Garnet Credit Management LLC

Item 5 Fees and Compensation

   A. Advisory Fees and Compensation

Garnet generally receives Collateral Management Fees (as defined below) from its Clients. A Client also
typically reimburses the Firm and its affiliates for certain expenses and/or makes other payments to Garnet,
which will not reduce the Collateral Management Fees payable to Garnet. Additionally, consistent with the
governing documents of a Client, a Client typically bears certain out-of-pocket expenses incurred by Garnet
in connection with the services provided to its Client. Details about such fees and expenses are contained
in the governing documents of such Client. Further details about certain common fees and expenses are
set forth below.

As compensation for services rendered to its Clients, Garnet generally receives from each such Client a
collateral management fee that typically consists of (1) a base fee component (the “Senior Collateral
Management Fee”); (2) a subordinated fee component (the “Subordinated Collateral Management Fee”);
and (3) an incentive fee component (“Incentive Collateral Management Fee” and, collectively with the
Senior Collateral Management Fee and the Subordinated Collateral Management Fee, the “Collateral
Management Fees”). The Senior Collateral Management Fee and the Subordinated Collateral Management
Fee are calculated based on a percentage of the collateral principal amount with respect to such Client and
are payable quarterly in arrears by a Client, subject to the priority of payments as detailed in the governing
documents of each Client. Garnet is typically entitled to an Incentive Collateral Management Fee if certain
return thresholds have been reached by a Client. The Incentive Collateral Management Fee is calculated
as a percentage of proceeds that, if not distributed as an Incentive Collateral Management Fee, would
otherwise be distributed to certain holders of securities issued by the Client, subject to the priority of
payments as detailed in the governing documents of each Client. Garnet is permitted to direct that some
or all of the Collateral Management Fees be paid to an affiliate of the Firm or to one or more third parties or
other entities as set out in a Client’s governing documents. The precise amount of, and the manner and
calculation of, the Collateral Management Fees for each Client are agreed between Garnet and each Client
and are set forth in such Client’s governing documents. Collateral Management Fees may be reduced
during the life of a Client. The Collateral Management Fees and other fees and distributions described
herein are generally subject to modification, waiver, deferral, rebate, or reduction by Garnet in its sole
discretion, both voluntarily and on a negotiated basis with selected security holders via side letter and/or
other arrangements, which, to the extent permitted by applicable law, may not be disclosed to other
investors of the same Client. The fee structures described herein may be modified from time to time. Fees
may differ from one Client to another, as well as among investors and security holders of the same Client.

   B. Payment of Fees

Collateral Management Fees are paid to Garnet by each CLO Client on a quarterly basis in arrears as
described above, subject to the priority of payments set forth in the governing documents of the Client. Fees

payable to Garnet by other Clients may differ in structure, timing and amount and will be set forth in the
applicable governing documents.

   C. Other Fees and Expenses

CLOs, which are separate legal entities with unique capital structures, will bear directly, or indirectly by
reimbursing Garnet as described above, additional expenses other than Collateral Management Fees and
advisory, custodial and transaction fees. Each deal is unique which may incur other additional fees that
other deals may not. These fees and costs will typically include, but are not limited to: fees, costs and
expenses related to the purchase, holding and disposition of assets (to the extent not reimbursed); research
expenses, consultants, business process outsourcing or servicer fees; loan settlement fees, due diligence
related to the analysis, monitoring or valuation of investments, including transactions not consummated;
costs and expenses related to indebtedness incurred by a Client; taxes, fees or other governmental charges
levied against a Client; investment-related expenses; auditing and tax preparation expenses;
administration and trustee expenses; brokerage commissions or fees; professional fees; expenses related
to rating agencies and preparing reports to investors; reasonable travel expenses undertaken in connection
with Garnet and its employees performing their duties; fees and expenses of accountants and counsel;
costs of insurance; litigation and indemnity expenses; the cost of asset pricing and asset rating services,
compliance services, software, accounting, programming and data entry costs associated with Garnet’s
investment activities; costs of dissolving and winding up investment programs; and other extraordinary
expenses. In the case of each Client, a more detailed description of the expenses borne by the Client will
generally be included in such Client’s governing documents. In certain cases, as described in the
applicable governing documents, certain such expenses may be paid to Garnet or its affiliates based on the
extent of services provided by them to a Client (e.g., certain administrative and compliance expenses,
software-related expenses and overhead of Garnet or its affiliates). Certain of the expenses borne by a
Client may also be incurred by, or allocable to, other Clients or Garnet. Therefore, from time to time, Garnet
will be required to determine how certain costs and expenses are to be allocated among multiple Clients
and Garnet or both. This analytical process is inherently subjective, and Garnet may be viewed as biased in
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Item 7 Types of Clients

Garnet provides advisory services to CLOs and loan accumulation facilities for CLOs and in the future may
provide advisory services to other types of Clients, including SMAs, Commingled Accounts, and other types
of Funds. CLOs are securitized asset vehicles organized to be exempt from registering as investment
companies under the Investment Company Act of 1940 as described above in response to “Item 4 – Advisory
Business”. Investors in certain loan accumulation facilities and CLOs include Garnet affiliates. Other
investors and holders of CLO Securities may include sovereign wealth funds, banks, family offices,
endowments, pensions, and other institutional investors.

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, an investor in a CLO or a Fund 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.

Minimum investment amounts for CLOs are set forth in the governing documentation. Minimum amounts
for SMAs, Commingled Accounts and other Funds will be individually negotiated with Clients, with Garnet
deciding the appropriate minimum amount considering, among other things, the nature of the investment
strategy and investment objective. Accordingly, there is no set minimum amount for SMAs, Commingled
Accounts, or Funds, and such amounts could vary.