Canyon Partners Real Estate LLC

Fees and Compensation
Clients are typically charged an asset based fee and/or an incentive based fee (commonly referred to as a
performance allocation or fee). The asset based fees are normally charged at an annual rate of between 1%
and 1.5% of the value of the Client’s net assets under management (or committed capital) and are generally
payable monthly or quarterly in arrears depending on the investment advisory agreement. The performance
allocation or fee generally equals between 15% to 20% per annum of the net profit in a Client’s account,
typically subject to a loss carryforward adjustment and a “high water mark”, and is generally payable in
arrears at the end of each calendar year but may be payable more frequently if provided for in the investment
advisory agreement. Upon termination of the investment advisory services, any unpaid portion of fees will
be determined and due on a pro rata basis. In certain circumstances the performance allocation or fee may
be measured over a multi-year period and/or subject to a preferred return. Actual asset based fees and
performance based fees/allocations may differ from those noted above.

Performance based allocations or fees are charged in accordance with the requirements of Rule 205-3 under
the Investment Advisers Act of 1940, and CPRE will not accept clients who do not satisfy the eligibility
criteria of applicable law. Because CPRE is compensated based in part on capital appreciation, there may
be an incentive for CPRE to make investments that are riskier or more speculative than would be the case

in the absence of such a compensation framework. In addition, CPRE will receive performance based
compensation on unrealized appreciation as well as realized gains with respect to certain Clients.

Prepayment of fees is generally not required. In certain circumstances, fees may be individually negotiated
by Fund investors and/or managed accounts. Negotiated fees may be higher or lower than those discussed
above. Similar services may be available from other investment advisers at a lower cost.

Clients will also bear direct and indirect costs, fees and expenses incurred by or on behalf of such Clients
including, among others, (i) all costs, fees and expenses of the Client directly related to the investigation,
purchase, sale, preservation or retention of investments by the Client (including all fees and commissions
of brokers and custodians, research expenses, quotation services, travel costs, all fees and expenses relating
to the registration and qualification for sale of such investments and all transfer taxes); (ii) all federal, state
and local taxes and filing fees payable by the Client; (iii) all fees and disbursements of the independent
attorneys, accountants and consultants retained by the Client, or on behalf of the Client; (iv) all filing and
recording fees; and (v) all interest expense of the Client. To the extent such expenses are incurred for the
benefit of the multiple Clients, CPRE will make a good faith allocation of such expenses among its Clients.

In the event a Client invests in a transaction which includes break-up, standby, commitment, consent,
waiver or similar fees, the Adviser generally will retain such fees and reduce the management fee or
reimbursable expenses next payable by a like amount.

In order to take advantage of diversification and new investment strategies and concepts, CPRE, from time
to time, may place a portion of a Fund’s investable assets in accounts managed by or co-managed with
other investment advisors (including affiliated and non-affiliated investment advisers), in which case such
Fund may be subject to additional fees payable to such other investment advisor as well as its proportionate
share of costs and expenses. CPRE also may place a portion of a Fund’s investable assets in other affiliated
Funds, in which case such Fund shall not be subject to any additional management or incentive fees but
will bear its proportionate share of costs and expenses. The amounts which may be invested into other
managed accounts or in CPRE affiliated investment funds are not expected to be significant.

Investors should refer to each Fund’s Offering Memorandum and other relevant documents for
additional/supplemental information regarding a Fund as well as the fees and expenses associated with such
Fund.

Performance Based Fees and Side-by-Side Management
As noted above, CPRE earns a performance allocation or fee. At this time, all CPRE Clients are charged a
performance allocation or fee. However, because the actual performance allocation or fee charged to a
specific Client may vary, there may be an incentive for CPRE to make investments that are riskier or more
speculative than would be the case in the absence of such a compensation framework or to favor those
Clients with higher performance allocations or fees over Clients with lower performance allocations or fees.
CPRE seeks to mitigate this risk by, among other things, seeking to allocate investments in a fair and
equitable manner over time among its Clients. For more information on CPRE’s allocation procedure,
please see Brokerage Practices – Allocation of Investment Opportunities.

Fees Charged to Borrowers in Debt Fund Vehicles
CPRE may charge various fees to borrowers that it is lending money to in its debt fund vehicle(s). Such
fees may include retainer fees, origination fees, underwriting fees, exit fees, prepayment fees, etc. The type
and amount of these fees will vary on each loan. The fees charged are retained by the Fund or Client, not
by CPRE.

Retainer fees are assessed to borrowers at the time of underwriting of a loan in order to pay for the
underwriting expenses associated with the loan. The retainer fees are non-refundable to the borrower. If
the amount of the retainer fee exceeds the amount of expenses incurred in underwriting, CPRE will allocate
the remaining fee to the applicable debt Fund.

