Lakewater Capital LLC

Item 5: Fees and Compensation
Management Fees
LakeWater receives a management fee at the annual rate of 1.50% from the private funds. The fee is
paid monthly in advance in accordance with the terms outlined in the private offering memoranda.
Management fees are calculated by the third-party administrator, approved by LakeWater and deducted
from each investor’s capital account. LakeWater waives the management fee with respect to the
accounts of principals, employees and affiliates of LakeWater and has discretion to waive or reduce the
management fee with respect to the accounts of other investors/shareholders.

Management fees charged for the separately managed accounts may vary, are negotiated on a case by
case basis and are outlined in the investment management agreements with each client. Management
fees are billed on a periodic basis as outlined in the agreement. Investment management services may
be terminated in accordance with the terms outlined in the respective investment management
agreements. In the case of its risk-adaptive, asset allocation product, fees are also negotiated on a case
by case basis up to an annual rate of 1.00%, typically paid monthly in arrears.

Fees for due diligence, investment analysis and consulting on private equity and debt transactions are
individually negotiated and outlined in an agreement with the client.

Other Fees
The Private Funds bear all costs and expenses directly or indirectly related to their investments and
operations, including, but not limited to, fund administration, accounting, audit, tax and legal fees and

expenses, indemnification costs, investment expenses such as brokerage commissions or mark-ups,
research fees and expenses, interest on margin accounts and other indebtedness, borrowing charges on
securities sold short, custodial fees, prime brokerage fees and expenses, withholding taxes and any other
reasonable expenses related to the purchase, sale or transmittal of Fund assets.

In addition to the expenses related to the operation of the Funds, the Funds will also pay all expenses
related to offerings of Interests, except that any fees payable to a placement agent will be paid by
LakeWater or the General Partner. Investors/shareholders should refer to the respective Fund offering
documents for a complete description of fees and compensation.

Clients in separately managed accounts are also responsible for the fees and expenses charged by
custodians and imposed by broker dealers, including, but not limited to, any transaction charges imposed
by a broker dealer with which an independent investment manager effects transactions for the client’s
account(s).

Item 7: Types of Clients
As disclosed in Item 4, LakeWater provides investment management services to private funds and
separately managed accounts. Generally, the minimum initial investment for the LakeWater Total Return
Opportunity Fund is $500,000 and $5,000,000 for the LakeWater Strategic Credit Offshore Fund. The
minimum initial investment for separate accounts managed using LakeWater’s risk-adaptive asset
allocation strategy is $250,000. However, LakeWater or its affiliates reserve the right to accept lesser

amounts as long as the investor qualifies to invest based on all other suitability and regulatory
requirements.

LakeWater may decline to accept a proposed investment even if the proposed investor satisfies such
suitability and regulatory requirements. LakeWater has discretion to accept additional capital contributions
in different amounts from one or more investors without notifying the other investors and, in certain cases,
has entered into such arrangements with certain investors.