Breakwater Capital LLC

Item 5 – Fees and Compensation

Financial Planning Fees
Breakwater generally includes financial planning in its investment management fee for clients whose
investment management fee exceeds $5,000 annually. For clients who wish to engage the firm for financial
planning services only, or whose management fee is less than $5,000 annually, the firm charges on an
hourly basis. These fees are negotiable but generally range from $100 to $250 on an hourly basis,
depending on the level and scope of services. An estimate of the time required and total fees to be incurred
will be discussed with the client in advance of the engagement. The balance of the fee is generally due upon
delivery of the financial plan or completion of the agreed-upon services.

Investment Management Fees
Breakwater provides investment management and financial planning for a fee based upon a percentage of
the market value of assets being managed by Breakwater. Breakwater’s management fee is exclusive of,
and in addition to brokerage fees, transaction fees, and other related costs and expenses which are
incurred by the client. Breakwater, however, does not receive any portion of these commissions, fees and
costs.

Breakwater’s fee is prorated and charged quarterly, in advance, based upon the market value of the assets
being managed by Breakwater on the first day of the new quarter. The annual fee varies (between
.60% and 1.00%) depending on the market value of assets under management, as follows:

                         PORTFOLIO VALUE                                        FEE
                         Up to $3,000,000                                     1.00%
                         $3,000,001 - $5,000,000                              0.80%
                         $5,000,001 - $10,000,000                             0.70%
                         Above $10,000,000                                    0.60%

Your fee is automatically deducted from your investment accounts. If you decide to end our relationship
prior to the end of the quarter, your fees will be pro-rated. We do not charge a termination fee. A final
invoice will immediately be prepared based on the number of days during the quarter that your account
was under our management and any refund due in fees will be mailed to you within five (5) days.

Breakwater, in its sole discretion, may negotiate a lesser management fee based upon certain criteria (i.e.,
anticipated future earnings, legacy clients, anticipated future assets, related accounts, account composition,

account retention, and pro bono activities, etc.). Since Breakwater does not sell commission products and
invests only in no load funds, we do not believe we have a conflict of interest with you. We neither accept
nor receive compensation for security trading from our custodians. However, we receive certain services
from our custodians aiding in brokerage and research services. These services help in the execution of
trades, office operations and record keeping.

Retirement Plan Rollovers
An employee generally has four (4) options for their retirement plan when they leave an employer:

   1.   Leave the money in his/her former employer’s plan, if permitted
   2.   Rollover the assets to his/her new employer’s plan if one is available and permitted
   3.   Rollover to an Individual Retirement Account (IRA), or
   4.   Cash out the account value, which has significant tax considerations

Each of these options has advantages and disadvantages and before making a change we encourage you to
speak with your CPA and/or tax attorney. If you are considering rolling over your retirement funds to an IRA
for us to manage here are a few points to consider before you do so:

   •    Determine whether the investment options in your employer's retirement plan address your
        needs or whether you might want to consider other types of investments.

   •    Employer retirement plans generally have a more limited investment menu than IRAs.

   •    Employer retirement plans may have unique investment options not available to the public
        such as employer securities, or previously closed funds.

   •    Your current plan may have lower fees than our fees.

If you elect to roll the assets to an IRA that is subject to our management, we will charge you an asset-
based fee as set forth in the agreement you executed with our firm. This practice presents a conflict of
interest because Investment Advisor Representatives have an incentive to recommend a rollover to you for
the purpose of generating fee-based compensation rather than solely based on your needs. You are under
no obligation, contractually or otherwise, to complete the rollover. Moreover, if you do complete the rollover,
you are under no obligation to have the assets in an IRA managed by our firm.

Many employers permit former employees to keep their retirement assets in their company plan. Also,
current employees can sometimes move assets out of their company plan before they retire or change jobs.
In determining whether to complete the rollover to an IRA, and to the extent the following options are
available, you should consider the costs and benefits of each. An employee will typically be investing only in
mutual funds; you should understand the cost structure of the share classes available in your employer's
retirement plan and how the costs of those share classes compare with those available in an IRA. Clients
should understand the various products and services they might take advantage of at an IRA provider and
the potential costs of those products and services.

   •    Our strategy may have higher risk than the option(s) provided to you in your plan.

   •    Your current plan may also offer financial advice.

   •    If you keep your assets titled in a 401k or retirement account, participants could potentially

       delay their required minimum distribution beyond age.
...

Item 7 – Types of Clients

Breakwater provides services to individuals, high net worth individuals, couples, families, small businesses and
non- profit organizations. We accept new clients who have a minimum of $250,000.00 to invest. This requirement
is subject to exceptions on a case-by-case basis.