Strategic Income Management LLC

Item 5 – Fees and Compensation

SiM charges annual management fees that are computed and paid in arrears, monthly or quarterly,
based upon the average account value for the prior period. SiM’s fee rates vary on a portfolio-by-
portfolio basis depending on the size and type of the account and whether SiM is the sole manager or if
SiM is one of a group of managers for an account. Fees are negotiated with each client based on the
account's characteristics and can range from 20 bps to 60 bps.
Pursuant to an individual agreement with each Client, SiM manages such Client’s assets in accordance
with the account’s investment objectives and policies. Each agreement and its fees are individually
negotiated. The investment advisory agreement with the Registered Fund is subject to annual renewal
by the Registered Fund’s board of trustees in accordance with the requirements under the Company
Act. For more information concerning the investment advisory fees for the Registered Fund, please
consult the Registered Fund’s prospectus and statement of additional information (“SAI”) on file with
the Securities and Exchange Commission.

In addition to the advisory fees described above, each Client pays its own brokerage fees,
administration, custodian, and other charges and or expenses (together with any value added, goods
and services, sales or other tax applicable) or reimburses SiM for such expenses it incurs on the Client’s
behalf. Item 12 further describes the factors that SiM considers in selecting or recommending broker-
dealers for client transactions and determining the reasonableness of their compensation (e.g.,
commissions).

Clients generally do not pay fees in advance. However, if a particular Client and SiM adopt a fee
arrangement that calls for payment of fees in advance, upon redemption or termination of the advisory
relationship or upon investment other than at the beginning of the normal investment cycle, SiM will
refund fees for the period of time that SiM did not provide advisory services and/or charge that Client
only for the actual period of time that SiM provided advisory services.

SiM can waive or reduce fees charged to any client at its discretion. However, SiM does not have the
ability or authority to increase fees that clients agree to pay to SiM absent a written agreement signed
by both parties.

SiM may invest or recommend investments in mutual funds or exchange-traded funds, including funds

that SiM manages. Clients investing in mutual funds or exchange-traded funds will also bear indirectly
as fund shareholders their proportionate share of the fund’s internal expenses, which include
management fees paid to the fund’s adviser. These internal fees and charges are known as the fund’s
expense ratio. Each fund’s expense ratio will vary over time and is disclosed in its prospectus. SiM
does not receive sales charges from mutual funds or exchange-traded funds as a result of
recommending such securities. To the extent SiM invests client accounts in a sub-advised mutual
fund, it will not charge its advisory fee on the amount invested to avoid duplicating the fund's advisory
fee.

Some mutual funds use several different managers to manage different strategies within the same fund.
Institutional separate account fees, including those applicable to multi-manager mutual funds, are
negotiated directly with each account holder or fund manager and vary depending on the account size
and strategy pursued.

Item 7 – Types of Clients

SiM currently provides high yield fixed income portfolio management services, as subadviser, to the
Registered Fund and the EU Funds, and to the Separate Accounts as a separate account manager. In the
future, SiM may also provide portfolio management services to corporate pension and profit- sharing
plans, Taft-Hartley plans, charitable institutions, endowments, municipalities, and other U.S.and
international institutions.

The minimum account size for institutional high yield clients is $15 million. The minimums may be
waived or reduced by SiM in its sole discretion.