The Molpus Woodlands Group LLC

Item 5 Fees and Compensation
All separate account fees are subject to negotiation. The specific manner in which separate account
fees are charged by MWG is established in a client's written agreement with MWG. Fees for MWG-
sponsored funds are set forth in Fund documents, including the Fund limited partnership agreements
and timberland investment advisory and management agreements. MWG will generally bill its fees on
a quarterly basis in arrears. Separate accounts and Funds initiated or terminated during a calendar
quarter will be charged a prorated fee. Upon termination of any separate account or Fund, any prepaid,
unearned fees will be promptly refunded, and any earned, unpaid fees will be due and payable. Fees
and costs for both Fund clients and separate account clients may include the following (not all clients
pay the same fees at the same rates, as many of these fees are subject to negotiation):

Management Fee: In consideration of the services in managing the Funds, Fund clients (and, in some
instances, separate account clients utilizing MWG or an affiliate to serve as general partner) will pay to
the MWG-affiliated general partner a per annum management fee (the "Management Fee"). Such
Management Fee is subject to negotiation and may be lower for certain limited partners in a Fund,
based on relevant business considerations with the discretion of the Adviser. The Management Fee is
initially based on called capital plus any leverage utilized for a set period and a percentage of fair
market value thereafter. Fair market value is determined annually pursuant to the appraisal process
set forth below. The Management Fee will be payable quarterly in arrears. The Adviser may cause the
Funds to pay such Management Fee directly to the General Partner from the assets of the Funds.

Valuation of Fund or separate account assets in order to determine the amount of the Management
Fee presents an inherent conflict of interest between the Adviser and the Funds and/or separate
account clients, given that the Management Fees payable to the Adviser are determined based on
Fund/separate account assets. The Adviser has attempted to address this conflict by including
provisions in the Fund documents and separate account agreements that require the Adviser to obtain
a comprehensive appraisal of the assets by an independent appraiser at least once every three (3)
years. In years that an independent appraisal is not conducted, the prior year's appraisal is updated by
such independent appraiser. The fair market value determined for such assets may be adjusted by the
Adviser for acquisitions and dispositions of assets as well as for timber growth and harvest during any
interim periods between appraisals or appraisal updates.

Carried Interest: Once limited partners in a Fund (or a separate account client utilizing a carried
interest structure) have received a return of their capital contributions plus an established annual return
amount, the general partner receives a negotiated amount of future distributions (usually 15%), with
the limited partners receiving the remainder of such distributions.

Incentive fee: MWG has negotiated an incentive fee payment structure with certain separate account
clients who have not agreed to a carried interest structure. The incentive fee payable is based on
payment for increases in asset value above established thresholds. As with the Management Fee
structure, the incentive fee payment is subject to a conflict of interest based on asset valuation, which
the Adviser has addressed through the independent appraisal requirement set forth above.

Harvesting Supervision: A fee consisting of a percentage of harvesting revenues.

Administration cost: Generally, charged as a flat dollar amount per acre per year, which pays for the
forestry planning employees and support staff employed by MWG, such as accountants and computer
support. However, this Administrative fee does not cover all Adviser-related employee costs, as
detailed below.

Acquisition cost: A fee consisting of a percentage of the purchase price of a timberland property.

Disposition fees: A fee consisting of a percentage of the sales price on higher and better use (HBU)
transactions.

Other costs: Other direct expenses may be billed at cost with no markup or at market rates. These
are typically services that the Fund or separate account contracts, such as bulldozer work on roads,
and fire lanes, painting landlines, spraying and aircraft fertilizing operations. Also, forestry employees
of MWG or its affiliates may supervise these activities, with MWG reimbursed for such activities at
either cost or market rates, as provided in the respective Fund or separate account agreements. MWG
believes these direct expenses have historically cost about $10.00 per acre per year.

Item 7 Types of Clients
MWG acquires, manages, and sells timberland as an investment vehicle for pooled investment
vehicles, pension funds, college endowments, foundations, insurance companies, and high net-worth
individual investors. The company focuses on ensuring long-term optimum cash returns on
investments while practicing responsible forest stewardship. MWG has account minimums that vary
depending on the type of investment.