Balbec Capital Management LP

Item 5 Fees and Compensation
Balbec receives a management fee and carried interest for providing investment services to the
Funds. In addition, Balbec typically receives an asset management fee for certain value-added
services performed by Balbec with respect to the day-to-day management of the Funds’ assets.

Generally, management fees for the Funds vary based on the aggregate commitment of the limited
partners and invested capital or net asset value of assets owned by the Fund. Asset management
fees vary based on the value of assets owned by a Fund and are calculated as either the lesser of
the gross asset value of the asset (calculated as GAAP gross assets plus off-balance sheet financing
from securitizations) or the net asset value of the Fund. The governing documents or investment

advisory agreement for each Fund discloses the management fees, asset management fees, and
carried interest to the investors or Clients prior to their commitment or investment. Management
fees will generally be payable quarterly in advance, (but may differ for certain Targeted Funds)
and asset management fees, where applicable, will generally be payable quarterly in advance.
Except as otherwise provided in a Fund’s governing documents, the management fee and asset
management fee will be funded by drawdowns of unfunded capital commitments of limited
partners or amounts withheld from proceeds otherwise distributable to limited partners of each
Fund.

Further, and in accordance with a Fund’s governing documents, when the Fund management fees
and asset-level fees are calculated based on the Fund’s net asset value and/or gross asset value, the
reinvestment of proceeds and/or use of leverage at both the Fund and asset level creates an inherent
conflict of interest. This practice may increase and/or extend the duration of such fees paid to
Balbec or its affiliates. Balbec reserves the right to retain certain amounts from disposition
proceeds to establish escrow, holdback, and reserve accounts, which amounts generally will not
accrue a preferred return and which Balbec may have incentives to hold for extended periods.
Similarly, where management fees or asset management fees are calculated based on gross asset
value or net asset value, the capitalization of expenses, costs, or other amounts into the cost basis
of a Fund’s investments, rather than charging such amounts as operating expenses at the asset or
entity level, has the effect of increasing the base on which such fees are calculated. Balbec and its
affiliates therefore have an incentive to capitalize such amounts into a transaction, not only to
avoid having portfolio entities pay such amounts out of available operating cash, but also to
increase the base on which future fees will be calculated. Consequently, Balbec may have an
incentive to reinvest proceeds rather than distribute them to investors in order to maximize the fees
payable to Balbec or its affiliates.

To the extent Balbec provides investment services (or sub-advisory services) to other clients,
including separately managed accounts, collateralized loan obligation issuers, private or publicly
traded REITs, and/or other vehicles, Balbec would be entitled to receive fees and other
compensation as agreed upon in the relevant agreements. These fees may include, but are not
limited to, management fees based on a percentage of assets under management, performance-
based fees contingent upon the achievement of specific performance benchmarks, and other fees
customary for such a relationship. The specific terms and conditions of all fee arrangements will
be detailed in the governing documents of each respective fund or account.

Balbec will not generally take acquisition, disposition, financing or advisory fees, and any such
fees received in respect of a Fund’s investments will be fully applied to offset the management
fee.

The investment advisory agreements with the Funds generally provide that they are terminable by
the Funds, subject, in some cases, to an applicable notice period or the occurrence of certain
conditions or events. Upon termination of a relevant advisory agreement, management fees that
had been prepaid are returned on a prorated basis.

Except as otherwise stated in a Fund’s governing documents, the Funds bear all legal and other
organizational and offering expenses incurred in the formation of the Funds. Any such expenses
in excess of an expense cap set forth in each Fund’s governing documents will generally reduce
the management fees otherwise borne by the limited partners.

The fees and expenses charged to each Fund are negotiated with the limited partners or Client
during each Fund’s formation, are detailed in the governing documents, and differ from Fund to
Fund. Fees and expenses which are either paid by or reimbursed to Balbec by the Funds will
generally include: the organizational and offering expenses inclusive of legal, travel, lodging,
meals, entertainment and ancillary expenses, accounting, filing, printing, capital raising, regulatory
compliance, any administrative or other filings (including any initial or preliminary registrations,
filings and other compliance contemplated by the Alternative Investment Fund Managers Directive
(AIFMD as implemented in each member state of the European Economic Area (“EEA”) and as
implemented and retained by the United Kingdom following its departure from the European
Union, the Swiss Collective Investment Schemes Act dated June 23, 2006 (as amended) and the
implementation thereof, the Swiss Financial Services Act 2018 (as amended) and the
implementation thereof or any similar rule, law or regulation)) and other organizational expenses
incurred in the formation of a Fund and its affiliated entities (including the general partner)
including the costs and expenses incurred for all side letter negotiations with limited partners and
will be borne by the Fund up to an expense cap. The general partner or an affiliate shall bear the
...

Item 7 Types of Clients
As noted in Item 4 above, Balbec’s Clients are primarily the Funds that it advises pursuant to
investment advisory agreements entered into between the Funds and Balbec. Investment advice is
provided directly to the Funds and not individually to the investors in the Funds. Investors in the
Funds include various institutional investors and high net-worth individuals. The institutions that
typically invest in the Funds include corporations, endowment funds, charitable organizations,
sovereign wealth funds, and other investment funds. Balbec also provides advisory services to
other Clients as described in Item 1, including pursuant to a non-discretionary investment
management agreement. In the future, Balbec may enter into new relationships with additional
Clients.

The minimum capital commitment for a limited partner of a Fund is outlined in each Fund’s
governing documents; however, Balbec maintains discretion to accept less than the minimum
investment threshold. In addition, the Funds enter into separate agreements, commonly referred to
as “side letters,” with certain investors that amend, modify, or supplement the terms of the
governing documents of the respective Fund. Under certain circumstances, these agreements could
give certain investors additional rights relative to other investors.