Gallatin Loan Management LLC

Item 5 Fees and Compensation

GLM charges management fees to CLOs based on the CLO’s total portfolio collateral.
Management fees may include both senior and subordinated fee components. GLM fees will
include: (i) a senior base collateral management fee, (ii) an additional subordinated
collateral management fee, and (iii) an incentive collateral management fee, described in
more detail in Item 6 below. All fees are negotiable.

The offering circular for each CLO will describe in detail all collateral management fees, rates,
payment terms, conditions, and termination provisions which may vary from transaction to
transaction. A CLO typically is issued at a discrete point in time, has a finite life, and after
issuance is then closed to further issuance of notes to new investors, unless there is an
agreed-upon refinancing or extension, in accordance with the terms of the governing
indenture.

A CLO’s management fees are calculated and approved for distribution by the trustee of each
CLO, typically on a quarterly basis. Fees are paid at the same time interest and principal
distributions are paid to note holders of the CLO. The payment process is governed by the
indenture of each CLO and may vary. All management fees are deducted from specific
expense-related accounts established at the commencement of the CLO transaction and
replenished on a quarterly basis.

CLOs, which are separate legal entities with unique capital structures, will bear additional
expenses other than advisory, custodial, and transaction fees. These fees will include
underwriting (though usually not a literal firm/guaranteed underwriting) fees typically paid
to an arranging investment bank for structuring and selling the various tranches of the CLO
to investors. The CLO will also incur separate legal fees, trustee fees, and various other fees,
such as security pricing services, portfolio record keeping, portfolio administration, and
rating agency fees. Each CLO is unique and may incur additional fees not included in other
transactions.

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 GLM                                                                              2017

For separately managed accounts, which must have a minimum account size of $10 million,
the annual management fee will be approximately 0.25-1.0%, based on each account’s
average net asset value (marked-to-market), including accrued income. The annual
management fee will be payable on a quarterly basis in arrears, meaning that the
management fee will be charged at the end of each quarter. The annual management fees
and minimum account requirements are negotiable. Accounts may be terminated at the next
quarter-end upon a 90-day written notice by either party. In addition to the management
fee, GLM may charge incentive fees in certain separately managed accounts in accordance
with the terms of each investment management agreement.

GLM does not electronically deduct fees from managed accounts and will bill Clients
pursuant to invoices sent to Clients on a quarterly basis in accordance with the terms of
investment management agreements. Clients may impose their own procedures related to
fee billings.

GLM Clients will have the right to terminate their investment management agreement
(subject to the provisions of the investment management agreement). Clients must notify
GLM in writing of their intention to terminate the account in accordance with the terms of
the investment management agreement. Since GLM will bill Clients’ management fees after
the end of each quarter, the management fees for a shorter period will be pro-rated and the
Client will not bear more than its pro-rated portion of management fees in the event a Client
terminates the investment management agreement during any given quarter.

GLM does not have the capability to custody assets on behalf of Clients. Therefore, GLM
separately managed account Clients will have to independently contract for custodian
services, which will result in additional fees.

Due to the over-the-counter nature of the high yield bank loan market (no organized
exchange), brokerage commissions are not transparent to the Principal Officers as Portfolio
Managers. Typically, broker-dealer firms provide ‘bid/ask’ quotes with the difference
between the two interpreted to be the implied commission. From time to time, there may be
additional fees charged by the executing broker that will be passed on to Clients. Please see
Item 12 of this brochure for additional information regarding brokerage.

GLM and the Principal Officers do not receive any additional compensation for the sale of
securities or other investment products, including asset-based sales charges or service fees
from the sale of mutual funds.

Item 7 Types of Clients

GLM provides services to Clients including CLOs, typically discrete special purpose vehicles
(“SPVs”), which make-up a meaningful part of the global structured finance
marketplace. Such SPVs maintain their own capital structures and generally consist of
noteholders and equity investors. CLOs are issued at discrete points in time and are typically
closed to new investors once a deal has been issued (subject to future refinancing or
extensions, in accordance with the governing indentures). Together, these investors form
the collateral pool to which GLM serves as the investment advisor. Therefore, GLM’s Client
is the SPV or CLO, not the underlying noteholders and/or equity investors within these
structures.

The Principal Officers actively manage the CLOs in order to pay interest and principal, and
regularly report to the underlying investors as to the timely performance of the aggregate
portfolios. It is important to note that each SPV or CLO has a finite life and has certain time
frames during which a manager can actively manage a portfolio. It has been our experience
that banks and thrift institutions, insurance companies, family offices, endowments,
specialty finance companies, various limited liability companies, and hedge funds are the
main underlying CLO note and equity holders.

GLM Clients may also include institutions and other investors through a separate managed
account structure. GLM currently requires $10 million to establish a separately managed
account, which amount is negotiable. GLM does not provide custodial services or
arrangements and will require each Client engage directly with a custodian.

GLM and its investment advisory affiliates have established two marketing channels
targeting institutional investors. One channel, the structured finance marketplace, which
entails managing the investment portfolio of CLOs and the other channel geared towards
institutional clients, such as domestic public and private pension funds, endowment and
foundation funds, high net worth and insurance separate accounts, along with sovereign

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 GLM                                                                               2017

wealth funds and investment consulting firms, which also serve the institutional client
marketplace. GLM and its investment advisory affiliates may also seek to market their
services as a sub-advisor to various pooled investment strategies targeting institutional
investors, such as sponsored commingled vehicles and/or mutual funds.