SR Alternative Credit LLC

ITEM 5: Fees and Compensation

SR Alternative Credit Strategy

With respect to the Credit Funds, SRAC generally receives a monthly asset-based
management fee in a range of 1.5% to 1.75% per annum of the relevant Credit Fund’s net
assets. With respect to the PFM Credit Fund, SRAC generally receives a monthly asset-
based management fee at a rate 1.5% per annum of the net asset value of the relevant
Credit Fund. With respect to OHP II LP and OHPLTD, LLC, SRAC will not receive a
management fee. With respect to OHPC LP, SRAC receives 1.75% per annum on the net
assets. SRAC also occasionally receives a servicing fee for servicing loan participations
sold to third-parties. SRAC does not charge a servicing fee for loan participations sold in
cross-trades between funds it manages. SRAC may charge fund borrowers a loan
monitoring fee where the borrower’s loan requires higher-than-usual demands on SRAC
to monitor the loan, collateral valuations, and other loan operations.

With respect to OHP II LP, SRAC receives a performance fee of 15% of the net gain (if
any) attained by investors following resolution of the entire portfolio of OHP II LP after
return of 100% of their initial net asset value (“NAV”).

With respect to the PFM Credit Fund, SRAC receives a performance fee of 20% of the
excess of the net capital appreciation allocable to investors’ interests during a fiscal year
over a 3% net return per annum, subject to a loss-carryforward provision. It should be
noted that an investor’s initial “performance period” is a period which commences as of
the date of the purchase of such investor’s interest/shares in the relevant Credit Fund and
ends as of the close of business on the last business day of the same calendar year or the
withdrawal/redemption date of such investor’s interests/shares, whichever occurs first.
Each “performance period” thereafter with respect to such investor will generally coincide
with the end of the calendar year or the withdrawal date of such investor’s interest/shares,
whichever comes first.

With respect to OHPC LP, during any fiscal year SRAC receives a 15% performance
allocation on all realized net profits that exceed a 7% hurdle. It should be noted that that
in any fiscal year when the amount of realized net profits of OHPC LP exceeds a rate of
return of 10%, the incremental realized net profits in excess 10% will be re-allocated to
the basic capital account of SRAC at the end of such fiscal year until such time as SRAC
has received 15% of the total realized net profits. Once SRAC has received 15% of the total
realized net profits for the year, 15% of the remaining realized net profits will be re-
allocated to the capital account of SRAC at the end of the fiscal year.

With respect to OHPLTD, LLC, SRAC receives a performance fee of 15% of the net gain
(if any) attained by investors following resolution of the entire portfolio of OHPLTD, LLC
after return of 100% of their initial NAV.

Fees paid to SRAC by SMAs utilizing the SRAC Strategy are individually negotiated with
each account and may include management and/or performance-based fees. SRAC
manages two SMAs utilizing the SRAC Strategy.

Fees vary by Credit Fund. It is critical that prospective investors refer to the
relevant Credit Fund’s offering documents for a complete understanding of
how SRAC will be compensated for its advisory services. The information
contained in this Item 5 is a summary only and is qualified in its entirety by
the relevant Credit Fund’s offering documents.

Other Expenses

SMA clients are responsible for the payment of all third-party fees (i.e., custodian fees,
brokerage fees, transaction fees, etc.). Those fees are separate and distinct from the fees
and expenses charged by the Firm.

Each Credit Fund, except the PFM Credit Fund, generally pays its own brokerage and
other transaction fees and costs. In addition, each Credit Fund pays its administrator’s,
director’s, accounting agent’s, auditor’s and custodian’s fees and the administrative,
accounting, legal and operational expenses and costs. Such fees, costs and expenses are
charged on a pro rata basis to each investor in such Credit Fund. The PFM Credit Fund
generally pays: (i) its organizational expenses up to the greater of $87,500 and $175,000,
respectively, or 50 basis points of the total amount of capital commitments of all investors
in the respective Credit Fund, (ii) all ongoing costs and expenses associated with the
respective Credit Fund’s administration and operation up to the greater of $87,500 and
$175,000, respectively, and (iii) all investment expenses.

There may be other fees and expenses as well depending upon the particular
investments of each Fund. Investors and prospective investors in the Credit
Funds should review offering documents for any particular investment
carefully before investing.

ITEM 7: Types of Clients

As described in Item 4 above, SRAC provides investment advisory services to the
following types of clients:

 •   Individuals including high net worth individuals
 •   Institutions
 •   Pooled Investment Vehicles
 •   Investment Advisors
 •   Family Offices
 •   Charitable, non-profit organizations

At a minimum, SRAC requires $500,000 to invest in the Credit Funds but certain
investments may have higher minimums. The minimum amount to open an SMA is
$1,000,000. However, SRAC may waive these minimum account size thresholds in its
sole discretion. For example, SRAC may waive the minimum if the prospective SMA client
appears to have significant potential for increasing the amount of the Firm’s assets under
management. SRAC may also combine account values for investors and their minor
children, joint accounts with an investor’s spouse, and/or other types of related accounts
to meet the stated minimum.