The Catalyst Capital Group Inc

Item 5 – Fees and Compensation

       A.      Compensation

Compensation to Catalyst for investment advisory services is based on the percentage of assets
managed by the Firm on behalf of a client and by receiving performance-based compensation.
Compensation to the Firm for services provided to the Fund takes the form of management fees
and carried interest. The Firm uses an “European carried interest” structure, which means that
the Firm’s compensation is tied to the performance delivered to limited partners (not deal-by-
deal or fund-by-fund). To further ensure the proper alignment of interests, Catalyst has instituted
a unique compensation structure that rewards both overall performance and deal-specific
contribution. In addition, Catalyst has developed a number of rigorous internal controls:

   •   The Firm’s profit participation is not distributed until investors receive 100% of their
       invested capital plus the Preferred Return (“European carried interest” structure);
   •   100% of any income earned by the Firm (or any member thereof) directly or indirectly as
       a result of managing Catalyst Funds goes to that respective fund, not the Firm; and

   •   Each team member’s equity in the Firm is designed to cliff vest over time to encourage a
       long-term commitment, and additional equity is matched to the introduction of new
       funds.

Subject to internal approval and dependent upon time commitments required, no Catalyst
professional may sit on a board of directors of a for-profit entity other than that of a portfolio
company and only one non-profit board.

       B.      Payment of Fees

Management fees paid by a Fund are based on the committed capital of the Fund (during the
investment period) and based on the net asset value (plus commitments) after the investment
period (but never more than the committed capital) and paid quarterly in advance. Incentive fees
paid by a Fund are payable later in the Fund’s life after investors have received a specified
preferred return. Management fees and incentive fees paid by future Catalyst clients will be
tailored for each such client.

The specific manner in which Catalyst or its related entities charges fees is established and
described in greater detail in the Governing Documents of each Fund. Fund investors should
refer to these Governing Documents for a complete understanding of how Catalyst is
compensated for its advisory services. The information contained herein is a summary only and
is qualified in its entirety by such documents.

       C.      Additional Expenses

The expenses paid by Catalyst’s clients are set forth in detail in the Governing Documents of
each relevant Fund. Fund investors and prospective Fund investors should therefore review the
applicable advisory agreement or Governing Documents carefully because such documents, and
not the summary in this brochure, describe more specifically the expenses such investor will
bear. As a general matter and in addition to the management fee, a Fund will pay, or reimburse
the General Partner for, all other fees, costs, expenses, liabilities and obligations relating to the
Fund’s activities, business, portfolio companies or actual or potential investments, to the extent
not borne or reimbursed by a portfolio company, all as more fully described in the Governing
Documents.

A description of the brokerage and other transaction costs (if any) that are expected to be borne
by Firm clients is in Item 12 of this brochure.

Item 7 – Types of Clients

Catalyst currently provides portfolio management services to its private fund clients, the Funds.
The Funds limits respective investors to investors who are “accredited investors” as defined
under Regulation D of the Securities Act of 1933. With respect to each Fund, minimum
subscription or investment amounts are disclosed in the Fund’s Governing Documents.