Parliament Capital Management LLC

Item 5 − Fees and Compensation

  PHYF Residual Assets, LLC ("Residual Assets") holds the remaining assets of Parliament High Yield Fund, LLC
("PHYF"), a fund that has been liquidated and whose assets were distributed to its members. Residual Assets holds
certain investments that the Company expects to liquidate in the near future in connection with the wind-down of
PHYF.

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       The Company offers its services on a fee basis. Generally, the Company charges each Fund
a management fee based on such Fund’s assets. Management fees paid by a Fund are indirectly
borne by the investors in such Fund. The Company’s management fee schedule is as follows:

       (a) PCS II: generally, 2.00% per annum of the capital committed by each investor in the
           Fund and is payable quarterly in advance, however such fees may vary by series as set
           forth in the applicable Governing Documents based on factors including the size,
           operational costs, and complexity of the investment strategy of each series;

       (b) PCS III: generally, 1.00% per annum of the capital committed by each investor in the
           Fund or a fixed fee that is payable quarterly in advance, however such fees may vary,
           including being higher, by series as set forth in the applicable Governing Documents
           based on factors including the size, operational costs, and complexity of the investment
           strategy of each series;

       (c) PCO: (i) during PCO’s investment period, 2.00% per annum on capital commitments
           by an investor up to $5 million, 1.50% per annum on capital commitments by an
           investor between $5 million and $10 million, and 1.25% per annum on capital
           commitments by an investor exceeding $10 million; and thereafter (ii) 2.00% per
           annum, 1.50% per annum and 1.25% per annum, respectively, as provided in clause (i)
           above, of its invested capital.

       (d) PSGF: during the initial management fee period, the PSGF will pay in advance on a
           quarterly basis two percent (2%) per annum (five tenths of one percent (0.5%) per
           quarter) of its unreduced regulatory capital plus drawn Leverage. After the Initial
           management fee period, the fee for such fund will be equal to two percent (2%) of the
           aggregate cost of loans and investments as of the first day of the fiscal quarter in which
           the fee is paid or begins to accrue for all of the ongoing concerns in which the PSGF
           has invested and as to which it has not written off its investment, subject to Small
           Business Administration (“SBA”) review.

        With respect to Residual Assets, the Company doesn’t charge a management fee. Residual
Assets bears all of its organizational and operating expenses, including costs associated with the
acquisition, holding, servicing, and disposition of its assets, as well as expenses related to legal,
accounting, administrative, audit, valuation, compliance, and other service providers. Residual
Assets also bears expenses related to financing arrangements, insurance, taxes, and other ordinary
course operating costs. The Company is entitled to reimbursement for reasonable out-of-pocket
expenses incurred in connection with the management, operation, and administration of Residual
Assets, and may receive compensation for services provided to the fund, as determined by the
Company in accordance with the governing documents.

       The specific terms and fee structure are negotiated in advance and included in the
Investment Management Agreement executed by the Company and each Fund. The Company
reserves the right to waive or reduce fees based on specific circumstances, special arrangements,
pre-existing relationships or otherwise. In addition, with respect to a Fund organized as a series

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limited liability company, such as PCS II and PCS III, the specific terms and fee structure may
vary between each series of such Funds.

       The Company generally bills fees on a quarterly basis and is paid in advance. Any prepaid,
but unearned, management fees due to the termination of a Fund’s Investment Management
Agreement will be refunded to that Fund.

       The Company may deduct from each Fund’s account any management, advisory or other
expenses payable to the Company under the applicable Limited Liability Company Agreement or
Investment Management Agreement of a Fund.

         In the case of PCO, PSGF, PCS II and PCS III the Company and/or any of its managing
principals may receive advisory fees, success fees, break-up fees, commitment fees, due diligence
fees, structuring fees, directors’ fees or other fees from any portfolio company. However, in the
case of PCO, the management fee charged to any of its members will be reduced by 80% of such
member’s ratable share of PCO’s pro rata share of any such fees. In the case of PSGF, the
management fee charged to any of its members will be reduced by 100% of such member’s ratable
share of PSGF’s pro rata share of any such fees.

         In addition to management fees paid to the Company, the Funds may also incur certain
additional charges imposed by third parties such as custodians, auditors, banks and other financial
institutions. Additional charges may include accounting and audit fees, legal fees, and other fees
and expenses. Any such charges, fees and expenses are in addition to the Company’s fees.

       It is important that each investor who is considering an investment in a Fund review the
relevant Private Placement Memorandum, Limited Liability Company Agreement or Limited
Partnership Agreement, Separate Series Operating Agreement, Investment Management
...

Item 7 − Types of Clients

        The Company provides its advisory services solely to the Funds (not individually to the
members of each Fund nor to any other person). All investors in the Funds are “accredited
investors” and all investors in PSGF and PCO are also “qualified clients” (as such terms are defined
by the Securities and Exchange Commission under applicable rules). Each of PSGF and PCO had
a minimum investment commitment for each member. However, the managing member of each
such Fund, in its sole discretion, may permit investments that are less than the required minimum
investment commitment set forth in the applicable Fund documents.