Equity Resource Investments LLC

Item 5          FEES AND COMPENSATION

ERI generally receives Management Fees and Carried Interest (each as defined below) or
similar performance-based remuneration from a Fund. A Fund also typically reimburses
ERI for certain expenses and/or from time to time makes other payments to ERI for
services provided to the Fund and/or its Investments, which, in certain circumstances,
reduces the Management Fees payable to ERI. Additionally, consistent with the
Organizational Documents of a Fund, the Fund typically bears certain out-of-pocket
expenses incurred by ERI in connection with the services provided to the Fund and/or the
Investments. Details about such fees and expenses are contained in the Organizational
Documents of a Fund. Further details about certain common fees and expenses are set
forth below. Some Funds do not pay fees or other compensation to ERI, but do pay
expenses in connection with the services listed in paragraphs C, D and E below.

The Management Fees, Other Fees (as defined below) and distributions described herein
are generally subject to modification, waiver or reduction by ERI in its sole discretion,
both voluntarily and on a negotiated basis with selected investors via side letter and other
arrangements, which, to the extent permitted by applicable law, may not be disclosed to
other investors in the Fund. The fee structures described herein may be modified from
time to time and fees may differ among investors in the Funds.

   A. MANAGEMENT FEES

         Many of the Funds pay annual management fees (the “Management Fees”) to ERI
         equal to the greater of (i) 2% per annum on the aggregate amount of invested
         capital (reduced when an Investment is liquidated or otherwise disposed of by the
         Fund), and (ii) .5% per annum on the total amount of invested capital (without
         reduction as described in clause (i) above) during the term of the Fund. The
         Management Fee is calculated by ERI and payable quarterly in arrears on the first
         day of each fiscal quarter based upon the greater of the applicable amounts set
         forth in clauses (i) and (ii) above as of the end of the then preceding fiscal quarter,
         and is not refundable. Notwithstanding the foregoing, Management Fees can vary
         from Fund to Fund, including, for example, by at all times being equal to the
         amount set forth in clause (i) above, and are subject to the terms set forth in each

Fund’s Organizational Documents. Unless otherwise agreed with a Fund’s
investors, Management Fees will continue to be payable during any term
extensions.

In addition, some Funds have formed, and new Funds may form, wholly-owned
limited liability companies or other entities for the purpose of acquiring
Investments for the exclusive benefit of the Fund having individual acquisition
values of less than $750,000 or $1,000,000, as set forth in each Fund’s offering
materials (e.g., fractional interests in real estate entities acquired through tender
offers, mergers and similar transactions). In such cases, such entities pay a
Management Fee equal to 2% per annum on the amount of capital invested by
such entity, which will not exceed, in the aggregate during the term of such entity’s
existence, an amount equal to 8% of the total amount of capital invested by such
entity to acquire interests or other securities in third parties.

The Management Fees paid by a Fund generally will be reduced by a percentage
of (1) the amount of fees paid by such Fund to persons acting as a placement agent
in connection with the offer and sale of interests in such Fund to certain potential
investors, (2) the fees incurred by ERI in connection with the organization of such
Fund that exceed a limit specified in such Fund’s Organizational Documents
and/or (3) certain Other Fees (as described in more detail below under “Other
Fees”) received by ERI or its affiliates. The amount and manner of such reduction,
if any, is set forth in the Organizational Documents of the applicable Fund.

Because Management Fees are calculated based on invested capital, the
Organizational Documents do not require any reduction or refund of Management
Fees following a decrease (including a significant decrease) in fair value. Similarly,
if the fair value of an Investment exceeds the aggregate investment contributions
for that Investment, Management Fees are not computed on the appreciated value
and instead continue to be determined by the amount of such investment
contributions. As a result, the Management Fees generally will not track changes
in the fair value of any individual Investment. Additionally, unless and until
substantially all of an Investment has been disposed, no portion of such
Investment will be deemed to be disposed for the purposes of the calculation of
the corresponding Fund’s Management Fee.

The Management Fee base will include any costs and expenses incurred by a Fund
in identifying, negotiating, acquiring, financing, repositioning, managing,
structuring or disposing of any Investments held by the Fund at such date, plus
any other Fund expenses (excluding the Management Fee) incurred by the Fund
as of such date; provided, that any such Fund expenses will be allocated to the
Fund’s Investments pro rata for purposes of determining the invested capital on
which the Management Fee is calculated, such that Fund expenses will be deemed

to be returned ratably as Investments are disposed of and corresponding proceeds
are returned to Fund partners. In addition, the Organizational Documents
generally do not provide for the reimbursement or refund of Management Fees
once paid.

Affiliates of ERI serve as the general partners, managers or managing members of
the Funds and generally are entitled to a residual interest in the Funds’ profits after
return of investor capital plus an additional specified return (“Carried Interest”).
The amounts are set forth in each Fund’s Organizational Documents.
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Item 7         TYPES OF CLIENTS

The Funds are generally pooled investment vehicles, which have minimum investments
ranging from no minimum to $250,000, as set forth in each Fund’s Organizational
Documents, subject to waiver by the applicable general partner/manager/managing
member in its sole discretion.