Item 5 – Fees and Compensation
As compensation for the performance of its obligations as the collateral manager of the Issuers,
the Adviser generally receives from the Issuer a Senior Collateral Management Fee, a
Subordinated Collateral Management Fee and an Incentive Collateral Management Fee
(collectively, the “Collateral Management Fees”).
The "Senior Collateral Management Fee" is generally 0.15-0.20% per annum of the aggregate
principal amount of the Issuer’s collateral portfolio. The "Subordinated Collateral Management
Fee" is generally 0.02 -0.30% per annum of the aggregate principal amount of
the collateral portfolio. The “Incentive Collateral Management Fee” is payable by only a certain
class of Issuer securities and is generally 0.25-50% applicable to a calculation of returns specific to
that Issuer and its securities, and in some cases, is subject to a hurdle rate of at least 12.0%. A
hurdle rate requires that the holders of such securities receive a return in excess of a specified rate
of return before the Adviser receives its Incentive Collateral Management Fee compensation.
All Collateral Management Fees are billed and payable according to the priority of payments
described in the offering circular and indenture of an Issuer. The Adviser may, in its sole
discretion, waive or delay all or part of such fees. Generally, the Issuers (and, indirectly, the
investors therein) bear all expenses as defined in the offering circulars and indenture of an Issuer,
including (i) legal, filing, auditing, consulting, administration, accounting and other professional
fees and expenses; (ii) expenses associated with periodic reporting; (iii) expenses associated with
financial statements and tax returns; (iv) insurance, interest and other expenses incurred in
respect of borrowings, if any; (v) other expenses associated with the acquisition, holding,
monitoring, settlement and disposition of an Issuer’s investments(including, without limitation,
any brokerage, transaction, custody or hedging costs); (vi) the costs and expenses of any
custodians, lenders, investment banks and other financing sources; (vii) any indemnity expenses;
(viii) the costs and expenses of any litigation involving an Issuer or its investments; and (ix)
certain compliance related costs and expenses. For a more complete discussion of Issuer fees,
compensation and other expenses, please refer to the offering circulars and indenture for each
Issuer and Item 12 – Brokerage Practices.