Ariel Alternatives LLC

ITEM 5 – FEES AND COMPENSATION

Fees and Expenses

In general, Ariel Alternatives receives a management fee and the relevant General Partner receives
a carried interest allocation in connection with the provision of services to its clients. Each Fund’s
management fee and carried interest rates are specified in the Governing Documents. Generally,
management fees are paid quarterly in advance, out of the assets of the Fund. Ariel Alternatives
or its affiliates receive additional compensation in connection with management and other services
performed for portfolio companies of the Funds and such additional compensation will offset in
whole or in part the management fees otherwise payable to Ariel Alternatives to the extent
provided by the Governing Documents. In addition, in certain circumstances, Ariel Alternatives
receives compensation for management and other services performed in connection with co-
investments made in portfolio companies of the Funds. Investors in a Fund also bear their pro rata
portion of the initial organization and offering expenses, as well as ongoing operating,
administrative, and other expenses, of such fund. More information about a Fund’s expenses are
contained in the Governing Documents.

Other Compensation to Ariel Alternatives

To the extent specified in a Fund’s Governing Documents, Ariel Alternatives or its affiliates may
receive additional compensation in connection with management and other services performed for
such Fund or its portfolio companies(e.g., monitoring fees, consulting fees, other similar fees paid
by any portfolio company, closing fees,). Such additional compensation will offset in whole or in
part the management fees otherwise payable to Ariel Alternatives to the extent provided by a
Fund’s Governing Documents and only to the extent of the Fund’s relative ownership (or
anticipated ownership) of such investment or potential investment on a fully diluted basis.

In addition, in certain circumstances, Ariel Alternatives is typically paid fees of the type referred
to in the preceding paragraph from, on behalf of or with respect to co-investors in an investment,
as well as other fees relating to the structuring and administration of co-investment arrangements.
The receipt of such fees will not reduce the Management Fee payable by Project Black Fund or
any other investment vehicles or accounts managed by Ariel Alternatives that have also invested
in such investment, and as a result Project Black Fund will, in most cases, only benefit with respect
to the relevant allocable portion on a fully diluted basis of any such fee and not the portion of any
fee that relates to such co-investors or potential co-investors (which could include co-investment
vehicles managed by Ariel Alternatives, third parties, portfolio company management or
employees and/or others), which have the potential to be significant. Additionally, as further
described below and in the Governing Documents, it is Ariel Alternatives’ practice to use or retain
certain members of the Operations Group (as defined below) to provide services to (or with respect
to) certain portfolio companies in which one or more Funds invest. The Operations Group
generally receives compensation and other amounts described herein from the relevant portfolio
companies or Funds to which they provide services, but no such amounts will offset or reduce the
Management Fee. For the avoidance of doubt, Ariel Alternatives also will not offset compensation
received from outside sources, such as residual employee board seats at entities that are no longer
Fund portfolio companies.

The Governing Documents generally permit Ariel Alternatives to waive or agree to reduce the
Management Fee. Certain waived portions of the Management Fee are treated by the Governing
Documents as a deemed capital contribution by the relevant General Partner, which is effectively
invested in the relevant Fund on such General Partner’s behalf, and operates to reduce the amount
of capital such General Partner would otherwise be required to contribute to the Fund. The limited
partners of the relevant Fund would, in such circumstances, be required to make a pro rata
contribution according to their respective Commitments to fund any contribution that would
otherwise be required of the relevant General Partner in connection with any such waiver or
reduction as described above and, as a result, the exercise of such waiver often will result in an
acceleration (or delay) of investor capital contributions. Waived or reduced Management Fees are
not subject to the Management Fee offsets described above, and the amount of such waived or
reduced Management Fees has the potential to be significant. Due to waived or reduced
Management Fees by Ariel Alternatives and/or timing of receipt of compensation subject to offsets
(as described above), it is possible that Management Fee offsets will be delayed.

In certain circumstances, it is possible that one Fund will pay an expense or obligation common to
multiple Funds and/or co-investors (including, without limitation, legal expenses for a transaction
in which all such Funds and/or co-investors participate, or other fees or expenses in connection
with services the benefit of which are received by other Funds and/or co-investors over time), and
be reimbursed by the other Funds by their share of such expenses or obligations, without interest.
To the extent a paying Fund makes use of a credit facility to pay such expense, it generally will
not be reimbursed separately by other Funds for use of the facility. While Ariel Alternatives
believes such circumstances to be highly unlikely, it is possible that one of the other Funds could
default on its obligation to reimburse the paying Fund. In certain circumstances, Ariel Alternatives,
the relevant General Partner or an affiliate thereof is expected to advance amounts related to the
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ITEM 7 – TYPES OF CLIENTS

Ariel Alternatives provides investment advice solely to its Fund clients, and references throughout
this Brochure to “clients” and to Ariel Alternatives’ related duties to and practices on behalf of its
clients and/or investors should be construed accordingly. The Funds generally include investment
partnerships or other investment entities formed under domestic or foreign laws and operated as
exempt investment pools under the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated thereunder (the “Investment Company Act”). The investors
participating in the Funds generally include, but are not limited to, individuals, banks or thrift
institutions, other investment entities, university endowments, sovereign wealth funds, family
offices, trusts, estates or charitable organizations or other corporations or business entities and
from time to time include, directly or indirectly, principals or other employees of Ariel Alternatives
and its affiliates and members of their families, the Operations Group or other service providers
retained by Ariel Alternatives, as well as executives of portfolio companies.

The relevant General Partner also generally is permitted from time to time to establish Funds that
are alternative investment vehicles in order to permit certain investors to participate in one or more
particular investment opportunities in a manner desirable for tax, regulatory or other reasons.
Alternative investment vehicle sponsors generally have limited discretion to invest the assets of
these vehicles independent of limitations or other procedures set forth in the organizational
documents of such vehicles and the Governing Documents related Fund.

Project Black generally has a minimum investment amount of $100 million for third-party
investors, and Fund interests are offered and sold solely to persons that are (i) “accredited
investors,” as that term is defined in Regulation D promulgated under the U.S. Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”),
(ii) “qualified clients,” as that term is defined under the Advisers Act and (iii) unless waived in the
discretion of Ariel Alternatives, “qualified purchasers,” as that term is defined under the
Investment Company Act. Ariel Alternatives generally is permitted to waive such minimum
investment amount.