TowerBrook Capital Partners LP

Fees and Compensation
Each Partnership is governed by a limited partnership agreement (“LPA” and, together with any
applicable private placement memoranda and other offering and/or organizational documents, the
“Governing Documents”) that sets forth in detail the fee structure relevant to such Partnership. The
terms of the Governing Documents are generally established during the fundraising period of the
applicable Partnership and may be amended thereafter consistent with the terms of the Governing
Documents.

Pursuant to a Partnership’s Governing Documents, an affiliate of TowerBrook is entitled to
compensation for its services in the form of an annual management fee payable quarterly in
advance by the Partnership. The management fees payable by the Partnerships vary, and are
generally based on either (i) during the investment period, a percentage of the Partnership’s capital
commitments, and thereafter based on a percentage of capital invested, or (ii) during the life of the
Partnership, a percentage of its capital invested. As of the date of this brochure, the maximum
asset-based management fee payable by a Partnership is based on a rate of 2.0% per year of capital
commitments.

Certain of the Governing Documents provide that a Partnership’s management fees will be
calculated and charged on a basis that generally is not tied to the Partnership’s then-current net

asset value. As further specified in the Governing Documents, from the effective date of the
relevant Partnership until a date specified in the Governing Documents (generally representing the
earlier of the end of the Partnership’s defined investment period and the date the relevant general
partner (or an affiliate thereof) first begins receiving or accruing management fees from another
Partnership meeting certain criteria) (the “Stepdown Date”), management fees generally will be
charged based on a formula tied to the amount of the capital commitments of the limited partners.
Further, after the Stepdown Date, management fees generally will be charged and calculated based
on a formula tied to the aggregate capital contributions made by the limited partners with respect
to investments that have not been realized (as reduced by the amount by which any investments
have been written down and have not subsequently recovered in value (up to the aggregate cost
basis)).

As a result, the amount of management fees generally will not correspond with fluctuations in the
Partnership’s net asset value, including following the investment period, other than when reduced
by amounts for which any investment has been disposed of, written down (which for the avoidance
of doubt is permitted to subsequently recover in value pursuant to the conditions described in the
Governing Documents), or in the case of investments permanently written down or completely
written off for U.S. federal income tax purposes (such investments permanently written down or
completely written off for U.S. federal income tax purposes, as applicable under the Governing
Documents, “Impaired Value Investments”). Due to differences in the criteria set forth in their
respective Governing Documents, in the event where more than one Partnership participates in an
investment, there is the possibility that an investment will become an Impaired Value Investment
for purposes of one Partnership’s Governing Documents but not those of one or more other
Partnerships. Except where the Governing Documents expressly provide to the contrary,
management fees will not be reduced (in whole or in part) in the case of partial distributions or
partial sales of investments or in circumstances where the relevant Partnership(s) divest a credit
investment in the relevant portfolio company, whether in whole or in part.

In many circumstances, the fair value component of such post-Stepdown Date management fees
base generally includes capital contributions (which includes, without duplication, borrowings
incurred in lieu of calling capital contributions) and the associated capitalized transaction-specific
fees and expenses, of unrealized investments, including such amounts payable or reimbursable to
TowerBrook or its affiliates, that have not been disposed of or considered as Impaired Value
Investments under the relevant Governing Documents. Further, management fees generally will
not be reimbursed or refunded under the Governing Documents in the event of realizations,
dispositions or partial write-downs that occur partway through the relevant calculation period.

The Governing Documents set forth the full list of terms under which management fees will be
reduced, offset or otherwise be limited, and consequently investors should expect to bear the full
specified management fee rate in the Governing Documents until they are reduced in the
circumstances and on the date(s) specified therein.

TowerBrook affiliates, in their roles as general partners of certain Partnerships, are eligible to
receive a performance-based profit allocation, or carried interest, with respect to realized
investments, which is generally determined as a percentage of profits derived from the disposition
of investments (after taking into account fees, costs and expenses of the Partnership, including
management fees, and following a preferred return to limited partners). If the performance-based

carried interest results in an over distribution of the agreed upon amount of carried interest to a
Partnership’s general partner, the general partner is generally subject to an after-tax “claw back”
arrangement. As of the date of this brochure, the maximum carried interest allocable to a general
partner of a Partnership is 20% of the profits derived from the disposition of investments (after
taking into account fees, costs and expenses of the Partnership, including management fees, and
following a preferred return to limited partners of up to 8% per annum). Notwithstanding anything
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Types of Clients
TowerBrook and its affiliated investment managers provide advisory services to privately offered
funds that generally pursue any of (i) a “control oriented” private equity investment strategy, (ii)
a “non-control oriented” structured opportunities investment strategy or (iii) non-control and
control investments in purpose-driven, mid-sized companies whose business models seek to have
a direct and measurable social and environmental benefit. The Firm also serves as investment
manager to various co-investment vehicles structured to facilitate investments by third party Co-
Investors alongside the Partnerships. In addition, an affiliate of TowerBrook serves as direct
investment manager to liquidating trusts established in connection with the dissolution of certain
former PE Partnerships. No management fees or carried interest is payable by such liquidating
trusts to TowerBrook or any of its affiliates.

