Peak Rock Capital LLC

ITEM 5. FEES AND COMPENSATION

        The General Partner of a Fund generally receives a Management Fee (as defined below)
and a carried interest in connection with advisory services. The General Partners or other Peak
Rock entities or affiliates receive additional compensation in connection with management and
other services performed for portfolio companies of the Funds and such additional compensation
may offset in whole or in part the Management Fees otherwise payable to Peak Rock, as described
in the Governing Documents. Investors in the Funds also bear certain fund expenses, as described
below. With certain limited exceptions, the Executive Fund, which is formed to allow principals
and employees of Peak Rock and its affiliates, as well as certain other persons, to invest in certain
portfolio investments alongside other Funds, generally does not pay a Management Fee or carried
interest to its General Partner, as described in the Executive Fund Governing Documents.

       The following is a general description of fees, compensation and expenses of the Funds.
Differences may exist among Funds, and certain Funds do not charge certain fees, compensation
or expenses that other Funds charge. Prospective and existing Fund investors should review a
Fund’s Governing Documents for details regarding its terms, including fees, compensation and
expenses.

Management Fees

        During a Fund’s investment period, the Fund generally will pay the relevant Management
Company an annual management fee (the “Management Fee”) equal to 1.5 to 2.0% of the fee-
bearing limited partners’ aggregate capital commitments, as more fully described in the applicable
Governing Documents. Payment of the Management Fee will be made quarterly in advance.
Generally, investors participating in a closing after a Fund’s initial closing date bear the
Management Fee from the initial closing date, generally in addition to an interest component
payable to Peak Rock or an affiliate, plus an additional amount, as applicable. The Management
Fee may be reduced upon the expiration of the investment period or earlier upon the occurrence of
certain other events as described in the applicable Governing Documents.

       The Management Fee that Credit Fund III generally pays to the relevant Management
Company will be based on a measure of Credit Fund III’s invested capital (as further specified in
the Governing Document of Credit Fund III), which generally includes (i) with respect to debt
investments, amounts actually funded, amounts committed but not funded, accreted market
discounts and interests acquired with indebtedness, other than such investments that have been
disposed of or permanently written down, and (ii) with respect to equity investments, the fair
market value of such investments, other than such investments that have been disposed of.

        The Management Fee generally will be reduced by a percentage of the fee-bearing limited
partners’ portion of directors’ fees, financial consulting fees, monitoring fees, advisory fees, break-
up fees or other fees with respect to consummated or unconsummated Fund transactions paid to
the relevant Management Company, as discussed in the Governing Documents. As a general
matter, Management Fees will be payable during term extensions unless otherwise agreed with
investors.

        With respect to certain Funds, the Governing Documents provide that such Fund’s
Management Fees will be calculated and charged on a basis that generally is not tied to the Fund’s
then-current net asset value. As further specified in the Governing Documents, from the effective
date of the relevant Fund until a date specified in the Governing Documents (the “Stepdown
Date”), Management Fees generally will be charged based on a formula tied to the amount of the
relevant Fund’s aggregate Commitments. Further, after the Stepdown Date, Management Fees
generally will be charged and calculated based on a formula tied to the amount of investment
contributions (including, where applicable, a Fund borrowing component (including interest
expenses) and the amount of any capitalized supplemental fees or expenses) made to the relevant
Fund relating to investments that have not been realized or permanently written down. “Impaired
Value Investments” means investments that have been permanently written down. Credit Fund
III does not have a Stepdown Date. Due to differences in the criteria set forth in their respective
Governing Documents, in the event where more than one Fund participates in an investment, there
is the possibility that an investment will become an Impaired Value Investment for purposes of
one Fund’s Governing Document but not those of one or more other Funds.

         Under the Governing Documents and except with respect to certain investments in Credit
Fund III, where the fair market value of an investment exceeds the total amount of investment
contributions relating to such investment, post-Stepdown Date Management Fees will not be
calculated based upon such appreciated value, and will instead continue to be calculated based on
the amount of applicable investment contributions, except in the case of permanent write downs.
Following such events and after the Stepdown Date (and at any time with respect to Credit Fund
III), Management Fees otherwise payable will only be reduced to the extent the fair value of the
relevant investment is lower than the investment contributions relating to such investment.
Conversely, the Governing Documents do not require Management Fees to be reduced or refunded
following the occurrence of a write down, decrease (including a significant decrease) in fair value
or other event not constituting a complete realization, such as a partial sale or disposition,
reorganization, recapitalization (including recapitalizations involving dividends), roll-over
investment in connection with a sale or dividend distribution, except in the case of investments
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ITEM 7. TYPES OF CLIENTS

        Peak Rock provides investment advice solely to its Fund clients, and references throughout
this Brochure to “clients” and to Peak Rock’s related duties to and practices on behalf of its clients
and/or investors should be construed accordingly. Funds may include investment partnerships or
other investment entities formed under U.S. or non-U.S. laws and operated as exempt investment
pools under the Investment Company Act of 1940, as amended (“Investment Company Act”).
The investors participating in Funds generally include individuals, banks or thrift institutions, other
investment entities, university endowments, sovereign wealth funds, family offices, pension and
profit-sharing plans, trusts, estates or charitable organizations or other corporations or business
entities and often include, directly or indirectly, principals or other employees (including through
related personal and family investment vehicles) of Peak Rock and its affiliates, Special
Consultants and other Service Providers retained by Peak Rock or a Fund, as well as executives of
portfolio companies.

        The Funds generally have a minimum investment amount of $5 million for third-party
investors. Generally, investors must be “accredited investors” as defined under Regulation D of
the Securities Act of 1933, as amended, and may also be required to be either “qualified
purchasers” or “knowledgeable employees” as defined under the Investment Company Act. The
General Partners generally are permitted to waive such minimum investment amounts and
qualification requirements.