional Private Funds, separate accounts, and Business Development Companies).