Pagaya Investments US LLC

5.​    Fees and Compensation

General Description

For each Fund, Pagaya is generally compensated for its investment advisory services in the
following manner: (i) management fees (“Management Fees”) and (ii) either performance-based
fees or allocations or carried interest (“Incentive Fees”). In addition, the SFR II Fund (as defined
below) pays Pagaya Tech or its affiliates (collectively, the “Pagaya Affiliates”) a technology
services fee as further described below (the “Technology Services Fees”). The Management
Fees, the Incentive Fees and the Technology Services Fees (collectively “Fees”) are set out in the
terms of the respective Fund’s governing documents. However, from time to time, Pagaya has
entered into, and may in the future enter into, side letters or similar agreements with some Fund
investors that provide different economic or other terms to investors, including with respect to
fees.

Management Fees for new investors in the Pagaya Opportunity Funds and Pagaya Auto Loans
Funds are charged at an annual rate that generally ranges from 0.5% to 1.75% of each Fund’s net
asset value per unit. The Management Fee charged to the Pagaya Smartresi FI Fund (“SFR I
Fund”) entities is 1.5% of committed capital during the investment period and 1.5% of net
invested capital after the investment period. The Management Fee for these funds is generally
paid monthly. The Management Fee charged to the Pagaya Smartresi Fund II (“SFR II Fund”)
entities is 0.25% of aggregate capital commitments during the investment period and 0.25% of
unreturned capital contributions after the investment period. This Management Fee is generally
paid quarterly.

The Incentive Fee for the Pagaya Opportunity Funds and Pagaya Auto Loans Funds generally
ranges from 10% to 20% of each Fund’s net realized and unrealized gains on an annual basis,
which may be subject to a “hurdle,” high water mark, or loss carryforward calculation, which
varies by Fund. SFR I Fund is subject to a 25% carried interest with respect to distributions in
excess of a 10% preferred return to investors, subject to a general partner catchup provision.
SFR II Fund is subject to a 20% carried interest with respect to distributions in excess of a 12%
preferred return to investors, subject to a general partner catch up provision.

SFR II Fund also pays a Technology Services Fee to a Pagaya Affiliate in an amount up to 5% of
the purchase price of each portfolio investment in consideration for access to Pagaya Tech’s
Proprietary Technology. The Technology Services Fee is generally paid quarterly based upon the
portfolio investments acquired during that calendar quarter.

Pagaya Tech is actively seeking to use the Proprietary Technology to expand its commercial
relationships with, and its provision of technological solutions and services to, the Partners.

Pagaya Tech and/or Pagaya Affiliates receive fees and other revenues from its commercial
relationships with the Partners, including fees in consideration for access to and rights to use the
results of the Proprietary Technology and other services provided by Pagaya Tech and/or a
Pagaya Affiliate to the Partners. These fees include certain AI network integration fees called
model fees (also sometimes referred to in agreements with Lending Partners as feature fees or
incentive fees) that are separately negotiated with each Lending Partner and typically take into
account volume metrics. These model fees vary among Lending Partners, but when imposed are
typically calculated as a percentage, currently generally ranging from 0.05% to 6.50%, of the
principal amount of loans originated through the use of the Proprietary Technology. In
connection with sales by certain Partners of loans that are in default or charged off, Pagaya Tech
and/or Pagaya Affiliates also receive from Partners fees calculated as a percentage of the net
proceeds of sales made or facilitated through access to the Pagaya network and Partner
relationships and/or the use of the Proprietary Technology. Pagaya Tech and/or Pagaya Affiliates
may earn other fees or sources of revenues in the future from its relationships with the Partners.

Pagaya, in its discretion, has at times in the past waived or reimbursed, and may in the future
waive or reimburse, the Funds for certain of the Fees and other expenses incurred by the Funds.

The methodology for calculating the Fees varies for each Fund. Accordingly, Fund investors
should carefully review the offering materials for the relevant Fund for more information
regarding the Fees and expenses paid by each Fund.

Payment

Pagaya deducts its Fees directly from each Fund’s accounts.

Other Fees and Expenses

Generally, in addition to Management Fees, Incentive Fees and, in the case of the SFR II Fund,
Technology Services Fees, investors bear all other fees and expenses of the Funds as specified in
their respective governing documents. By way of example, such fees and expenses may include:
(i) brokerage commissions, custodial fees, settlement costs, origination fees, sourcing fees,
transaction fees, agent fees, servicing fees and other charges for transactions in securities and
other instruments; (ii) prime brokerage fees, “bid-ask” spreads, mark-ups and interest and stock
loan expenses; (iii) margin and interest expense and commitment fees on debit balances or
borrowings; (iv) fees related to trading, portfolio management, order management and risk
management systems; (v) fees, costs and expenses incurred in connection with borrowings by a
Fund; (vi) fees, costs and expenses (including travel, legal and consulting fees) related to the
identification, research, due diligence, development, analysis, evaluation, negotiation, purchase,
holding, valuation, maintenance, monitoring, financing, refinancing, structuring, restructuring,
offer, sale, settlement, transfer, disposition or realization of investments (whether or not
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7.​    Types of Clients

At present the only clients of Pagaya are the Funds, although Pagaya may in the future manage
separate accounts for clients. Interests in the Funds are offered and sold exclusively to investors
satisfying the applicable eligibility criteria set forth in each Fund’s governing documents.
Typically, investors are institutions, funds, high net worth individuals, and other similarly
qualified persons.