Prospect Ridge Advisors LLC

Item 5: Fees and Compensation
General
Prospect Ridge typically receives compensation from fees based on capital commitments, net asset
value, acquisition cost and/or invested capital, carried interest allocations, and certain other fees or
expenses as described further below. Each Client pays fees and expenses in a specific manner
pursuant to its Governing Documents and Clients and Investors are required to review the
Governing Documents to understand all fees and expenses paid as the descriptions below provide
only summary information about such fees and expenses and are qualified in their entirety by the
Governing Documents.

Management Fees
An affiliate of AB receives the management fee paid by Investors in Funds I and II and AB or an
affiliate will pay Prospect Ridge or an affiliate of Prospect Ridge 100% of the management fees
earned by such Funds. Prospect Ridge receives the management fee paid by Investors in Fund IV,
Fund III, QOF I, QOF II, QOF III, QOF IV, Debt Fund I and II, AB PREP, the HRNO Co-Invest,
the WH Co-Invest and the HRC Co-Invest. During the commitment period and prior to the accrual
of a management fee for a Competing Fund (which is generally a successor fund in the same
strategy, but is further described in the Governing Documents), management fees paid by Investors
in Fund IV range from 0.5% to 1.5% per year based on an Investor’s capital commitment and 0%
to 1.5% per year based on invested capital. Subsequent to the earlier of the applicable commitment
period expiring or the accrual of a management fee for a Competing Fund, management fees for
Funds I, II, III and IV range from 1.5%-2.0% per year based on invested capital. Management fees
paid by Investors in QOF I, QOF II, QOF III and QOF IV equal 1.5% per year based on contributed
capital. Management fees paid by Investors in the HRNO Co-Invest equal 1% per year based on
invested capital. Management fees paid by Investors in the WH Co-Invest range from 0% to 0.75%
per year based on capital commitments and amounts drawn from the standby commitment.
Management fees paid by the Investor in the HRC Co-Invest equal 0.5% per year based on capital
commitments. Management fees paid by the Investors in Debt Funds I and II equal 1% per year
based on contributed capital. During the commitment period for AB PREP, management fees range
from 1% to 1.75% per year based on the net asset value of the fund. Subsequent to an Investor’s
commitment period expiring, management fees are reduced by 0.25%. Investors in AB PREP and
HRC Co-Invest also pay a 0.35% acquisition fee based on the total cost of each investment and
0.5% acquisition fee based on capital commitments, respectively. Investors in the employee feeders
pay reduced or no management fees.

Management fees for the Funds, to the extent applicable, are typically paid quarterly in arrears, and
will either be paid from the respective Fund’s cash flow or by calling capital from Investors. For
any periods that are less than a full quarter, the management fees for such quarter will be prorated.

Investors in the ADM Syndicate JV do not pay management fees.

Carried Interest Allocations
A portion of the distributable proceeds of Funds I, II, III and IV, QOFs I-IV, Debt Fund I and II,
AB PREP, the HRNO, WH and HRC Co-Invests, and the ADM Syndicate JV will be allocated as
“carried interest,” generally to the capital account of the general partner or managing member for
each such Fund or vehicle. An affiliate of AB will receive any carried interest allocation for Funds
I and II, but certain Prospect Ridge personnel are entitled to receive a portion of such allocation and
will receive any corresponding payments or allocations due to them from AB. An affiliate of
Prospect Ridge will receive any carried interest allocation from Fund III, Fund IV QOFs I-IV, Debt
Fund I and II and AB PREP. The manner of calculation of carried interest for each Fund is disclosed
in the Governing Documents, and varies by Fund. Generally, however, 10-20% of the investment
profits, subject, in certain vehicles, to a catch up, of the Funds are allocated as carried interest to
such Fund’s general partner or managing member after the Fund achieves a preferred return that
ranges from 5 - 9%. Incentive distributions to Prospect Ridge or its personnel or affiliates are at
times subject to claw back provisions which include the return of any incentive-based distributions
received by Prospect Ridge for re-distribution to Investors.

An affiliate of Prospect Ridge is entitled to carried interest from the ADM Syndicate JV of 7.5% of
the investment profits, subject to a catch up, after Investors have received a 9% preferred return,
however, no carried interest is expected to be paid with respect to that investment.

An affiliate of Prospect Ridge will earn carried interest from the HRNO Co-Invest and WH Co-
Invest of 10% of the investment profits, subject to a catch up, after Investors have received a 9%
preferred return. An affiliate of Prospect Ridge will earn carried interest from the HRC Co-Invest
of 10% of the investment profits, subject to a catch up, after a 6% preferred return.

Property Management Fees
Prospect Ridge provides certain property management services with respect to one property
pursuant to a sub-agency agreement. Prospect Ridge receives a fee equal to the lesser of (i) 1.25%
of gross receipts from the property for the applicable month and (ii) the difference between $5,000
and the agency fee for that month.

Other Fees
While the Governing Documents for certain Funds permit Prospect Ridge to earn transaction or
other similar fees in connection with investments or unconsummated transactions (“Other Fees”),
Prospect Ridge does not currently earn Other Fees. To the extent Prospect Ridge does earn Other
Fees, such Other Fees will be offset against the management fees in the manner described in the
Governing Documents. The Governing Documents for Fund III, Fund IV, QOFs I-IV and AB PREP
...

Item 7: Types of Clients
Prospect Ridge provides investment advisory services to its Clients, as described above in Item 4:
Advisory Business. Investors in the Funds include, but are not limited to, high net worth individuals,
employees, trusts, foundations, pension plans (corporate and government), endowments, pooled
investment vehicles, insurance companies, foreign investors including government-sponsored
entities, and corporate or business entities.

The Funds offer interests only to certain Investors who meet qualification requirements under
applicable securities laws. Details concerning applicable Investor suitability criteria are set forth in
the respective Governing Documents and subscription materials, which are furnished to each
Investor. Admission to the Funds is not open to the general public.

The minimum capital commitment of an Investor in each Fund is typically $500,000, although
lesser commitment amounts may be accepted in the discretion of Prospect Ridge or the general
partner of a Fund.