ITEM 5: FEES AND COMPENSATION
LCAM is entitled to receive a management fee in connection with the advisory,
administrative and monitoring services it performs for any CLO Issuer. However, LCAM has
historically waived such management fee for so long as it or any of its affiliates serves as collateral
manager to the CLO Issuer. LCAM is not entitled to a promote or performance fee. In addition,
LCAM and unaffiliated servicers are entitled to receive, retain, and share certain amounts paid by
mortgage loan borrowers, including, without limitation, in connection with loan servicing, loan
extensions, loan modifications, assumption, late fees, and liquidation/exit fees. LCAM or its
affiliates will seek reimbursement for services (including reimbursement for employee time and
travel and legal fees and costs to support loan servicing and modifications of a CLO Issuer’s assets)
from borrowers that would otherwise need to be performed by the servicer or a third-party. LCAM
or its affiliates shall be entitled to provide such services and receive reasonable compensation from
the borrowers. To the extent the borrower agrees to pay such compensation, that will be deemed
reasonable compensation. Historically, an affiliate of the Adviser served as advancing agent to the
CLO Issuers. The advancing agent is required to make, subject to a recoverability determination,
interest advances with respect to interest shortfalls on certain notes and servicing advance. In doing
so, the advancing agent will be entitled to advancing agent fees unless waived by the collateral
manager. The advancing agent is also entitled to interest payments on any interest and servicing
advances.
Consistent with Ladder Capital Group’s practices of originating loans with all or most of
its other investments, Ladder Capital Group received, and is expected to receive in the future,
compensation at the time of the origination of a loan, which are not related to any subsequent
decision by LCAM, as applicable, to offer a loan for inclusion into a CLO Issuer.
The expense reimbursements and other compensation payable to LCAM and its affiliates
as well as expenses incurred by the unaffiliated Trustee, Owner Trustee, Custodian, and Note
Administrators, will be described in a CLO Issuer’s Offering Memorandum and the Indenture
executed by a CLO Issuer and as defined therein.