Sound Mark Partners LLC

FEES AND COMPENSATION

       The Advisers do not have a set fee schedule for the services provided to Clients as fees and
compensation are negotiated with the applicable Client. In general, Sound Mark receives a
management fee (“Management Fee”) and a performance-based fee in connection with advisory
services provided to Clients, as further described below. Sound Mark also receives additional
compensation in connection with the provision of certain services performed in connection with a

Client’s investments. Clients also bear certain investment-related expenses, as set forth in the
applicable Governing Documents (or Sub-Advised Fund Documents).

Management Fees
        For each Private Investment Fund, Management Fees applicable to investors are set forth in
the applicable Private Investment Fund’s Governing Documents and can vary among investors.
Typically, a Private Investment Fund’s Management Fees are a percentage of the value of the assets
under management or invested capital. Investors in the Horizons Fund pay Sound Mark (or one of its
affiliates) a Management Fee that ranges from 1.25% to 1.5% of the Horizons Fund invested capital,
as adjusted for impaired assets and the distribution of redemption proceeds and other distributions to
investors in accordance with the Partnership Agreement.

       The Management Fee is payable by the Horizons Fund quarterly in arrears and installments
payable for any period other than a full quarterly period (including with respect to an investor who
redeems other than as of the end of a quarterly period) are typically adjusted on a pro rata basis
according to the actual number of days in such period. The Management Fee is payable by the
Horizons Fund until the final distribution of the Horizon Fund’s assets, as described in the Partnership
Agreement. Where the Governing Documents calculate Management Fees based on the amount of
Commitments or the amount of investment contributions, the amount of Management Fees generally
will not be reduced based on reductions in investment value, except where specified by the relevant
Governing Documents. As part of the dissolution and liquidation of the Horizons Fund, the
Management Company will continue to receive management fees calculated in accordance with the
Horizons Fund’s governing documents until the completion of the liquidation process.

        Management Fees that Sound Mark receives with respect to advisory services it provides
 to Sub-Advised Funds are generally structured similarly to the Private Investment Funds’
 Management Fees. Terms of such fee arrangements are set forth in the applicable Sub-Advisory
 Agreement, which is generally terminable by the Sub-Advised Fund upon the occurrence of certain
 events specified therein. In the event of termination, Sound Mark generally will receive payment
 of any accrued but unpaid fees.

         For Managed Accounts, Management Fees are negotiated with the Managed Account
 Client and will vary depending upon such Client’s investment objectives. Typically, such Client’s
 fees are based on the value of assets under management or invested capital. The terms of payment
 are set forth in the Managed Account Agreement, but such fees are generally accrued and paid
 monthly or quarterly and are payable until the Managed Account Agreement is terminated. In the
 event a Managed Account Agreement is terminated and fees have been paid in advance, the Client
 will receive a pro rata refund of such fees based on the number of days for which services were
 provided during the period in question as set forth in the Client’s Managed Account Agreement.

TYPES OF CLIENTS

         The Advisers provide investment advice solely to Clients, including Private Investment
Funds. References throughout this Brochure to Clients and to Sound Mark’s related duties to, and
practices on behalf of, Clients and/or investors should be construed accordingly. Private
Investment Funds generally include investment partnerships or other investment entities formed
under U.S. or non-U.S. laws and operated as exempt investment pools under the Investment
Company Act of 1940, as amended (the “Investment Company Act”). The Advisers’ Clients, and
the underlying investors participating in Private Investment Funds, typically are institutional
investors, such as banks or thrift institutions, insurance companies, corporations, pension and
profit-sharing plans, trusts or estates, charitable organizations, or other investment or business
entities but may, from time to time, also include high net worth individuals or, directly or indirectly,
principals or other employees of Sound Mark.

       Sound Mark’s minimum investment requirements vary among Clients, although the
required minimum for third-party investors generally is $5 million. Sound Mark or the relevant
General Partner generally is permitted to waive such minimum investment amount. In addition,
Sound Mark typically provides advisory services only to investors that are qualified purchasers or
knowledgeable employees (each as defined in the Investment Company Act).

              METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS

Investment Strategy

         In general, the Advisers’ investment strategy for their Clients is to make controlling
investments in commercial real estate debt or debt-related investments, including first mortgages,
b-notes, mezzanine loans, participations, preferred equity, non-performing or distressed debt,
investment grade and non-investment grade securities and equity. The Advisers intend to focus on
investing Client assets primarily in U.S. based commercial real estate debt in geographically
diverse areas, although investments may be made outside the U.S., subject to any limitations in the
Governing Documents. The Advisers expect to invest Client assets in a mix of property types,
including multifamily, office, industrial, retail, hotel and mixed-use properties, although the
Advisers do not expect to invest Client assets in senior living properties that have any level of care
(i.e., assisted living, skilled nursing) or casinos or other operating businesses that require a high
level of specific industry expertise.

        For Private Investment Funds, the Advisers are targeting an investment range of $10 to
$20 million per investment, although actual investments may range in size. The Advisers expect
Private Investment Funds to use leverage on a limited basis, with an estimated blended loan -to-
value ratio of 75-80%. Private Investment Fund debt investments are expected to be held to
maturity, which may be as long as 10 years or more, although the Advisers might exit certain
investments earlier on an opportunistic basis.

        The Advisers expect to source investment opportunities primarily through their
relationships with borrowers, banks, loan sale groups, investment banks, and developers. When
reviewing investment opportunities on behalf of Clients, the Advisers take a credit-centric
approach and focus on such credit-related factors as (1) long-term stability of in place cash flows
or overall marketability of a project to the extent it is under full or partial development, (2)
underlying asset valuation and structural quality, (3) environmental soundness and (4) the
experience, financial strength and credit-worthiness of the sponsor. Property and investment due
diligence is expected to be completed in house with third parties hired to perform specific
functions, including valuations by third party appraisers and environmental and structural
assessments by engineers.

        If an investment is approved and closed, an asset manager will be assigned (typically the
underwriter who worked on the deal) to provide asset surveillance and property performance
updates and to prepare quarterly asset management reports for the Advisers’ credit committee.
While the asset manager will have primary responsibility for all asset management actions, the
Advisers’ credit committee approves all asset acquisitions and dispositions, as well as any other
significant decisions with respect to an investment, including those relating to obtaining financing,
modifying investment terms, pursuing additional collateral, or approving major leases, loan
assumptions, changes to capital improvement plans or additional capital work.

         While the foregoing summary provides a general overview of the Advisers’ existing and
anticipated investment strategies and process, prospective and existing Private Investment Fund
investors and Managed Account Clients are encouraged to review the Governing Documents for
more detailed information regarding the investment objectives of and any investment strategies,
restrictions or limitations for a given Private Investment Fund or Managed Account. The Advisers
may provide investment advisory services to the Sub-Advised Funds subject to the investment
restrictions or limitations set forth in the Sub-Advised Fund Documents so Sub-Advised Fund
investors should review those documents for investment information specific to those funds.

Risks of Investment

         Each Client bears the risk of loss that the Advisers’ investment strategy for such Client
entails. There can be no assurance that the Advisers will meet a Client’s investment objectives or
otherwise be able to successfully carry out its investment program or that there will be any return
of capital. A prospective investor should only invest in a Private Investment Fund or Managed
Account as part of an overall investment strategy and only if such investor is able to withstand a
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