Item 5 Fees and Compensation
GLM will charge its Limited Partners (as defined below) (that are not employed by or affiliated
with GTAM), an incentive advisory fee in connection with the management of GLM. This advisory
fee will be computed based on Limited Partners first receiving the full return of their contributed
capital, then achieving a certain preferred return and thereafter GT GP LLC receiving a certain
negotiated incentive fee, to the extent applicable.
GLM offers separate tranches of interests (each such tranche, a "Tranche" and each such interest,
an "Interest"), in GLM to certain qualified investors, each of which, if admitted, will become a
limited partner of GLM (each, a "Limited Partner," and together with the General Partner, the
"Partners").
GLM has entered into a services agreement (the “GTAM Services Agreement”) with GTAM
through which, for a fee, GLM is able to utilize GTAM's sector research, capital markets,
structured products, trading, marketing and client services expertise as well as GTAM’s
administrative, operational and legal/compliance related services. (See Item 10 for more details
describing the "GTAM Services Agreement"). In addition, GLM has entered for a fee into an
advisory agreement with GTAM (the “Advisory Services Agreement”) whereby GLM provides
investment advice, on a non-discretionary basis, to GTAM in regard to CLOs managed by GTAM
and/or with respect to certain individual investments held in one or more GTAM managed
funds/accounts.
GoldenTree Loan Management ®
GLM receive fees in connection with the Advisory Services Agreement. With respect to the
sub-advisory services provided to GTAM under the Advisory Services Agreement, a separate fee
will be charged between GTAM and GLM in regard to the provision of such services. In addition,
GLM and GTAM have a potential conflict of interest in deciding how much time GLM and GTAM
personnel spend on GTAM CLO management (or with respect to certain individual investments
held in one or more GTAM managed funds/accounts) as opposed to on GLM. Both the GTAM
Services Agreement and the Advisory Services Agreement are intended to be agreed upon in an
arms-length negotiation but GLM and GTAM may be viewed as conflicted in setting these rates.
The fees received in the Advisory Service Agreement would first generally be used to offset any
monies owed to GTAM under the GTAM Service Agreement.
The terms and conditions in regard to expenses charged to GLM’s Limited Partners are noted
within its confidential private placement memorandum given to each of its Limited Partners.
The expense for the CLO clients is calculated and assessed at the beginning or end of each
quarter. To the extent GLM owns 100% of the equity tranche of a CLO, GLM expects to charge
no fees to the CLO. However, to the extent any portion of the equity of such managed CLO
is sold to an investor not affiliated with GLM, additional management fees may come into effect
and be charged with respect to that portion of the equity not held by GLM.
Payment of Fees
Depending upon the CLO Client and the authority granted to GLM, GLM may deduct its
fees/allocations from the CLO Client based on the terms of the investment management
agreement or offering documents. Generally, however, CLOs will be billed and will authorize
payment to GLM. For example, in the case of a CLO, payment is made through an independent
trustee signing-off on the payment.
Additional Fees and Expenses
Fees and expenses payable by GLM and by CLO Clients are detailed in the offering and disclosure
documents of GLM and the CLOs (as well as the GTAM funds/accounts that it sub-advises for)
and include, among other things, GLM's own expenses, and certain third-party expenses of the
CLOs. Please refer to those documents for important disclosures with respect to these
additional fees and expenses. A copy of these documents will be promptly delivered upon request
to any Limited Partner of GLM that requests these documents.
Prepayment of Fees
Please see responses above.
Additional Compensation and Conflicts of Interest
Neither GLM nor any of its supervised persons accepts compensation for the sale of securities
or other investment products.
GoldenTree Loan Management ®