MCR Fund Management LLC

Item 5: Fees and Compensation

Investors should refer to the specific Fund’s Offering Documents in which they are prospective
investors of for a complete understanding of each Fund’s applicable fees and expenses.

A brief summary of such fees is provided below.

Investment Management Fee

During the commitment period (as defined in applicable Fund Offering Documents), each
Limited Partner will pay to the Manager an annual investment management fee (the
“Investment Management Fee”) of up to 1.5% of each Limited Partner’s aggregate Capital
Commitment. After the expiration of the commitment period, the Investment Management
Fee will be up to 1.5% of the net equity invested, less capital contributions allocable to
investments that have been completely sold, written off or otherwise disposed of, in each
case calculated as of the last day of the period prior to the period for which the Investment
Management Fee is payable. The Investment Management Fee will be a Fund expense and
will be paid quarterly in advance and prorated for any period less than a calendar quarter.
MCR represents the purchase of Limited Partner interests (the “Interests”) as the aggregate
capital commitments (the “Capital Commitments”) to the Fund.

The Investment Management Fee may be offset by the General Partner against any
distributions to the Limited Partners or may be requested from the Limited Partners as a
capital contribution to the extent amounts remain undrawn under such Limited Partners’
original Capital Commitments, as defined in the Offering Documents

The Investment Management Fee (or a portion thereof) may be payable by the Fund or any
of its subsidiaries. The General Partner may waive, reduce, or otherwise alter the Investment
Management Fees and/or carried interest distributions payable by certain Limited Partners,
including, but not limited to, Limited Partners who are affiliates of the General Partner.

Other Types of Fees or Expenses

Expenses

Expenses borne by Funds are set forth in relevant Offering Documents, and generally include
the following:

all fees, costs, expenses, liabilities, and obligations relating to the Fund and/or its subsidiaries’
activities, business or actual or potential investments (to the extent not borne or reimbursed
by a subsidiary or an investment or potential investment), including all fees, costs, expenses,
liabilities, and obligations relating or attributable to:

(i) the Investment Management Fee, if any; (ii) activities with respect to the investigation,
origination, identifying and sourcing of investment opportunities for the Fund, including
meeting with consultants, broker-dealers, investment banks and other sources of investments
and developing an investment pipeline, whether or not consummated, and whether incurred
before or after the formation of the Fund; (iii) activities with respect to the structuring,
organizing, negotiating, consummating, diligencing (including any subscriptions to any
periodicals, databases and/or research services), acquisition (including legal, regulatory, tax

MCR Fund Management LLC                                             Form ADV Part 2A Brochure

and/or compliance costs incurred in connection with structuring such acquisition), bidding on,
ownership, management, monitoring, operation, development (including hard and soft
costs), holding, improvement, servicing, financing, refinancing, restructuring, trading, taking
public or private, currency hedging costs, hedging of interest rates on financings, selling,
valuing, winding up, liquidating, dissolving or otherwise disposing of (including costs relating
to property operations and services), as applicable, the Fund’s investments and its actual and
potential investments (including follow-on investments) (including any associated legal,
financing, commitment, transaction or other fees and expenses payable to attorneys,
accountants, tax professionals, investment bankers, lenders, expert networks, third-party
diligence providers, consultants and similar professionals in connection therewith (excluding
consulting services that are not related to an investment or prospective investment and are
not performed as part of an investment or investment strategy initiative) and any fees,
expenses and/or compensation related to transactions that were or may have been offered
to co-investors or pursued with joint venture partners), whether or not any contemplated
transaction or project is consummated and whether or not such activities are successful (it
being understood that the General Partner shall use commercially reasonable efforts to
procure that any co-investors or joint venture partners participating in such a transaction or
project that is consummated and/or successful shall bear a proportionate share of any fees,
costs or expenses incurred in connection therewith); (iv) in connection the organization and
documentation of any Fund subsidiaries (including any fees, costs and expenses attributable
to qualifying any REIT Subsidiary as a REIT and maintaining such qualification), or an ERISA
operating company (including fees, costs and expenses attributable to structuring the Fund
to qualify or preserve the ability to qualify, or structuring any acquisition financing or other
transaction with respect to such person to qualify or preserve the ability to qualify, as an ERISA
operating company and maintain such qualification), or in seeking to do any of the foregoing;
(v) meetings with or reporting to the Limited Partners (including any reports prepared upon
the request of a Limited Partner), any other conference, meeting or webcast with the Limited
Partners and any periodic executive forum of investment management and other persons; (vi)
subject to clause (vii) below, fees, costs and expenses for the following, whether, in each case
as applicable, such fees, costs and expenses are charged for services performed by third
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Item 7: Types of Clients

Our clients are the Funds, as described in Item 4 above, and their Investors are generally,
among others, financial institutions, funds of funds, pension plans, endowments, high net-
worth individuals, financially sophisticated individuals, and other sophisticated investors.

