Ballyrock Investment Advisors LLC

5. Fees and Compensation

With respect to the CLOs it manages, Ballyrock’s fee typically includes (1) a “base fee” component (a
senior management fee); (2) a subordinated fee component; and (3) and an “incentive fee”
(performance) component. The “base fee” and subordinated fee are based on a percentage of assets
under management and are payable in arrears on each quarterly distribution date, subject to the priority
of payments established by each such CLO’s indenture. The “base fee” and subordinated fee are paid
quarterly out of the cash proceeds available for distribution to the CLO’s investors and at maturity or
redemption of the CLO, in each case, to the extent sufficient cash exists, in accordance with the priority
of payments in the applicable CLO’s indenture. The “incentive fee” component accrues over the life of
the CLO and is only payable to Ballyrock at such time as the CLO’s subordinated noteholders earn a
specified internal rate of return. Fees earned by, but not paid to Ballyrock will accrue interest at a
negotiated rate until such time as the fees can be paid to Ballyrock in accordance with the terms of the
applicable CLO’s indenture.

Any incentive or performance-based fees payable to Ballyrock by any fund or account will be charged
in accordance with Section 205 of the Investment Advisers Act of 1940 (the “Advisers Act”) and Rule
205-3 thereunder.

In general, Ballyrock will be responsible for all its ordinary expenses incurred in the performance of its
investment management duties in respect of each client including the ordinary expenses of any third
party retained by Ballyrock to assist in the performance of such duties. However, clients should also
expect to be responsible for the following non-exhaustive list of fees and expenses, in addition to the
management fees described above: (i) transactional expenses (such as brokerage commissions,
transfer fees, registration costs, taxes and other similar transaction-related expenses), (ii) legal,
custodial and accounting expenses in connection with the CLO or other investment vehicle, (iii) costs
and expenses related to any workout, restructuring, amendment, waiver, consent, recapitalization or
the defense of liability claims related to any underlying collateral obligation in the CLO, (iv) expenses of
unaffiliated third party vendors which are necessary to be incurred by Ballyrock to manage the vehicle
will typically be payable out of the assets of the CLO, (v) rating agency fees and expenses, (vi) out-of-
pocket travel costs and expenses related to the marketing of the CLO, (vii) the costs of forming and
maintaining the special purpose entity, (viii) certain technology software related to the monitoring of the
assets, modeling services, research and diligence, and (ix) all other costs related to the operation of
the CLO authorized in the related transaction documents.

7. Types of Clients

Ballyrock provides investment advice primarily to CLO issuers and clients investing in CLO-related
investments. The clients that Ballyrock advises are primarily securitized asset vehicles exempt from
registering as investment companies under the Investment Company Act of 1940. The size of each
CLO issuer that Ballyrock advises is determined at the outset of a transaction between Ballyrock and
other parties involved in the transaction, including underwriters, placement agents and investors.