Monarch Alternative Capital LP

ITEM 5: FEES & COMPENSATION

Clients are generally charged a monthly or quarterly management fee in advance based on the net
asset value of their assets under management with the Adviser, commitments or contributions.
The management fee for certain closed end funds is charged on the lesser of net asset value (gross
of any accrued incentive) or commitments. The Adviser has entered into other arrangements
including charging management fees on the basis of actively invested capital and has previously
charged a commitment fee on undrawn capital commitments, which it may do in the future. Clients
that terminate investment advisory services or investors that are mandatorily redeemed from a
Client before the end of a pre-paid billing period will generally be refunded any pre-paid fees for
the period for which they did not receive services, unless otherwise provided in the Governing
Documents. Management fees for Clients generally range from 0.50% to 1.75% on an annual
basis, and lower fees may be available depending on various factors. Certain closed end funds
may pay no management fees during all or a portion of the fund’s harvest period. Management
fees are allocated for all purposes to investors in Clients that are subject to such fees and are
charged gross of any accrued incentive allocation on the investor capital balance. Furthermore,
Clients are charged a performance allocation or fee that, depending on the applicable terms, may
be taken annually and/or upon distributions. The performance allocation for Clients generally
ranges from 10% to 20% with varying hurdles or preferred return requirements, although the
Adviser may charge higher or lower fees in the future. The performance allocation for open end
Clients is generally based on net capital appreciation at the end of each fiscal year. Any incentive
fee or allocation for open end Clients is also subject to a “net-loss carry forward” provision
whereby a performance allocation or fee is not charged until losses from prior years have been
recouped. The performance allocation for closed end Clients is based on the return to a Client’s
underlying investors and the achievement of a certain preferred rate of return that varies among
Clients and underlying investors. Clients have also negotiated lower fees on certain co-
investments and co-investments offered to certain investors will not bear any fees. In addition,
Third Party Funds have been, and in the future may be, subject to a minimum amount of
management fees for an initial period. As such, underlying investors should consult a Client’s
Governing Documents for a more complete discussion of the management fees and other
compensation arrangements to which such investors are subject.

Each Client’s Governing Documents note the fee and allocation arrangements available to
investors, including any fee breaks based on investment size. Furthermore, the Adviser may permit
Clients to waive, cap, rebate or reduce all or part of the fees or performance allocation with respect
to certain investors without waiving, capping, rebating or reducing the fees or performance
allocation with respect to other investors. Third Party Funds negotiate their fees with the Adviser.
Third Party Funds may also negotiate provisions regarding various expenses such as formation,
audit, administration, custodial or others.

The Adviser is generally granted the discretion to deduct its fees and allocations as incurred;
however, certain Clients, generally Third Party Funds, authorize payment to the Adviser.

As described in particular detail by each Client’s Governing Documents, underlying investors
generally bear the costs and expenses associated with a Client’s formation and the execution of its
investment strategy. Accordingly, by investing in a Client, underlying investors bear the cost of
the organization and offering of such Client and any related feeder funds, master fund and other

special purpose vehicles, including external legal and accounting expenses and out-of-pocket
expenses or disbursements. In addition, investors also bear all expenses relating to a Client’s
operations, and such Client’s pro rata share of the expenses relating to the operation of any master
fund or other vehicles through which it may directly or indirectly invest. Such expenses generally
include, but are not limited to:

•   the management and incentive fee or allocation;

•   fees payable and costs and expenses reimbursed to any third-party alternative investment fund
    manager and general partner or similar entity required for a Client;

•   fees paid to a Client’s administrator, depositary, brokerage agent, custodian and transfer agent;

•   fees paid to professional advisors (including consultants and administrators) regarding tax,
    compliance, accounting, legal, architectural or engineering matters related to the Client
    (including its relationship with each of its investors) or its investments;

•   fees paid to operating partners, collateral managers, asset managers and directors, registered
    office fees, bank service fees, investment or trading related fees, such as Bloomberg terminals,
    brokerage commissions or spreads, prime broker fees or custodian fees;

•   construction management fees, development fees, property management fees, leasing
    commissions, acquisition fees, disposition fees, title fees and other fees and expenses paid to
    title companies, brokerage fees, costs of title insurance and property-related insurance;

•   research expenses (including expenses associated with research-related conferences or
    seminars) consultant, operator or servicer fees, structuring and ongoing costs (e.g., expenses,
    fees and costs of third parties that provide specialized reporting, operational know-how or
    services, data and/or analysis, and in respect of entity formation, servicing and maintenance,
    including as related to directors, executors, or other governance structures or functions,
...

ITEM 7: TYPES OF CLIENTS

The Adviser manages pooled investment vehicles that permit investment only by sophisticated
investors that are typically institutional investors or high net worth individuals. A description of
each Client, including its operation and activities, management fees, performance-based
fees/allocation, where applicable, and structure can be obtained from such Client’s Governing
Documents.

Other than for limited discretion advisory services, the Adviser generally requires that any new
Third Party Fund seeking the Adviser’s exclusive management commit to invest or subscribe for
no less than $100 million. Such Clients are generally required to maintain a minimum amount of
assets to retain eligibility for such advisory services.

The Adviser or its related persons have entered into and in the future expect to enter into side
letters or other similar agreements with investors in a Fund that have the effect of establishing
rights under, or altering or supplementing the terms of, that Fund’s Governing Documents. Such
rights or terms in any such side letter or other similar agreement are not subject to approval by the
Funds’ other investors and have included and may in the future include, among other things, (i)
different liquidity or notice periods, minimum investment amounts or fees or incentive allocations,
(ii) excuse rights applicable to particular investments (which may increase the percentage interest
of other investors in, and contribution of obligations of other investors with respect to, such
investments) or expenses, (iii) the agreement of the Adviser or its affiliates to extend certain
information rights or additional diligence, valuation or reporting rights to such investor, including,
but not limited to, accommodating special regulatory or other circumstances of such investor, (iv)
additional obligations and restrictions on the Adviser or its affiliates and the Fund with respect to
the structuring of investments in light of the legal, tax and regulatory considerations of such
investor, (v) different levels of preferred return and/or different claw back arrangements, (vi) other
rights or terms in light of particular legal, regulatory, public policy or other characteristics of such
investor, or (vii) confidentiality of investor information and dispute resolution. Monarch generally
expects that side letters may be entered into with larger or legacy investors and investors with
obligations to comply with specific regulatory or internal policy requirements, as well as with such
other investors as the Adviser may deem appropriate. Investors who have side letters or similar
arrangements may make independent investment decisions based on the information obtained
pursuant to those arrangements. The terms of any such side letter or agreement generally will not
be disclosed to other investors unless the Adviser or its affiliates have specifically agreed to do so
with another underlying investor or as may be required by applicable law. The terms and
conditions of certain side letters or similar arrangements differ with respect to material terms and
confer favorable rights or waive obligations for investors with such letters.