Lument Investment Management LLC

Item 5 – Fees and Compensation

In connection with its advisory services to the Client, Lument IM will generally receive a base management
fee and performance-based incentive fee. See below for further details.

In addition, the Client will bear certain expenses incurred in connection with Lument IM’s management of
its account. Lument IM does not have a general fee schedule.

Lument IM in its sole discretion and in accordance with the Governing Documents, may in the future elect
to waive, reduce, or defer all or a portion of the Management Fee and/or Incentive Fee (as defined below)
otherwise payable by the Client. Any such waiver, reduction, or deferral would apply at the Client level
and may increase earnings and distributions to the Client’s shareholders. Lument IM affiliates (including
ORIX USA and its subsidiaries, collectively, “ORIX USA Group”) and their respective employees, the
family members of such employees, their officers, directors, principals, members, consultants and any
vehicles established for certain aforementioned persons, including employee vehicles, (collectively, “ORIX
Persons”), may hold an ownership interest in the Client and would benefit from any resulting increase in
the Client’s earnings and distributions in proportion to their ownership interests, alongside other
shareholders.

Management Fee

Lument IM expects to receive a base management fee from the Client that is calculated as a percentage of
the Client’s stockholders’ equity (“Management Fee”), and is typically payable quarterly in arrears, as
further described in the Management Agreement.

Incentive Fee

Lument IM is entitled to receive an incentive fee from the Client that is calculated and payable quarterly in
arrears. The incentive fee is equal to a percentage of the Client’s earnings in excess of a specified return
hurdle based on an annualized return on stockholders’ equity (“Incentive Fee”), as set forth in the
Management Agreement.

Other Fees

The Client pays Lument IM and/or its affiliates certain fees in connection with the servicing and/or special
servicing of mortgage assets held by the Client, including servicing fees, special servicing fees, workout
fees and liquidation fees, depending upon the specific services rendered. In addition, Lument IM affiliates
acting in such servicing or special servicing capacity may be entitled to retain certain fees or portions thereof
paid by the Client’s borrowers, including modification, waiver, assumption, transfer, processing, consent,
review and similar fees, defeasance fees, late fees and application fees. In connection with certain
investments of the Client, Lument IM affiliates also, in certain cases, retain certain fees paid by borrowers
in connection with the sourcing, processing, and closing of loans, including origination and processing fees.
In addition, when certain loans are originated, they are often accompanied by different types of fees,
including, but not limited to, exit fees that will be paid in certain circumstances, all or a portion of which
are, at times, retained or earned by a Lument IM affiliate in the event the fee is due. Lument IM affiliates
have also been retained to perform certain administration and back-office services for the Client and Lument
IM. These arrangements create a conflict of interest, as Lument IM is incentivized to choose its affiliates
to provide these services rather than an unrelated third party, and Lument IM and its affiliates have an
interest in obtaining fees and other amounts for such services which are favorable to Lument IM. Please
see Item 10 – Other Financial Industry Activities and Affiliations for details.

Lument IM generally deducts all asset-based compensation automatically in accordance with the Client’s
Governing Documents, but Lument IM may also bill the Client directly for any fees incurred or agreed-
upon expenses that are subject to reimbursement. The Client typically pays these fees quarterly, in arrears.

Furthermore, upon a vote of a two-thirds majority of the Client’s independent directors or the Client’s public
shareholders, Lument IM’s services can be terminated (a) upon written notice in connection with the
expiration of the term of the Management Agreement (subject to certain other requirements) or (b) for cause
upon written notice (subject to certain limitations). Lument IM has agreed with the Client that, upon
termination of the Management Agreement, Lument IM may be entitled to receive termination fees as
outlined in the Management Agreement.

Expenses

In connection with Lument IM’s advisory services, the Client will bear all of its own costs and expenses
(ordinary and extraordinary), reimburse Lument IM for any such costs and expenses incurred on the Client’s
behalf, which will include, without limitation: (i) all costs and expenses associated with formation and
capital raising activities; (ii) fees, costs, and expenses directly related to the acquisition, issuance,
origination, disposition, development, modification, protection, maintenance, financing, negotiation,
structuring, trading, settling, refinancing, hedging, administration and ownership of the Client’s assets or
investments and the evaluation of potential investments regardless of whether the potential investments are
made; (iii) all legal, audit, accounting, consulting, underwriting, brokerage, listing, filing, custodian,
transfer agent, trustee, rating agency, registration and other fees and charges and taxes incurred in
connection with the issuance, distribution, transfer, registration, and stock exchange listing of the Client’s
equity or debt securities; (iv) expenses of a sub-adviser; (v) all costs and expenses in connection with legal,
accounting, due diligence, securitization, property management, brokerage, leasing, and other services;
(vi) fees, costs, and expenses relating to communications to holders of equity or debt securities of the Client;
...

Item 7 – Types of Clients

Lument IM provides investment advisory services to the Client and an ORIX USA proprietary account.
Lument IM does not provide investment advisory services directly to investors in the Client.

In selecting and structuring investments appropriate for the Client, Lument IM and its affiliates will
generally consider the investment and tax objectives of the Client, not the investment, tax or other objectives
of any investor individually, though to the extent an affiliate of Lument IM or an ORIX Person is an investor
in the Client, Lument IM will experience a conflict of interest as it will have an incentive to take actions
that benefit such affiliated investor even if such actions do not benefit the Client or other unaffiliated
investors.

Lument IM currently does not require a minimum account size.