Levine Leichtman Strategic Capital LLC

ITEM 5         FEES AND COMPENSATION

       In general, LLSC receives management fees and a total return incentive fee in connection
with the provision of advisory services to its clients. LLSC or its affiliates also will charge

businesses owned by the Client transaction fees in connection with management and other services
performed for portfolio companies of the Client, subject to certain limits and/or payment
obligations to the Client. Certain expenses of LLSC will also be reimbursed. The specifics of the
fee arrangement are fully described in the Sub-Management Agreement.

Management Fees

        LLSC receives a base management fee (the “Management Fee”) equal to a percentage of
the Client’s average gross assets, payable monthly in arrears. The percentage is based upon the
Client’s relative average adjusted capital attributable to “founder shares” versus “non-founder
shares,” and ranges from 0.5% to 1% on an annual basis. Average gross assets is calculated on a
monthly basis in accordance with the Client’s valuation policy, excludes cash, and reflects changes
in fair market value of assets (including both realized and unrealized capital appreciation).

       Other Management Fee Information

        In the course of performing its sub-management services, LLSC expects to charge the
Client’s businesses transaction fees including, without limitation, investment banking fees,
financing fees, capital fees, arrangement fees, structuring fees, acquisition advisory fees,
disposition fees, liquidation fees, break-up fees and other similar fees in connection with services
customarily performed in connection with the management of the Client’s businesses
(“Transaction Fees”). LLSC will pay to the Client all Transaction Fees per year that exceed the
applicable amount specified in the Sub-Management Agreement. All Material Transaction Fees
(as defined in the Sub-Management Agreement) shall be subject to the approval of the Client’s
board of directors, including a majority of the independent directors.

        If Transaction Fees are paid by a portfolio company in which there are co-investors (which
could include co-investment vehicles managed by the Firm, service providers (including suppliers,
vendors, consultants, lenders, law firms (including Client or transaction counsel), transaction
service providers and their respective affiliates, personnel and related investment vehicles
(together, “Service Providers”)), third parties, current or former portfolio company management
or personnel, sellers or members of management that have rolled their interest or reinvested
proceeds in the portfolio company and/or other owners), a portion of such fees will in certain cases
be deemed to be on the account of such co-investors, and the portion of such fees related to co-
investors will not potentially be subject to payment to either CSCM or the Client. Depending upon
the Firm’s arrangements with such other investors, a portion or all of such fees would be retained
by the Firm. The Firm generally has discretion over whether to charge Transaction Fees to
portfolio companies, and if so, the rate, timing, method and/or amount of such compensation, as
well as where such amounts are charged in a portfolio investment’s holding or operating structure.

Total Return Incentive Fee

        LLSC also receives a total return incentive fee (the “Incentive Fee”) based on the total
return to shareholders of the Client (which is based upon the change in net asset value of the
applicable share class from the highest prior year end net asset value of such share class (subject
to certain adjustments for distributions) plus the total distributions to the applicable share class) in
any calendar year, payable annually in arrears. The share of the total return to shareholders to be

paid to LLSC varies depending upon the share class, and ranges between 5% and 10%. No total
return incentive fee will be paid on a share class unless a specified preferred return hurdle is met
(but LLSC is entitled to “catch up” payments after the hurdle is met, as further described in the
Memorandum and the Client’s management and sub-management agreement).

Other Information

        The Client is expected to generally invest on a long-term basis. Accordingly, investment
advisory and other fees are expected to be paid over the Client’s life (which may be perpetual).
Investors generally are not permitted to withdraw or redeem interests in the Client, though the
Client has adopted a share repurchase program that allows investors to sell back some or all of
their shares in the Client, subject to numerous limitations, conditions and restrictions as specified
in the Client’s offering materials.

       Principals or other current or former personnel of LLSC generally receive salaries and other
compensation derived from, and in certain cases including a portion of, the Management Fee,
Incentive Fee or other compensation received by LLSC or its affiliates.

        The Client will also directly or indirectly bear certain expenses of LLSC. As set forth in
the Sub-Management Agreement, LLSC shall be reimbursed for all third party out-of-pocket
expenses incurred by LLSC at the request of or on behalf of CSCM or the Client, including without
limitation, all fees, costs, expenses, liabilities and obligations relating to the Client’s activities,
acquisitions, dispositions, financings and business (to the extent not borne or reimbursed by a
subsidiary of the Client or a potential acquisition target), including:

               (i)    fees payable to third parties relating to or associated with due diligence,
       investment banking fees, professional fees, legal fees, fees associated with organizing,
       acquiring, consummating, financing, refinancing, restructuring, hedging, taking public or
       private the Client’s assets or the Client itself, including the fees and expenses associated
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ITEM 7         TYPES OF CLIENTS

       LLSC provides investment advice to the Client and CSCM. The Client is organized as a
holding company that primarily seeks to acquire controlling equity stakes and loan positions in

durable and growing middle-market companies. CSCM is the administrator and manager of the
Client, and is a registered investment adviser.