Waterequity LLC

ITEM 5 – FEES AND COMPENSATION
5.A. and B. Description of Compensation and Fee Payments

The fee schedules for the Funds vary and are described in detail in each respective Fund’s offering
memorandum or other governing document (as applicable). WaterEquity charges all Funds a management
fee. In addition to management fees, some Funds pay acquisition and monitoring fees. In addition to a
management fee, one Fund pays a performance fee instead of acquisition and monitoring fees. The types
and ranges of fees assessed by the Manager are described below:

    ▪   Management fees in a range of 1.75% to 2% per annum;

    ▪   Acquisition fees in an amount equal to 1.2% of each fund investment (at cost) for due diligence,
        evaluation, preparation, and processing of the investment;

    ▪   Monitoring fees in an amount equal to 0.2% per annum on the aggregate amount of outstanding
        loans (at cost) for maintaining and monitoring the investment; and

    ▪   Performance fees in an amount equal to 20% of the sum of distributions after meeting an
        aggregate amount equal to 6% cumulative internal rate of return on capital contributions,
        compounded annually (the “Preferred Return”).

The Manager bills Advisory Clients for management and other fees and expenses on a quarterly basis in
accordance with the Investment Management Agreement.

5.C.    Description of Other Fees and Expenses

In addition to the fees described above, the Funds (and therefore, Fund investors) will also be subject to
other costs and expenses related to such Fund’s activities. Such costs and expenses may include but are
not limited to:

    ▪   operating expenses including of a Fund;
    ▪   fees, costs, and expenses relating to investments, including the buying, structuring, negotiating,
        acquisition, holding, monitoring, operating, restructuring, selling and disposition thereof;
    ▪   brokerage commissions, transactional fees and expenses, interest and other borrowing costs, and
        external research expenses;
    ▪   custody and transfer fees, depositary fees, expenses of record-keeping, accounting and similar
        services;
    ▪   impact verification costs;
    ▪   reasonable investment-related travel-related expenses, reasonable lodging, meal and
        entertainment expenses;
    ▪   expenses related to preparing and filing any reports to regulatory authorities relating to a Fund’s
        investments, any fees and expenses associated with compliance or regulatory matters related to a
        Fund and its investments;
    ▪   the costs of proxy or corporate control contests, fees and other costs associated with any joint
        venture investments;
    ▪   the costs of any litigation, arbitration, mediation or other proceeding related to a Fund’s
        investments;
    ▪   fees and expenses of placement agents for securities purchased or sold by a Fund (except
        partnership interests);
    ▪   filing, title, transfer, registration and other similar fees and expenses;
    ▪   insurance premiums, indemnification expenses and fees and expenses of banks, custodians,
        administrators, legal counsel, independent public accountants, external valuers and appraisers of
        illiquid assets, providers of tax-related expenses;
    ▪   costs of meetings with investors and Advisory Committees, costs of preparing reports for investors
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           and Advisory Committees, and reasonable out-of-pocket expenses of an Advisory Committee;
       ▪   costs associated with the preparation, reproduction and mailing of annual financial statements;
       ▪   costs of a Fund’s tax returns;
       ▪   all expenses incurred in connection with any tax audit, investigation, settlement or review of a Fund;
       ▪   any taxes, fees or other governmental charges levied against a Fund or its income or assets
           (subject to such exceptions as may be expressly set forth in a limited partnership agreement);
       ▪   expenses relating to the formation, organization and operation of any alternative investment vehicle
           or holding vehicle;
       ▪   costs incurred in relation to any amendments to, and waivers, consents or approvals sought
           pursuant to a limited partnership agreement;
       ▪   expenses incurred in relation to a Fund that are classified as extraordinary items in accordance
           with U.S. generally accepted accounting principles, if any;
       ▪   expenses relating to defaults by investors with respect to capital contributions;
       ▪   costs relating to protecting the confidential or non-public nature of any information or data;
       ▪   costs relating to winding up or liquidating a Fund;
       ▪   administrative expenses of a Fund such as the costs of the annual audit and legal and accounting
           expenses;
       ▪   any of the foregoing expenses, costs and liabilities incurred in connection with the operation of
           feeder funds; and
       ▪   any other fees, costs, expenses, liabilities or obligations approved by an Advisory Committee.

5.D.       Payment of Fees in Advance

One Advisory Client pays its management fee quarterly in advance based on a percentage of the investors’
commitments until the end of the commitment period. Thereafter, the management fee percentage is applied
to the investors’ allocable share of the cost basis of investments held by a Fund.

If the Manager’s services to an Advisory Client are terminated prior to the end of the period in respect of
which fees have been paid in advance, the fees are generally returnable to investors in the relevant Fund.

5.E.       Compensation for Sales of Securities

WaterEquity supervised persons do not accept any compensation for the sale of securities or other
investment products.

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ITEM 7 – TYPES OF CLIENTS
WaterEquity provides investment advisory services to pooled investment vehicles operating as Funds.

Each investor in a Fund must meet certain eligibility provisions. Partnership interests in each Fund are
offered to U.S. investors who are (i) Accredited investors within the meaning of Regulation D of the
Securities Act of 1933, as amended (“Accredited investors”), (ii) Qualified Purchasers within the meaning of
Section2(a)(51) of the Investment Company Act of 1940, as amended (“Qualified Purchasers”), or (iii)
“Knowledgeable Employees” under Section 3c-5(a)(4) of the Investment Company Act of 1940, as
amended (“Knowledgeable Employees”). Partnership interests are also offered to non-U.S. investors.

Subscriptions in Funds managed by WaterEquity are subject to a minimum investment amount of $500,000
to $1,000,000. The Manager may waive such minimum requirements in its sole discretion.

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