Chatham Asset Management LLC

Item 5. Fees and Compensation
Management and Performance Fees

Open-end Fund

The Open-end Fund pays an annual management fee of 1.5% based on the fund’s assets and in
accordance with the fund’s specific limited partnership agreement. The management fee is paid
quarterly in advance. In addition, at the end of each fiscal year the fund pays a 20% performance
fee to CAM based on the net increase of the Open-end Fund’s value subject to a highwater
mark.

Closed-end Funds

The Closed-end Funds pay an annual management fee of 0.75% - 1% per annum based on
each limited partner’s capital contributions. Following the end of the fund’s investment period, the
general partner will distribute all cash proceeds (less a holdback for any future expenses or
liabilities of the partnership). At such time, the funds will pay CAM through its ownership of
the general partner a profits interest. This profits interest will be equal to 20% of proceeds after
100% of all limited partner capital contributions have been returned and after the limited
partners realize a preferred annual return of 5%. After the preferred annual return is met, CAM
will receive all distributions until it has received 20% of the cumulative amounts distributed.
Then, all remaining distributions will be shared 80% to limited partners and 20% to CAM.

Fees may be waived or reduced, at the sole discretion of CAM, such as for employees of CAM
and their family members and certain large or strategic investors in the Chatham Funds. Any
prepaid management fees that are collected in advance for the Chatham Funds will be rebated
on a pro-rata basis to any investor upon withdrawal from the Chatham Funds, as applicable.

Any transaction fees, directors’ fees, consulting fees, monitoring fees, break-up fees or any other
similar fees paid to or receivable by CAM or its affiliates shall offset and reduce the amount
of the management fees otherwise payable to CAM. To the extent that CAM is fully offset during
a particular quarter, any excess other fees, as defined in the limited partnership agreement, shall
serve to offset the management fee for subsequent quarters until the full amount of the other fees
have been applied to offset the management fee.

CLOs

With respect to the CLO, and any additional CLOs CTM may manage in the future, CTM will
receive an annual account management fee based on the assets under management for each CLO,
which is paid quarterly in arrears. The management fee is typically split between a senior
management fee and a subordinated management fee. The CLOs will pay the management fee
from cashflow generated by the CLO investments. The senior management fee is payable from
the cashflow on a priority basis (i.e., prior to payment of debt service on the notes issued by the
CLO) and the subordinated management fee is payable on a subordinate basis (i.e., after
payment of debt service on the notes issued by the CLO).

CTM may also receive performance compensation based on the cashflow generated by the CLO

in excess of a hurdle.

CLO investors and prospective investors should refer to the relevant offering circular for
information regarding the fees associated with any CLO issued by CTM. The fee schedule with
respect to the CLOs is not negotiable.

Additional Fees and Expenses

In addition to management fees, performance fees, and profits interest, Clients will bear
various fees and expenses in accordance with their governing documents. Those fees and
expenses as contractually determined include, but are not limited to, fees associated with fund
administration, prime brokerage, legal and accounting, taxes, and commissions and brokerage.
Additionally, the Chatham Funds and Investor Funds will pay legal; auditing; accounting
(including out-sourced accounting and accounting software); pricing services and other
professional expenses; administration expenses; research expenses (including research related
travel costs); broken-deal fees and expenses (including related legal fees); investment expenses
such as commissions; interest on margin accounts and other indebtedness; custodial fees; filing
fees; bank service fees; Chatham Fund-related insurance costs (including D&O and E&O
insurance for the management company and the General Partner); expenses of regulatory
compliance, filings and reporting (including but not limited to Form PF, Section 13 and 16 filings)
to the extent they are in connection with, relate to or derive from the Chatham Funds or its
investment activities; and other expenses related to the purchase, sale or transmittal of Chatham
Fund assets.

Certain of the Chatham Funds will bear the cost of fees payable to Forza Investment Group, LP,
Churchill Advisors and/or any of their respective affiliates (collectively, the “Forza Entities”).
In particular, certain Chatham Fund portfolio investments will be indirectly owned through the
Chatham Fund’s future investment in a financing vehicle managed by Forza Investment Group,
LP (the “Forza Financing Vehicle”) as investment in the Forza Financing Vehicle will enable
each Chatham Fund to obtain more favorable borrowing terms than the borrowing terms being
offered (if any) by the fund’s prime brokers or other third-party lenders. As consideration for
managing the Forza Financing Vehicle, Forza Investment Group, LP will receive a management
fee based on the notional long market value of the investments therein (the “Forza Financing
Vehicle Management Fee”). Further, the Chatham Funds or CAM on their behalf may engage
one or more of the Forza Entities from time to time in the future to provide certain consulting
or other services related to the Chatham Funds’ portfolio. While Chatham believes that the
arrangement with the Forza Entities will provide value to the funds and that any additional
services engagements with the Forza Entities in the future may similarly provide value to the
funds, such engagements with the Forza Entities constitute a conflict of interest for Chatham
...

Item 7. Types of Clients
Chatham’s Clients consist of private funds that are pooled investment vehicles and certain investor
funds for large institutional investors. In addition, Chatham serves as a sub-adviser with respect
to certain assets of a pooled investment vehicle sponsored by an unaffiliated investment adviser.
Chatham also manages a special purpose entity that functions as a CLO. Chatham may in the
future also serve as investment manager to other client accounts.

Chatham provides investment advisory services to its Clients. Investment advice is provided
directly to each Client, subject to the direction and control of the General Partner for the domestic
Chatham Funds and the Board of Directors for offshore Chatham Funds, and not individually to
the limited partners or shareholders of the Chatham Funds or to the noteholders of the CLO.
Investors in Chatham’s Funds typically include, but are not limited to, high net worth individuals,
pension plans, endowments, foundations, and corporate or business entities. Noteholders of the
CLO must also meet certain eligibility requirements.

The details concerning applicable investor suitability criteria are set forth in each Client’s
respective offering documents. Although Chatham and/or its affiliates have the authority to accept
subscriptions for lesser amounts, the minimum investment in the Chatham Funds is generally $1
million. Each investor is required to meet certain suitability qualifications, such as being an
“accredited investor” and “qualified purchaser” within the meaning set forth under the United
States federal securities laws.