Varde Management LP

Item 5 – Fees and Compensation

A general description of the fees and compensation received by the Firm is set forth below. The
details of the fees and compensation each Client pays the Firm is set forth in such Client’s Account
Documents.

Advisory Services

The Firm and/or its related entities are generally paid a management fee by each Client in
accordance with the Client’s Account Documents. The Firm is typically authorized under the
Client's Account Documents to charge and deduct management fees directly from the assets of the
Clients. Please refer to the Account Documents of each applicable Client for complete information
on the fees and compensation payable with respect to such Client.

The fee percentage and/or the base upon which the fee is calculated varies by Client and in some
cases varies over the life of a particular Client, as negotiated and determined at the time the Client
is established and as set forth in its Account Documents. Management fees, performance-based
fees and incentive allocations are sometimes waived or reduced with respect to investments in the
Clients by the Firm and/or its affiliates. The Firm reserves the right to waive, reduce or defer any
compensation or allocations payable to it by a Client, including with respect to certain participants
in such Client, at any time the Firm deems appropriate in its sole discretion.

Each Client will be charged (or will reimburse the Firm) for certain organizational, operational,
and other permissible expenses as described in the Account Documents for such Client. The
permissible organizational expenses vary among Clients, but the expenses borne by each Client
generally include, to the extent applicable to such Client: all fees, costs, charges, expenses,
liabilities, obligations and other amounts (including amounts paid to outside legal counsel,
accountants and tax advisors, including in each case professionals on secondment to the Firm)
incurred in connection with or incidental to the formation, organization, and establishment of the
Client and its general partner and the marketing and offering of interests in the Client to investors
and prospective investors, including Travel-Related Expenses (as defined herein) and amounts
incurred in connection with or incidental to: (i) preparing, printing, mailing or otherwise
distributing Account Documents, prospectuses, presentations, disclosure documents, side letters
and similar agreements, comment responses, diligence materials, legal opinions and other
documentation; (ii) complying with any law or regulation related to the formation, organization,
establishment, marketing and offering of the Client and its general partner (including any “blue
sky” and “world sky” filing fees, costs and expenses); (iii) the engagement of placement agents, if
applicable; (iv) other capital raising, accounting and administrative filings; and (v) negotiating
with investors or prospective investors.

The permissible operational and other expenses vary among Clients depending on negotiated terms
and/or structural considerations under which Värde bears certain expenses, but the expenses borne
by each Client generally include, to the extent applicable to such Client: all fees, costs, charges,
expenses, liabilities, obligations and other amounts (including amounts paid to outside legal
counsel, accountants and tax advisors, including in each case professionals on secondment to the
Firm) incurred in connection with or incidental to the Client’s and its related entities’ investments,
potential investments, portfolio companies, operations and/or business (whether undertaken

directly by the Client or indirectly by another entity, including a special purpose vehicle, co-
investment vehicle, portfolio company or alternative investment vehicle and whether incurred by
the Firm, the Client’s general partner, their respective related entities or their respective
investments, potential investments or portfolio companies), including organizational expenses,
management fees payable to the Firm and fees, costs, charges, expenses, liabilities, obligations
and other amounts incurred in connection with or incidental to: (i) the evaluation, sourcing,
structuring, organizing, acquisition, purchase, sale, disposition, operating, holding, valuing,
carrying, financing, restructuring, taking public or private, winding-up, liquidating, refinancing,
discovery, investigation, development, execution, trading, hedging or management of investments,
follow-on investments and related transactions (whether or not consummated), including (A)
amounts incurred in connection with or incidental to engaging service providers and advisors
(including financial advisors, investment banks, brokers, broker-dealers, finders, financing
sources, asset managers, developers, joint venture partners, consultants, third-party research
providers, information services, work-out specialists, valuation services and other third-parties),
(B) amounts incurred in connection with or incidental to entering into derivative transactions or
short sales, (C) sales and brokerage commissions, clearance charges, commitment fees, origination
fees, debt service fees, underwriting commissions and discounts, broken deal expenses, reverse
break-up and termination fees, (D) Travel-Related Expenses, and (E) amounts incurred in
connection with or incidental to acquiring or licensing software, obtaining research (including
payments relating to research contemplated by Directive 2014/65/EU of the European Parliament
on markets and financial instruments and any rules and regulations related thereto, including as
onshored in the United Kingdom following the United Kingdom’s exit from the European Union),
subscribing to publications, attending and sponsoring conferences (including Travel-Related
Expenses), conducting business entertainment and printing; (ii) the maintenance of books and
...

Item 7 – Types of Clients

The Firm’s Clients include Private Funds (including, without limitation, actively managed
collateralized loan obligations) and Managed Accounts. Investors in the Private Funds include
various global institutional investors (e.g., trusts, endowments, insurance companies, foundations,
pensions, corporations and other types of entities, including private funds-of-funds) as well as high
net worth individuals that, in each case, meet the regulatory and other requirements under which
the Private Fund operates and desire to invest in accordance with the Private Funds’ investment
objectives.

Interests in the Private Funds are offered in private placements under the U.S. Securities Act of
1933 (as amended, the “Securities Act”). As a result, the Firm generally offers limited partnership
(or equivalent) interests in the Private Funds to a limited number of “accredited investors” as
defined in Regulation D under the Securities Act, and except with respect to Private Funds that
rely on the exemption under Section 3(c)(1) of the U.S. Investment Company Act of 1940 (as
amended, the “1940 Act”), interests are offered exclusively to “qualified purchasers” as defined in
Section 2(a)(51) of the 1940 Act due to the Private Funds’ exempt status under Section 3(c)(7) of
the 1940 Act. Employees who qualify as “knowledgeable employees” under Rule 3c-5 of the 1940
Act are also permitted to invest (directly or indirectly) in the Private Funds. Investors and
prospective investors in each Private Fund should refer to the Account Documents of such Private
Fund for complete information on minimum investment and other requirements for participation
in such Private Fund.

In connection with the formation and management of a Client, the Firm in many cases forms
certain related entities for such Client. The Firm may establish vehicles to address tax, legal or
regulatory issues or requirements of certain investors in such Client or for other purposes. The
Firm may also form parallel funds to invest alongside a Client. In addition, the Firm may form
alternative investment vehicles, holding companies or other special purpose vehicles for the
purpose of facilitating certain investments by one or more Clients. Please refer to the Account
Documents of the applicable Client for complete details regarding entities that the Firm may form
in connection with the formation and management of such Client.