The Partnerships may include alternative investment vehicles established from time to time in
order to permit one or more investors to participate in one or more particular investment
opportunities in a manner desirable for tax, regulatory or other reasons. Alternative investment
vehicle sponsors generally have limited discretion to invest the assets of these vehicles independent
of limitations or other procedures set forth in the Governing Documents of such vehicles and the
related Partnership.

Limited partners in the Partnerships may include high net worth individuals, pension plans,
sovereign wealth funds, endowments, foundations, banks, pooled investment vehicles (e.g., funds-
of-funds), trusts, estates or charitable organizations, and corporate or business entities. Investment
advice is provided directly to the Partnerships and not individually to the limited partners.

Details concerning applicable limited partner suitability criteria are set forth in the respective
Partnership’s Governing Documents and subscription materials. Although TowerBrook and/or its
affiliates have the authority to accept commitments for lesser amounts, the minimum commitment
in the Partnerships is generally specified in the limited partnership agreement. Each limited partner
of a Partnership is required to meet certain suitability qualifications, such as being an “accredited
investor” within the meaning set forth in Rule 501(a) of Regulation D under the Securities Act of
1933, as amended, or being a “qualified purchaser” as defined under the Investment Company Act
of 1940, as amended.

As more fully described below, TowerBrook and its affiliates may enter into separate agreements,
commonly referred to as “side letters”, with certain limited partners with respect to the Partnerships
that would have the effect of establishing rights under, altering, or supplementing the terms of, or
confirming the interpretation of, the Governing Documents of the applicable Partnership with
respect to such limited partner, in a manner more favorable to such limited partner than those
applicable to other limited partners in such Partnership. Notwithstanding the foregoing,
TowerBrook’s advisory clients are the Partnerships and not limited partners of the Partnerships.
While limited partners participate in the overall investment program for the Partnerships, agree on
side letters, and in certain circumstances are excused from a particular investment due to legal,
regulatory or other agreed-upon circumstances pursuant to the Governing Documents, such
arrangements do not and will not create an adviser-client relationship between TowerBrook and
any limited partner.

Methods of Analysis, Investment Strategies and Risk of Loss
On behalf of the PE Partnerships, TowerBrook generally pursues control-oriented private equity
investments in large and middle-market European and North American companies. On behalf of
the TSO Partnerships, TowerBrook generally pursues investments in “structured opportunities”.
TowerBrook generally considers “structured opportunities” to be complex transactions
incorporating contractual downside protection that take advantage of changing market conditions
or situation-specific events where traditional control-oriented private equity attributes may not
apply. On behalf of the Delta Partnerships, TowerBrook generally pursues non-control and control
investments in purpose-driven, mid-sized companies whose business models seek to have a direct
and measurable social and environmental benefit.

TowerBrook strives to control its investment risk by staging its capital commitments. In the case
of equity investments by the PE Partnerships, TowerBrook usually requires the initial investment
to have sufficient critical mass to survive as a stand-alone entity, but may seek to identify one or
more add-on acquisitions at the time of the initial investment. Investments by the PE Partnerships
primarily take the form of leveraged buy-outs, leveraged build-ups and distressed situations with
a path to control. The TSO Partnerships invest primarily in not-for-control stressed and distressed
debt and structured equity. The Delta Partnerships make investments in purpose-driven, mid-sized
companies whose business models seek to have a direct and measurable social and environmental
benefit, as described in more detail below.

Buy-outs: TowerBrook pursues, on behalf of the PE Partnerships, buyouts of what TowerBrook
believes at the time of the acquisition to be fundamentally strong businesses in complex situations
and collaborates with corporate sellers to identify divestiture candidates that are not appropriate
for auction. The Firm attempts to identify fragmented industries with favorable economic
fundamentals and long-term growth potential, where companies can be acquired at attractive
valuations.

Distressed Situations with a Path to Control: TowerBrook regards “distress” as a tactical
opportunity for the PE Partnerships to acquire an ownership interest in a viable business at an
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