Item 8: Method of Analysis, Investment Strategies, and Risk of Loss

The descriptions set forth in this Brochure of specific advisory services that we offer to Clients,
and investment strategies pursued, and investments made by us on behalf of our Clients,
should not be understood to limit in any way our investment activities. We may offer any
advisory services, engage in any investment strategy and make any investment, including any
not described in this Brochure, that we consider appropriate, subject to each Client’s
investment objectives and guidelines as set forth in its fund offering documents. The
investment strategies we pursue are speculative and entail substantial risks. Investors should
be prepared to bear a substantial loss of capital. There can be no assurance that the
investment objectives of any Client will be achieved.

Investment Objectives

Subject in each case to the restrictions set forth in each Fund’s respective offering and
governing documents, the Funds we advise have as their objective to make investments in
branded and unbranded hotels and hotel-related real estate and real estate related assets,
including but not limited to, airport/on-airport hotels, independent/unbranded hotels, full-
service hotels, hotel casinos, hotel resorts and condominium hotels, and in hotel and
hospitality related software and other services.

Risk of Loss Factors

The following risk factors do not purport to be a complete list or explanation of the risks
involved in an investment in the clients advised by us. These risk factors include only those
risks we believe to be material, significant or unusual and relate to particular significant
investment strategies or methods of analysis employed by us.

An investment in the Funds involves a high degree of risk, and is suitable only for investors of
substantial means who have no immediate need for liquidity of the amount invested and who
can afford a risk of loss of all or a substantial part of such investment. There can be no

MCR Fund Management LLC                                             Form ADV Part 2A Brochure

assurance that the Funds’ investment objectives will be achieved or that the limited partners
that invest in the Fund (the “Limited Partners”) will receive a return of their capital. Investors
may be subject to a number of risks, only some of which are set forth below. Such risks include,
but are not limited to, those discussed below. In addition to the other information contained
in this document, each prospective investor should consult with his, her or its personal legal,
tax and financial advisers and carefully consider and evaluate the risks before executing any
subscription documents or signature pages with respect to an investment in the Funds.

General Risks

Investors should refer to the specific Fund’s Offering Documents in which they are prospective
investors of for a complete understanding of each Fund’s applicable risks.

Risks Associated with the Fund’s Management and Operations

Reliance on General Partner. The Fund is managed exclusively by the General Partner and the
Manager and, except with respect to certain limited approval rights of the Advisory
Committee and the Limited Partners, the Limited Partners will not have any right to
participate in the management or business of the Fund. Even in situations where the Limited
Partners vote on Fund matters, a small group of Limited Partners with relatively large Capital
Commitments could have the requisite percentage of votes to determine the outcome of such
decisions (although the concentration of voting power will not be known until the final closing
date and could change if a Limited Partner withdraws or transfers its Interest). Such
concentration of voting power, if it occurs, could have the effect of limiting the ability of the
Limited Partner with relatively smaller Capital Commitments to have a meaningful vote on
matters requiring a vote of the Limited Partners.

Lack of Complete Control Over Investments. Under certain circumstances the investment
recommendations and decisions of the General Partner may be subject to the approval of the
investment team, the Advisory Committee or the Limited Partners. Consequently, the General
Partner may not be solely in control of the acquisition, financing and disposition of all
investments in the Fund’s portfolio and the portfolio’s construction may be negatively
impacted as the Fund’s investment strategy and targeted returns are premised upon the
opportunity to assemble, manage, finance, retain and harvest a complete and balanced
portfolio.

Involvement of Affiliates. In order to implement and facilitate the Fund’s investment strategy,
certain affiliates of the General Partner provide the Fund with certain services, including
property management, construction/project management, development management,
renovation management, technical services and leasing arrangements. In the event such
affiliates are not involved or their involvement is terminated early, the Fund’s investment
results and prospects may be negatively impacted. Affiliates of the General Partner have no
obligation to provide services. To the extent any affiliates are involved, certain risks apply,
including those described in “– Risks Associated with Potential Conflicts of Interest” below.

Limitation of Liability of General Partner and Affiliates. The Partnership Agreement limits the
circumstances under which the General Partner or certain related parties and affiliates will be
liable to the Fund. As a result, Limited Partners may have a more limited right of action in
certain cases than they would have in the absence of such limitations. The Partnership
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