Black Lake Investments LLC

Item 5: Fees and Compensation
Black Lake attempts to service a vast array of accounts with varying portfolio sizes (within the framework
of a minimum portfolio values as described in Item 7). In order to facilitate advisory services given this
high variability, Black Lake provides Client with fee flexibility. Towards this end, Black Lake provides a
flexible fee arrangement with a variable mix of fixed fees and performance fees. Pursuant to the applicable
advisory agreements (which may include sub-advisory agreements), Black Lake’s management fee (the
“Management Fee”) will vary between 0.5% and 1.50% of the assets under management; however, Client
may negotiate a fixed monthly fee which will vary based on portfolio size and types of services requested.
Asset based fees are calculated at an annual rate, and billed in arrears on a monthly basis. Fees may be
negotiated based on the size of the portfolio; services agreed upon and additional services rendered
whether through Black Lake or an affiliate. Black Lake’s management fee is typically applied to the
market value of the unhedged value of the portfolio under advisement. The initial fee is due following the
first month the agreement is executed. The initial fee will be prorated based on the opening date through
the last day of the full calendar month. Thereafter, the monthly fee is based on the account asset value on
the last day of the respective calendar month, or the agreed-upon flat fee. Termination of the contract will
not affect any liabilities or obligations of the parties from transactions initiated before termination of this
Agreement or a client’s obligation to pay advisory fees (pro-rated through end of the month in which
termination is effective).
In addition to Black Lake’s Management Fee, Black Lake will also generally be entitled to receive
incentive compensation with respect to investments in the Client’s portfolio (the “Black Lake Incentive
Fee”), which will vary between 5% and 25% of net gains, as more fully described in Item 6. For certain
Clients, Black Lake may also receive a one-time setup fee (the “Setup Fee”), and fees associated with
implementing the portfolio recommendations (the “Execution Fee”). The Management Fee, Black Lake
Incentive Fee, Setup Fee, and Execution Fee are negotiated in connection with, and may vary as outlined
within the applicable advisory agreement.
Client and/or Black Lake may initiate termination of advisory agreements at any time by sending written
notice to the contra party, and will be deemed accepted the day that the contra party receives it. No
termination fee will apply, but Clients will be expected to provide the Firm with a notice period in advance.
Upon written receipt of notice to terminate an advisory agreement, and unless specific transfer instructions

are received, Black Lake will cease advisory services. Should the Client provide specific instructions to
liquidate, Black Lake will proceed with liquidation of the Client’s account in an orderly and efficient
manner. There will not be a charge for such redemption. Clients must keep in mind that the decision to
liquidate their accounts may result in tax consequences that should be discussed with the Client’s tax
advisor.
As set forth in the applicable advisory agreement or governing documents, Clients may bear some or all
of the following costs and expenses:
(i)     All costs and expenses associated with the formation and capital raising activities of the Clients,
        if any, including, without limitation, the costs and expenses of the preparation of the Clients’
        registration statements, any and all costs and expenses of the initial public offering, any subsequent
        offerings and any filing fees and costs of being a public company, including, without limitation,
        filings with the U.S. Securities and Exchange Commission (“SEC”), the Financial Industry
        Regulatory Authority, Inc. (“FINRA”) and NYSE (or other exchange or over-the- counter market), among
        other such entities;
(ii)    All costs and expenses in connection with the acquisition, origination, disposition, securitization,
        development, modification, protection, maintenance, financing, refinancing, hedging, rating,
        administration and ownership of the Investments (including costs and expenses incurred for
        transactions that are not subsequently completed), including, without limitation, costs and
        expenses incurred in contracting with third parties to provide such services, including legal fees,
        accounting fees, rating agency fees, consulting fees, due diligence fees, loan servicing fees, trustee
        fees, appraisal fees, insurance premiums, commitment fees, brokerage fees, guaranty fees, ad
        valorem taxes, costs of diligence, foreclosure, maintenance repair, and improvement of property
        and premiums for insurance on property owned or leased by the Clients;
(iii)   All costs and expenses in connection with legal, accounting, due diligence (including due
        diligence, legal, and other costs for assets that are not subsequently acquired), salaries included
        with operating companies purchased as assets, financing, securitization, property management,
        brokerage, leasing, and other services that outside professionals or outside consultants perform or
        otherwise would perform on a Client’s behalf and, subject to the approval of certain Clients, that
        are performed by Black Lake;
(iv)    Costs and expenses incurred in connection with the issuance and transaction costs incident to the
        acquisition, disposition, financing, hedging, rating, and securitization of the Investments;
(v)     Costs of legal, tax, accounting, consulting, auditing, administrative, and other similar services
        rendered for the Clients by providers retained by Black Lake or, if provided by Black Lake’s
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Item 7: Types of Clients
The minimum initial account value for Black Lake is $8,000,000. Black Lake will advise banking
institutions investment companies, business development companies and other institutions. Black Lake
also provides advisory services to Clients for the development and implementation of an MSR or MSR
based token hedging framework, and ongoing hedge advisory.