Alta Fundamental Advisers LLC

Item 5 – Fees and Compensation

AFA’s fee structure for the AFA Funds and Separately Managed Accounts are as follows:

Management Fee
AFA receives a management fee (“Management Fee”) from the AFA Funds, payable quarterly in
advance, generally in the range of 0.00% to 0.50% (0.00% to 2.00% per annum) of the net asset
value of the relevant shares or interests in each Fund on the first day of that quarter.

Some Separately Managed Accounts pay a Management Fee which is based on a percentage of
assets under management. AFA separately negotiates the annual management fees charged for the
management of each Separately Managed Account, which will vary but generally are in the range
from 0.00% to 2.00% of net assets per annum. Fees are typically paid quarterly, unless otherwise
agreed upon in the investment management agreement.

Any unearned Management Fees are refunded by AFA to the Clients withdrawing from a Fund or
Separately Managed Account prior to the completion of the applicable term for such Management
Fee. The Management Fee may be reduced, waived or calculated differently with respect to certain
Clients including employees and affiliates of AFA.

Incentive Allocation or Fee
An affiliate of AFA receives an incentive allocation (“Incentive Allocation”) from the Funds
generally in the range of 10% to 20% of net appreciation (including both realized and unrealized
gains and losses) on an annual basis, subject to the recovery of any amount in the loss recovery
account (i.e., a high-water mark). The Incentive Allocation is also calculated and payable at the
time of an investor’s withdrawal or redemption with respect to the amount withdrawn. With respect
to those investors in the AFA Funds that have elected to participate in the special investments
(“Side Pocket Investments”) of the AFA Funds, an Incentive Allocation with respect to those
Side Pocket Investments will only be made with respect to any realized net appreciation.

Some Separately Managed Accounts pay an Incentive Allocation (or performance-based fee)
generally in the range from 10% to 20% of annual net appreciation, which Incentive Allocation
may or may not be subject to investment thresholds. Incentive Allocations are based upon the
valuation methodology agreed to with each Client.

The Incentive Allocation may be reduced, waived or calculated differently with respect to certain
investors in the Funds including employees and affiliates of AFA.

Expenses
AFA is responsible for and will pay all of its internal operating and overhead expenses, including
all costs of its personnel, office space, office equipment and supplies.

In addition to the Management Fee and Incentive Allocation or fee described above, each Client
shall bear its own investment and operating expenses. Such expenses vary by Fund or Separately
Managed Account and generally include, but are not limited to, legal, auditing, accounting and
administration fees and all other expenses of the Fund or Separately Managed Account, including,
without limitation, due diligence expenses, custodian fees, taxes on securities transactions, interest
on borrowed money, brokerage fees and commissions and any other similar fees, clearing expenses
or other fees and expenses. The Funds and Separately Managed Accounts may invest in Exchange
Traded Funds or other similar closed end funds, through which the Funds and/or Separately
Managed Accounts may incur additional underlying costs and expenses. For a more exhaustive
list of expenses paid by the Funds and Separately Managed Accounts, please see the Offering
Documents.

Certain of the Fund’s expenses may be subject to expense caps as further detailed in the Offering
Documents for the relevant Fund. Any expenses incurred on behalf of more than one Client
account will be allocated amongst such accounts in proportion to their respective participation in
the relevant investment, in proportion to their respective net asset values, or in any manner
determined by AFA to be fair and equitable to each Client. The organizational and initial offering
expenses of the Funds will either be expensed as incurred or, where permitted by applicable rules,
amortized over a period not to exceed 180 months beginning at the commencement of the Master
Fund’s operations. Expenses that are paid or payable by the Master Fund generally are borne pro
rata by the Feeder Funds.

Prospective investors in the Funds should refer to the relevant Fund’s Offering Documents for a
more complete understanding of how AFA is compensated for its advisory services. The
information contained in this Item 5 is a summary only and is qualified in its entirety by the
relevant Fund’s Offering Documents.

Item 7 – Types of Clients

AFA provides discretionary investment advisory services to Clients. Investors in the AFA Funds
are generally required to invest a minimum of $5,000,000; provided that AFA or one of their
affiliates, in its sole discretion, may accept investments in an amount less than $5,000,000.

The AFA Funds are not registered as investment companies under the U.S. Investment Company
Act of 1940, as amended (the “Investment Company Act”), and are, therefore, not subject to
various provisions of the Investment Company Act. Investments in the Funds are not registered
for sale under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and are instead
sold to qualified investors on a private placement basis. Subscriptions will generally be accepted
only from investors who meet the definitions of “Accredited Investor” under Regulation D
promulgated under the Securities Act, and “Qualified Clients” eligible to pay performance fees
under the Advisers Act and a “Qualified Purchaser” as defined in Section 2(a)(51)(A) of the
Investment Company Act.