Glendon Capital Management LP

Item 5 – Fees and Compensation; Expenses

Potential Fund investors and Separate Account clients should review the applicable
Governing Documents or Account Agreements in conjunction with this brochure for more
complete information about the fees and compensation payable and expenses reimbursable
to GCM. GCM does not currently have a fee schedule. Fees payable to GCM under its Separate
Account arrangements are generally subject to negotiation. Fees payable to GCM with
respect to its Funds may be waived or modified by GCM in its sole discretion with respect to
certain investors, as more fully disclosed in the applicable Fund’s Governing Documents.

The specific manner by which GCM will charge fees to a Fund or a Separate Account will be
established in the applicable Governing Documents or Account Agreements. Our fees will
generally consist of a management fee, which typically is calculated based on invested capital
and billed on a quarterly basis payable in advance, and performance-based compensation
that may take the form of a performance fee billed on an annual basis, an incentive allocation
or a carried interest distribution. Subject to the applicable Governing Documents or
Accounts Agreements, accounts initiated or terminated during a calendar quarter may be
charged a prorated fee. Upon termination of the relationship with any Separate Account
client or Fund investor, any prepaid, unearned fees will be promptly refunded, and any
earned, unpaid fees will be due and payable.

 As of the date of this brochure, GCM has commenced fundraising for its fourth private fund, Glendon
Opportunities Fund IV, L.P. (“G4”). Although G4 is not yet active, it will have a substantially similar
investment strategy to G1, G2 and G3.

GCM’s fees are exclusive of brokerage commissions, transaction fees and other related costs
and expenses, which shall be incurred and paid by the Client. Clients will incur and pay
certain charges imposed by custodians, brokers, fund administrators, and other third
parties, including, but not limited to, fees charged by managers, custodial fees, deferred sales
charges, odd‐lot differentials, transfer taxes, wire transfer and electronic fund fees, and other
fees and taxes on brokerage accounts and securities transactions. Such charges, fees and
commissions are exclusive of and in addition to GCM’s fees, and GCM shall not receive any
portion of these commissions, fees and charges. Additionally, GCM will charge its Clients for
other costs and expenses as set forth in the applicable Governing Documents or Account
Agreement, including, but not limited to, research expenses (including, but not limited to,
Bloomberg terminal access and general industry or sector research that may not be specific
to a particular investment), trading-related expenses (including, but not limited, expenses
associated with trade order management systems), investment-related attorneys’ fees and
expenses, auditor and tax advisory expenses, insurance premiums and related expenses,
broken deal expenses, and other investment-related advisory fees, including the use of
“expert network” consultants, and other due diligence related expenses (including, but not
limited to, GCM staff travel that is investment‐related).

The expenses referred to herein (and as more fully set forth in the applicable Governing
Documents and Account Agreements) will be charged regardless of whether an investment
is made and will be allocated on a fair and equitable basis where more than one GCM Client
invests or potentially would have invested. GCM generally will allocate investment-related
expenses pro rata based on each Client’s relative holdings of such investment(s) as of the
end of the quarter in which the expense was paid. GCM may adjust such allocation, however,
as it deems appropriate to account for disproportionate changes in the relative holdings
among the Clients. For expenses relating to a potential investment that has not been made
(including broken deals and general research in industries or sectors where an investment
has not yet been made), GCM generally will allocate such expenses pro rata based on each
Client’s expected participation in the potential investment(s). In addition, in some cases,
GCM will allocate expenses associated with industry or sector research expenses pro rata
based on each Client’s relative holdings of investments in such industry or sector. Item 12
further describes the factors that GCM considers in selecting broker‐dealers for client
transactions and determining the reasonableness of their compensation (i.e., commissions).

In addition to the fees and expenses described above, investors in Funds and Separate
Account clients will be subject to additional expenses associated with managing, operating
or servicing a Separate Account or Fund, as applicable. Potential Fund investors and Separate
Account clients should consult the relevant Governing Documents or Account Agreement for
a more complete discussion of the fees, expenses and other compensation arrangements to
which such Clients and investors will or may be subject.

Item 6 – Performance‐Based Compensation and Side‐By‐Side Management

GCM charges performance‐based compensation to the Funds and the Separate Accounts,
which may take the form of performance fees, incentive allocations or carried interest
distributions. Performance-based compensation is subject to individualized agreements

with each Client. GCM will structure any performance-based compensation to comply with
Section 205(a)(1) of the Advisers Act and Rule 205‐3 thereunder. Performance-based
compensation arrangements may create an incentive for GCM to recommend investments
that may be riskier or more speculative than those that would be recommended under a
different fee arrangement. Such performance-based compensation arrangements also create
an incentive to favor Clients that pay higher performance-based compensation over other
...

Item 7 – Types of Clients

As stated above, GCM provides portfolio management services to the Funds and the Separate
Accounts. GCM expects to provide portfolio management services to other private
investment funds in the future and, potentially, other separately managed account clients,
including, but not limited to, accounts for institutions such as banking organizations, foreign
investment companies, educational endowments, corporate pension and profit‐sharing
plans, Taft‐Hartley plans, charitable institutions, foundations, endowments, municipalities,
trust programs, sovereign funds, foreign funds, and other U.S. and international institutions.
GCM will also offer its services to registered investment companies, high net worth
individuals, and family offices. The minimum separately managed account size that GCM will
manage is typically $100,000,000.