BH Credit Management LLC

Item 5    Fees and Compensation

ADVISORY FEES AND EXPENSES

Each Client pays BHCM (or an affiliate) certain fees as compensation for advisory and other services
provided. Additionally, each Client bears certain expenses in connection with their operation. The actual
fees and expenses for each Client, including how they are calculated, can vary from Client to Client (and
fees and expenses for Funds can differ from those for CLOs). The particular fees paid, and expenses borne,
by a Client are described in the Client’s governing documents. The discussion herein is intended as a general
summary and is qualified in all respects by the governing CLO Documents as it relates to any particular
Client.

CLOs

CLO Collateral Management Fees. In most cases, BHCM, or a BHCM affiliate, will be entitled to receive
from a CLO: (i) a senior collateral management fee; and (ii) a subordinate collateral management fee (both
of which typically begin to accrue at closing and are paid quarterly in arrears). Certain CLOs will
additionally provide that if BHCM achieves a level of performance, as specified in the CLO Documents,
an incentive collateral management fee (collectively with the senior collateral management fee and the
subordinate collateral management fee, the “Collateral Management Fees”). Collateral Management Fees
are payable only to the extent that funds are available for that purpose, in accordance with the priority of
payments waterfall described in the relevant CLO Documents (the “CLO’s Waterfall”). The senior
collateral management fee occupies a higher priority in the CLO’s Waterfall than the subordinate collateral
management fee and, where present, the incentive collateral management fee. Where a CLO is subject to
an incentive collateral management fee, that fee would represent performance-based compensation and
would typically be only payable to the extent that: (i) funds are available in the CLO’s Waterfall for such
purpose on each payment date and (ii) certain specified returns hurdles are achieved, as described in the
applicable CLO Documents.

                                 BH C RED IT MANAGEM ENT LLC
                         2200 Ross Avenue, 31st | Dallas, TX 75201 | (214) 665-1900

CLO Warehouse Fees. In most cases, Warehouses pay customary management fees, structuring fees,
and/or “warehouse success fees” (collectively “Warehouse Fees”) to BHCM or an affiliate under the
Warehouse’s CLO Documents, as negotiated on a case-by-case basis. Warehouse Fees often include fees
similar to the Collateral Management Fees described above, as well as certain fees negotiated in connection
with a CLO payoff of a warehouse facility or upon the closing of a CLO, in each case as described in the
relevant CLO Documents.

Expenses. Management Fees charged to Funds, CLOs, and Warehouses are exclusive of various costs and
expenses that are incurred in connection with BHCM’s provision of advisory services. As described in more
detail below and in the relevant governing documents, the costs and expenses that will be borne by Clients
(and, indirectly, by their investors) include, but are not limited to: organizational, custodial, brokerage,
audit, line of credit, legal, risk management, consulting, third party administration, research-related fees,
transfer taxes, wire transfer, and electronic fund fees, and other fees, expenses, and taxes on brokerage
accounts maintained, and securities transactions effected, for the Client.

Direct and Indirect Expenses Incurred by CLOs. In addition to the fees paid to BHCM for its collateral
management services, and as set forth in the relevant CLO Documents, CLOs pay (and investors in the
CLO bear) a variety of other expenses related to the CLO’s operations. These expenses will be the
responsibility of the CLO and can be paid directly by the CLO or by BHCM or an affiliate for and on behalf
of the CLO (in which case, BHCM or the affiliate will be entitled to reimbursement from the CLO).
Examples of allocable direct expenses that could be borne by a CLO include, but are not limited to, the
following:
    •   All fees and out of pocket costs and expenses incurred by BHCM in connection with the formation
        of a CLO and its consummation including, without limitation, legal and other expenses (excluding
        travel) incurred in connection with the offer and sale of interests in the CLO (i.e., organizational
        expenses);
    •   Expenses associated with the operation of the CLO under the CLO Documents in connection with
        the management of the CLO’s Assets including expenses related to purchases and sales of Assets,
        workouts, research systems, and compliance monitoring (some of which can be shared expenses,
        as described below);
    •   Other operating expenses, including brokerage commissions and other charges for transactions in
        securities, other instruments, and investments;
    •   Escrow expenses;
    •   Borrowing charges on margin accounts, credit facility charges, and the costs of other indebtedness;
    •   Insurance costs;
    •   Governmental charges;
    •   Licensing costs;
    •   Audit fees;
    •   Valuation expenses;
    •   Financing and interest costs and expenses;
    •   Custodial fees and expenses;

                                   BH C RED IT MANAGEM ENT LLC
                           2200 Ross Avenue, 31st | Dallas, TX 75201 | (214) 665-1900

    •   Administrative fees and expenses;
    •   Reporting expenses;
    •   Taxes;
    •   Legal and accounting fees and other professional expenses such as consulting and investment
        banking fees;
    •   Expenses associated with mailing and reproducing offering documents, any amendments thereto,
        and other communications with investors;
    •   All expenses incurred in connection with any threatened, pending, or anticipated litigation,
        examination, or proceeding;
...

Item 7    Types of Clients

BHCM’s clients are CLOs and Funds.

Clients will generally be organized as Delaware limited partnerships or exempted limited partnerships
formed under the laws of the Cayman Islands, in each case excepted from the definition of an “investment
company” pursuant to Section 3(c)(7) of the Investment Company Act of 1940, as amended (the “1940
Act”), and the securities they issue be exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), pursuant to Regulation D and/or Regulation S thereunder, although other
exceptions could be relied on in certain circumstances.

It is expected that each Client’s investors will acquire interests in private placement transactions and will
be either (i) non-U.S. Persons acquiring through offshore transactions in reliance on Regulation S or (ii) (a)
in the case of CLOs, both “qualified institutional buyers” (as defined in Rule 144A under the Securities
Act) and “qualified purchasers” (as defined in Section 2(a)(51) of the 1940 Act), or (b) in the case of Funds
“qualified purchasers”. In certain cases, a Fund’s or CLO’s investors could include persons or entities that
are both “accredited investors” as defined in Section 501(a) of Regulation D under the Securities Act and
either qualified purchasers or “knowledgeable employees” within the meaning of Rule 3c-5 under the 1940
Act.

Additional details concerning applicable investor criteria will be provided in each Client’s governing
documents.