Merit Fund Advisors LLC

Item 5          Fees and Compensation

A.       Fees

Investors are directed to consult the applicable Fund’s private offering materials and/or governing
agreements (including, without limitation, such Fund’s limited liability company agreement or similar
organizational document) for the specific fees paid by such Fund. These fees vary by Fund and may be
different for future Funds. In all cases investors in a Fund agree to such fees in writing prior to making an
investment in such Fund. From time to time and under certain circumstances, fees payable by a particular
investor in a Fund (including the fees described in this Item 5) may be adjusted after negotiation between
such investor and the applicable Fund Manager via a side letter or other agreement executed by such Fund
and such investor.

In general, fees earned by MFA or MFA Affiliates from the Funds consist of the following:

        Each Fund generally pays a management fee to MFA or an MFA Affiliate.

            o   Fenwick Funds: Certain Fenwick Funds pay a management fee to their respective Fenwick
                Fund Manager equal to a percentage (currently in the 1.5% to 2% range) of the total capital
                commitments of such Fenwick Fund’s investors. Not all Fenwick Funds pay a
                management fee at this time.

            o   StoneRiver Funds: All StoneRiver Funds pay to its StoneRiver Fund Manager an annual
                asset management fee equal to a percentage (currently in the 1.5% to 1.75% range) of
                invested capital contributions of such StoneRiver Fund’s investors, but such range and
                structure of asset management fees could vary for future StoneRiver Funds.

        MFA receives an investment management fee for its investment advisory services for each Fund.
         A Fenwick Fund Manager or a StoneRiver Fund Manager, as applicable, pays the investment
         management fee (generally from a portion of the management fee received from a Fund) to MFA
         under the investment management agreement executed for a Fund. Certain Funds may pay the
         investment management fee directly to MFA.

        A performance allocation (or “carried interest”) is generally payable by each Fund to an
         MFA Affiliate.

            o   Fenwick Funds: The Fenwick Fund Manager of certain Fenwick Funds (or an affiliate
                thereof) may be entitled to receive a carried interest. The performance fee generally is
                equal to 20% of the profits of the Fund. For some Fenwick Funds, the carried interest is
                not payable until investors receive a return of their capital and a preferred return, and this
                is fully described in the particular Fenwick Fund’s governing documents. Not all Fenwick
                Funds pay a carried interest at this time.

            o   StoneRiver Funds: Each StoneRiver Fund will pay a carried interest to its StoneRiver Fund
                Manager or an affiliate thereof. The carried interest is a percentage of all profits (usually
                in the 20% to 30% range, but such range could vary for future StoneRiver Funds depending
                on their investment strategies) distributed by a StoneRiver Fund after (i) its investors
                receive a return of all contributed capital and (ii) such StoneRiver Fund achieves one or
                more specified internal rate of return hurdles. A StoneRiver Fund may impose different
                carried interest percentages or internal rate of return hurdles depending on the capital
                commitment provided by such investors (e.g., after all capital is returned and the preferred

                 return is paid, certain StoneRiver Fund investors with higher capital commitments could
                 receive a higher percentage of distributions than those investors with a smaller capital
                 commitment), which different carried interest percentages would be spelled out in the
                 StoneRiver Fund’s organizational documents or under a side letter with such investor(s).
                 The carried interest percentage and internal rate of return hurdles applicable to a
                 StoneRiver Fund are fully described in each StoneRiver Fund’s governing documents, as
                 the same may be adjusted from time to time via a side letter with a StoneRiver Fund
                 investor.

        The Funds may also (i) pay an acquisition and/or disposition fee to MFA or an MFA Affiliate for
         services provided to a Fund for a particular Fund investment and (ii) reimburse MFA and/or an
         MFA Affiliate for costs incurred in connection with a particular Fund investment, including
         diligence costs, legal fees, offering and organizational costs and other pre-closing costs. Such fees
         and reimbursable costs, if applicable, are approved under a Fund’s governing documents. Certain
         Funds may cap the organizational costs that are reimbursable to MFA and/or an MFA Affiliate, as
         set forth in such Funds’ governing documents.

        Certain StoneRiver Funds pay one or more of the following fees to MFA Affiliates: (i) a
         construction management fee equal to a percentage (generally around 5%) of any rehabilitation or
         construction costs in connection with the construction or rehabilitation of a multifamily real estate
         asset, (ii) a development fee equal to a percentage (generally around 5%) of the total development
         costs in connection with the development of a new multifamily real estate asset, or (iii) a
         construction guarantee fee equal to a percentage (generally not to exceed 1%) of the principal
         amount of any construction financing if a StoneRiver Fund Manager or affiliate thereof executes
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Item 7           Types of Clients

MFA provides investment advisory services to the Funds as its sole clients. Each of the current Funds is a
pooled investment vehicle sponsored and/or controlled by an MFA Affiliate. Ownership interests in the
Funds are offered privately only to qualified investors, typically (i) individuals or entities who qualify to
invest in the Funds because they have a sufficiently high income or net worth to qualify as an “accredited
investor” and a “qualified client” (as such terms are defined in the applicable US securities laws), (ii) family
offices and (iii) institutional investors. Future StoneRiver Funds may also require certain investors to be
“qualified purchasers” (as such term is defined in the applicable US securities laws). The Funds also may
offer investment opportunities to its and the other MFA Affiliates’ qualified professional personnel, as well
as other qualified institutions or individuals that have a pre-existing relationship with an MFA Affiliate or
offer expertise or other assistance with respect to a particular investment area or portfolio investment. MFA
Affiliates will also directly or indirectly invest in the Funds from time to time.

MFA and the Funds typically impose a minimum investment amount on prospective Fund investors to
become a member of a Fund, usually in the $250,000 to $5,000,000 range; provided, however, MFA and
the Fund’s manager or managing member (a StoneRiver Fund Manager or Fenwick Fund Manager, as
applicable) often have discretion to lower and/or waive the minimum investment amount for potential Fund
investors. The specific minimum investment amount for each Fund’s investors is included in such Fund’s
offering documents.

MFA does not manage any accounts other than the Funds and, therefore, does not have any requirements
for opening or maintaining accounts.