Types of Clients
Clients and Fund investors include individuals, trusts, pension plans, corporations, and public and private
entities. Fund investors must meet the investor qualifications associated with each Fund (which generally
require Fund investors to be “accredited investors” and “qualified purchasers”, as such terms are defined in
the federal securities laws).

CPRE will generally manage investment advisory accounts with a minimum size of $25,000,000. However,
CPRE may, in its discretion, based upon its total client relationship and other circumstances, accept or
continue to advise smaller accounts from time to time.

Methods of Analysis, Investment Strategies and Risk of Loss
CPRE is an established owner and operator of commercial real estate, as well as a capital provider that
seeks to offer highly structured solutions and certainty of execution to its borrowers and partners. CPRE’s
investment approach is characterized by its rigorous due diligence and market research, thorough
structuring, detailed transaction documentation and active in-house asset management of each investment.

CPRE’s investments span a wide range of real estate property types including multi-family, condominium
industrial, office, hospitality, retail, senior living, student housing, and mixed use Properties. CPRE’s funds
and managed accounts are generally designed to invest in a diversified and high quality portfolio of real
estate investments across debt, value-add, and opportunistic strategies (described below). Across these
strategies, CPRE generally focuses on investments it believes have identifiable value enhancement and exit
strategies.

    •   Equity Investments. CPRE provides both: Joint Venture equity and project-level equity to sponsors
        for development and repositioning.

    •   Acquisition, Bridge, Lease Up. These financing opportunities are typically bridge facilities that
        provide sponsors with proceeds to acquire, lease-up and stabilize their assets. Such financing may
        provide the sponsor with the time necessary to execute on their business plans to institute
        institutional management and improve expenses, as well as provide funds for capital improvements,
        tenant improvement and leasing commission capital in order re-tenant and stabilize the asset.

    •   Opportunity Zone Investments. CPRE provides equity to sponsors for development of real estate in
        designated Opportunity Zones which provide certain capital gains tax deferrals and incentives when
        investing in and holding such investments for a period of at least 7 to 10 years.

•   Development and Repositioning Financing. CPRE provides financing for the ground-up
    construction or repositioning of assets.

•   Refinancings, Recapitalizations and Discounted Payoffs. CPRE provides financing for
    recapitalization of maturing debt, which may be “underwater” debt (i.e., debt for which the
    principal balance is greater than the fair market value of the underlying real estate collateral), cost
    overruns, shifts in business plans, partnership disputes, borrowers’ corporate distress or expansion
    plans that require recapitalizations.

•   Note Acquisitions. CPRE may have opportunities to acquire senior or subordinate loans or preferred
    equity investments, which are typically sourced from the firm’s established lender and intermediary
    relationships.

•   Market Backdrop Creating Distressed Situations. In the current capital markets environment,
    banks and other traditional players have pulled back in the face of volatility and uncertainty. A
    significant net share of banks have reported tightened standards for all CRE loan categories.
    Rapidly increasing financing costs and the Federal Reserve’s pursuit of aggressive interest rate
    hikes may result in “negative leverage” situations, through which borrowing costs become greater
    than the overall return produced by the property’s cash flow. Against the current backdrop of rising
    interest rates, DSCR constraints will in turn, lead to lower available loan proceeds, likely creating
    upcoming forced recapitalization and sale activity in order to satisfy debt maturities (which are
    expected to reach historical highs over the next five years). The Fund is seeking to capitalize on
    these stressed and distressed situations that may result from the current market backdrop. While we
    expect the majority of distressed and special situations to present as private markets direct real
    estate investments, the Fund may also invest in public securities, including REITs and corporate
    debt/equity where commercial or residential real estate markets may be a significant driver of value,
    as well securitized products.

•   Capitalize on Supply/Demand Imbalance: Significant demand exists for certain property types in
    certain undersupplied markets. Multifamily is a prime example due to decreasing affordability of
    for-sale housing, especially in the current market of rising interest rates, coupled with years of
    underbuilding and increasing construction costs resulting in a tight for-rent housing supply. The
    Fund is seeking to capitalize on these kinds of supply/demand imbalances.

•   Acquisitions and Recapitalizations. CPRE believes that there are opportunities for the Fund to
    acquire and recapitalize assets. These opportunities may be as a result of maturing debt, shifts in
    business plans that require additional capital, lease-up business plans that require additional time,
    expansion plans that require recapitalizations, and/or capital needs arising from situations where a
    borrower is faced with stress or distress unrelated to a project (i.e., corporate balance sheet
    pressures).

•   Value-add and Development Projects. CPRE sees opportunities to create value through value-add
    or development business plans. The degree of complexity demanded by development projects
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