OFS CLO Management II LLC

Item 5         Fees and Compensation

CLO Fees

Each CLO Management Agreement specifies the terms of OFS CLO Advisers’ compensation. To
the extent funds are available in accordance with the priority of payments set forth in the CLO
Indenture, the CLO Client will pay the applicable OFS CLO Adviser: (i) a senior management
fee and (ii) a subordinated management fee, in each case, based on a percentage (typically 0.15%)
of the par value of the underlying investments held by the CLO Client, and (iii) an incentive
management fee equal to a percentage (typically 20%) of the CLO’s net principal and interest
income after holders of the CLO’s residual interest notes have received a specified annualized
internal rate of return (typically 12%).

Subject to the specific terms of the applicable CLO Management Agreement, the OFS CLO
Adviser typically bills the relevant CLO Client directly for its fees, quarterly, in arrears. A CLO
Management Agreement initiated or terminated during a quarter may result in a prorated base and
subordinated management fee and incentive fee. OFS CLO Advisers expect that each CLO
Management Agreement will continue in effect until the earlier of the: (i) liquidation of all assets
in the relevant OFS CLO portfolio and the final distribution of the proceeds of such liquidation;
and (ii) termination of the relevant OFS CLO Adviser for cause (as defined in such CLO
Management Agreement). In addition, the CLO Management Agreements typically allow the OFS
CLO Adviser to resign upon specified, prior written notice to the related OFS CLO, the indenture
trustee, and the applicable rating agency. If a CLO Management Agreement is terminated for any
reason, or if the relevant OFS CLO Adviser resigns or is removed, the fees and expenses payable
by the OFS CLO to the OFS CLO Adviser, that have not yet been paid or reimbursed, shall be due
and payable following its termination, resignation, or removal.

Unless otherwise provided in a CLO Management Agreement, each OFS CLO Adviser is
responsible for all its ordinary expenses incurred in the performance of its obligations under the
CLO Management Agreement, including the fees and expenses of any third parties it employs to
perform such obligations. Any expense reimbursements will be payable only to the extent funds
are available therefor in accordance with and subject to the limitations contained in the CLO
Indenture.

Each OFS CLO is responsible for certain costs and expenses incurred by the relevant OFS CLO
Adviser on its behalf, as specified in the CLO Client’s Governing Documents, which will typically
include, among others, the following:

         (i)      costs and expenses incurred in connection with the establishment of the CLO
                  Client;

         (ii)     fees and expenses payable to rating agencies, consultants, legal counsel,
                  accountants, or other agents, experts, or professionals;

         (iii)    fees and expenses in connection with the acquisition, voting, or disposition of
                  investments (including (a) investment related travel, communications and related

               expenses and (b) amounts in connection with the termination, cancellation or
               abandonment of a potential acquisition or disposition of any portion of the collateral
               that is not consummated);

       (iv)    fees and expenses in connection with the carrying or management of investments
               (including costs and expenses for services and products (including information
               systems) relating to subscriptions and services from rating agencies and other
               service and research providers, portfolio management, communications with
               security holders, loan pricing and valuation, trade execution, loan administration
               and booking and compliance employed by the relevant OFS CLO Adviser);

       (v)     fees and expenses incurred in connection with the CLO Notes;

       (vi)    fees and expenses in connection with trade execution, taxes, governmental costs,
               transfer fees, insurance, and other similar costs;

       (vii)   any and all insurance premiums or expenses incurred by the relevant OFS CLO
               Adviser in connection with the activities of the CLO Client;

       (viii) any and all fees and expenses incurred by the relevant OFS CLO Adviser in
              connection with the establishment of any blocker subsidiary; and

       (ix)    expenses incurred to comply with any law or regulation related to the activities of
               the CLO Client and the relevant OFS CLO Adviser.

Such fees and expenses may, if permitted by the OFS CLO’s Governing Documents, include the
OFS CLO Adviser’s reasonable allocation of a portion of its overhead costs and expenses,
including employment compensation.

The CLO Client may incur certain charges imposed by custodians, trustees, brokers, and other
third parties, including 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. OFS CLO Advisers do not receive brokerage commissions or other
compensation attributable to the sale of securities or other investment products. For a detailed
discussion of the factors that OFS CLO Advisers consider, in selecting or recommending broker-
dealers for CLO Client transactions, and determining the reasonableness of commissions and
compensation for such broker-dealers, please see “Item 12 Brokerage Practices-Selection of
Broker-Dealers and Reasonableness of Compensation.”

Payment or reimbursement of operational costs and expenses to OFS CLO Advisers or their
affiliates, by OFS CLOs, creates conflicts of interest among OFS CLO Advisers, their affiliates
and their CLO Clients. To mitigate this conflict, operational costs and expenses billed to a CLO
...

Item 7    Types of Clients

The OFS CLO Advisors provide services to OFS CLOs and the Private Fund. Investors in such
Clients may include banks, insurance companies, and other institutions, as well as private funds,
sovereign wealth funds and government or private pension funds.

The CLO Notes are not registered under the Securities Act or any state securities laws and may
only be purchased (i) outside the United States by persons that are not U.S. persons in accordance
with Regulation S of the Securities Act or (ii) within the United States by “qualified institutional
buyers” pursuant to Rule 144A of the Securities Act. In addition, certain tranches of CLO Notes
are sold to “accredited investors” as defined in Rule 501(a) of Regulation D of the Securities Act.
Both qualified institutional buyers and accredited investors must also be “qualified purchasers” as
defined in the Investment Company Act.

Interests in the Private Fund Client must be sold only to investors who are an “accredited
investors,” as defined in Regulation D under the Securities Act, and “qualified purchasers,” as
defined in the Investment Company Act. Certain employees of the OFS Advisors, who qualify as
“knowledgeable employees,” in accordance with Rule 3c-5 under the Investment Company Act
may also be permitted to invest directly or indirectly in the Private Fund Clients.

The Private Fund Client’s minimum investment amount is noted in the Private Fund’s Governing
Documents. The minimum investment amount for any investor may be reduced or waived at the
discretion of the relevant General Partner.