Forest Investment Associates LP

Item 5 – Fees and Compensation
Clients pay FIA fees based on various measures of asset value. Fees are subject to negotiation and may vary from client
to client to reflect circumstances that apply to specific clients. The fee schedule, with any applicable terms and
conditions, is stated in each client’s Investment Management Agreement or Limited Partnership Agreement.

Separate Accounts
Fees are charged in arrears based on the value of the portfolio at the end of the quarter. Procedures for valuing portfolios
are discussed in greater detail in Item 12. FIA’s fee structure is based on one or more of the following components:

        1.)      Management fee based on a percentage of assets under management (either at market value or cost);
        2.)      Management fee based on a fixed, flat fee;
        3.)      Acquisition fee based on a percentage of the purchase price of a property;
        4.)      Incentive performance fee (see Item 6 below); or
        5.)      Disposition fee based on a percentage of the sales proceeds from a property.

FIA’s fees include only the cost associated with the investment advisory services offered. Clients are responsible for all
expenses incurred associated with management of the property, including but not limited to, timber sale expenses,
property taxes, land appraisals, and all other costs associated with forest operations and administration.

Clients may, but are not required to, grant FIA the authority to directly pay its advisory fees from the clients’ cash
accounts. Clients receive invoices from FIA stating the amount of the fee paid from their cash account.

Clients may terminate management of their portfolio by written notice at any time, subject to any specific terms and
conditions stated in the Investment Management Agreement. Any such termination will not affect either party’s status,
obligations or liabilities.

Private Funds
Investment advisory fees and other expenses incurred by the Funds are described to investors, in detail, in each Fund’s
Private Placement Memorandum. Fund fees vary depending on the nature of the services provided and the investment
strategy utilized but generally include: (1) a management fee, based on the value of assets in the Funds (at either market
value or cost); and (2) and incentive fee equal to a percentage of capital appreciation above a prescribed hurdle rate of
return. With respect to incentive fees, any losses are carried forward so that no incentive fee is charged unless the
losses have been recouped, subject to certain adjustments. Management fees for Private Funds are payable quarterly
in arrears. Incentive fees, if earned, are paid through an annual allocation of profits from each limited partner’s capital
account into the general partner’s capital account at each prescribed measurement point.

Specific procedures and restrictions apply to withdrawals and terminations, as described in each Fund’s Private
Placement Memorandum.

Clients generally will pay all reasonable expenses made on behalf of the Fund or separate account, including without
limitation: (1) legal fees, costs and expenses, including travel, relating to the acquisition, disposition, improvement,
maintenance and repair of investment properties; (2) ad valorem and real property taxes on investment properties; (3)
audit, accounting and bookkeeping fees, expenses attributable to outsourced automated reporting systems and other
outsourced “back-office” support functions; (4) fees and expenses of independent appraisers engaged to value
investment properties; (5) premiums for general liability insurance on investment properties; and (6) reasonable fees
and expenses of any trustee or custodian for the safekeeping of cash, securities or properties; (7) broker’s commissions;
(8) fees and expenses paid to independent contractors, engineers and consultants engaged in connection with the
acquisition or sale of investment properties, field service providers and other agents; (9) expenses related to annual
meetings and any special meetings of the limited partners; and (10) expenses of any investor board, if applicable. None
of these expenses shall be included in or deducted from the Management Fee.

Item 7 – Types of Clients
Forest Investment Associates provides timberland investment portfolio management services to commingled funds and
separately managed account clients.

The minimum account sizes for each of the advisory services offered appear below. FIA reserves the right to reduce
these minimum requirements at its discretion.

         Separate Accounts                                                         $50,000,000
         Private Funds (see Private Placement Memoranda)                            $5,000,000