HC2 Capital LLC

FEES AND COMPENSATION
The Company or its affiliates or related persons will or may receive certain fees from the Funds,
as well as closing or financing fees and/or other eligible special income related to portfolio
transactions, to the extent permitted by or set forth in Fund Governing Documents. Detailed
descriptions of all applicable fees and carried interest are set forth in Governing Documents for
each Fund.
       Fund Management Fees
For certain Funds, the Company is entitled to receive an annual management fee based on a
percentage of all capital contributions (the “Management Fee”) as described in Fund Governing
Documents. The Management Fee is generally paid quarterly in arrears, but may be accrued and
payment deferred at the election of the General Partner. If any portion of the Management Fee is
accrued and unpaid pursuant to this provision, then the General Partner may, in accordance with
the terms of the Management Agreement, elect to pay all or any portion of such accrued and
unpaid Management Fee to the Manager before making any further distributions to the Fund
investors pursuant to the distribution provisions of the Fund Governing Documents.
       Equity Fees
In addition to Management Fees, the Company or an affiliate typically receives an “Equity Fee”
based on the amount contributed by the Fund to the investment project. This amount is included
in the project budget and paid to HC2 in full at closing of the transaction. The Equity Fee is
disclosed in Fund Governing Documents and Fund partners generally consent to the payment of
such fee at closing.
       Asset Management Fees
In addition to the Management Fee and Equity Fee paid or payable to the Company, HC2 may
also be entitled to an “Asset Management Fee” paid on a monthly basis from the project budget,
as described below until the project receives a final certificate of occupancy or for some defined
period. The Asset Management Fee is disclosed in Fund Governing Documents.
       Consulting Fees
The Company or a Fund’s General Partner may enter into one or more consulting agreements
(each a “General Consulting Agreement”) with one or more third-party foreign consultants (each
a “Consultant”) to assist the General Partner with: (i) coordinating overseas travel logistics; (ii)
hosting marketing seminars and trade shows in overseas markets; (iii) introducing the General
Partner to potential investors for the respective Fund; and (iv) providing prospective investors with
program information, marketing materials, advertising materials, and other information as
provided to the Consultant by HC2 or the General Partner ((i) through (iv), collectively, the
“Services”). In consideration for the Services, HC2 and/or the General Partner will pay to the
Consultant a fee (the “General Consulting Fee”). In the event that HC2 or the General Partner
enters into a General Consulting Agreement, the General Partner will in its sole discretion allocate
some or all of the General Consulting Fee to the respective Fund for reimbursement, the net
proceeds of the offering will also be reduced by the General Consulting Fees paid to the
Consultants allocated to the Fund, and the Fund will bear such allocation as a Fund Expense (as

defined in Fund Governing Documents). The General Consulting Fee is disclosed in Fund
Governing Documents and allocated to the Fund based on the aggregate of all Capital
Contributions, pursuant to a fee allocation as described in such documents.
       Bridge Fees
A Fund’s General Partner may cause the Fund to incur short-term indebtedness (a “Bridge
Loan”) in the event the Fund’s capital contributions do not equal or exceed a specified amount
as of the closing date. In connection with any Bridge Loan, the Fund, as the borrower, will
negotiate such Bridge Loan with the lender, which may be an affiliate of the General Partner and
the Company. The lender (including an affiliated lender) will receive an origination fee (the
“Bridge Fee”) in exchange for providing the Bridge Loan. Any Bridge Fee paid to an affiliated
lender, but not any interest or repayment of debt paid by the Partnership, shall reduce the Equity
Fee described above on a dollar-for-dollar basis.
       Carried Interest
Subject to the specific provisions contained in each Fund’s Governing Documents, in addition to
the payment of the Management Fee, the Funds (and indirectly the investors in such funds) are
required to pay to the applicable General Partner performance-based compensation in the form
of a carried interest with respect to distributions to be made to investors in the applicable Fund.
Carried interest is allocated and paid pursuant to a distribution waterfall typically after investors
have received a return of capital contributions plus a preferred return. The Fund Administrator
calculates the preferred return for each investor on an ongoing basis, as well as the distribution
waterfall and carried interest for each portfolio distribution. Calculations are reviewed and
approved by the Managing Directors.
EXPENSES
       Personnel Expenses
All salaries, bonuses, benefits and other compensation of all Company employees are deemed
to be direct expenses of the Company. No portion of such expenses will be allocated to any Funds
or portfolio investment entities unless disclosed to and approved by Fund investors.
       Overhead & Administrative Expenses
Rent, utilities, and other office, overhead and administrative expenses incurred in conjunction with
maintaining the Company’s office space and conducting general business operations, including
back-office support, accounting, and management/finance functions, are deemed to be direct
expenses of the Company. No portion of such expenses will be allocated to any Funds or portfolio
investment entities unless disclosed to and approved by Fund investors.
       Investment & Transaction Expenses
The Company conducts research and other investment due diligence on specific portfolio
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Item 7: Types of Clients
TYPES OF CLIENTS/FUNDS
The Firm provides investment advisory services with respect to certain pooled investment
vehicles exempt from registration under the Company Act that invest directly or indirectly in real
estate and real estate related investments. The investors participating in the Funds may include
individuals, banks or thrift institutions, other investment entities, university endowments,
sovereign wealth funds, family offices, pension and profit-sharing plans, 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 HC2 and its affiliates and members of their
families, or other service providers retained by HC2.
ACCOUNT REQUIREMENTS
Each investor in a Fund must satisfy the eligibility requirements outlined in the applicable
Governing Documents or otherwise required by applicable laws. Each investor generally is
required to represent that it is, among other things, an “accredited investor,” as such term is
defined in Rule 501(a) of Regulation D under the Securities Act, and a “qualified purchaser,” as
such term is defined in Section 2(a)(51)(A) of the Company Act. Investments in a Fund are also
subject to minimum initial investment amounts per investor, which generally may be waived.