SLS Management LLC

Item 5: Fees and Compensation
Compensation we receive from the Client is comprised of fees based on a percentage of assets
under management and/or performance-based amounts.

SLS’s investment management fee with respect to the Domestic Fund is based on a percentage of
assets under management and performance based amounts. Detailed information regarding the
fees charged to the Domestic Fund is provided in the Domestic Fund’s Confidential Placement
Memoranda and other governing documents as applicable. In general, we receive up to 2.0% (per
annum) of the aggregate fair market value of the Domestic Fund’s net assets. Asset based fees are
accrued and calculated monthly by an independent fund administrator based on the net assets of
the Domestic Fund (without deduction for any accrued but unpaid asset based fee) as of the last
day of each month during the quarter (adjusted for contributions and withdrawals made during the
month).

Performance-based compensation is generally equal to 17% of net realized and unrealized profits
of each year and is calculated by an independent fund administrator as of the end of each fiscal
year. Performance-based compensation will be paid to the affiliated general partner of the
Domestic Fund, SLS Capital, LLC. SLS Capital, LLC may waive all or a portion of the
performance-based allocation.

SLS debits the Domestic Fund’s custodian account quarterly in arrears for the management fee
and annually for the performance allocation fee. Should an investor withdraw from the Domestic
Fund at any time other than at the end of the fiscal period, the performance allocation fee shall be
deducted as though it were being made at the end of the fiscal year. The performance allocation
fee is subject to a “loss carry forward” provision which prohibits the deduction of the performance
allocation fee from any investor’s capital account until any net loss previously allocated to the
capital account has been offset by subsequent net profits.

Other Fees and Expenses

In addition to the fees described above, limited partners of the Domestic Fund (“Investors”) will
bear indirectly the fees and expenses charged to the Domestic Fund. These expenses include, but
are not limited to, legal, accounting, auditing and other professional fees, research expenses and
investment expenses such as commissions, interest on margin transactions, custodial fees, bank
service fees, registrar and transfer fees and other reasonable expenses related to the purchase, sale,

Form ADV Part 2A Brochure | SLS Management, LLC                            March 27, 2018

or transmittal of Client assets. Additional information regarding fees and other expenses
attributable to the Domestic Fund is addressed in the Domestic Fund’s Confidential Placement
Memoranda.

Item 7: Types of Clients

As discussed in Item 4, our Client is the Domestic Fund. We do not provide investment advice to
the underlying Investors in the Domestic Fund. The Investors in the Domestic Fund may include
a broad range of U.S. institutions and high net worth individuals. Institutional Investors may
include corporations, trusts, estates, charitable organizations, endowments, foundations, family
offices and others. We generally require that Investors meet certain minimum investment
thresholds and suitability requirements. For example, the Domestic Fund generally imposes a
minimum investment threshold of $2,000,000 although the general partner, SLS Capital, LLC, has
the discretion to accept less. Additionally, all U.S. persons investing in the Domestic Fund are
required to be “qualified purchasers” (as defined in the Investment Company Act of 1940, as
amended). The Investors in the Domestic Fund are required to make representations indicating
that they are acquiring their interests for their own account; that they have received access to all
information that they deem relevant to evaluate the merits and risks of the prospective investment;
and that they have the ability to bear the economic risk of an investment in the Domestic Fund.
Details concerning applicable Investor suitability requirements are included in the Domestic
Fund’s offering documents and subscription material which are furnished to all Investors.