Standard General LP

Item 5.          Fees and Compensation
Item 5A

Standard General typically charges fees that are based upon a set percentage of assets under
management and performance. For Standard General’s open-ended Funds, the amount of the
management fee depends on the investor’s choice of tranche and lockup period, and ranges from
0% to 2.0% per annum of the net asset value of the investment of the investor. For Standard
General Fund L.P., Standard General Offshore Fund Ltd., Standard General Fund II L.P., Standard
General Offshore Fund II Ltd., Standard General Focus Fund L.P. and Standard General Focus
Offshore Fund Ltd., the amount is calculated and payable quarterly as of the first day of each
calendar quarter. For certain other Funds, the amount is either calculated and payable monthly as
of the first day of each calendar month or quarterly in arrears as of the last day of each quarter.

ActiveUS 186068391v.2

The calculation and payment of the management fee is pro-rated for any period that is less than a
full month or quarter, as applicable. Any such prepaid fees, not subsequently earned through
continuing management services would automatically be refunded to the applicable investor.

For its closed-end Fund, the management fee is equal to 0.5% per annum on the amount of each
investor’s unfunded capital commitment and 1.5% per annum on such investor’s invested capital
(i.e., the cost basis of such investor’s share of investments then held by the Fund reduced by any
permanent write downs). The management fee is calculated and payable quarterly in advance as
of the first day of any calendar quarter. The management fee for the closed-end Fund is offset by
100% of all other fee income received by Standard General with respect to the closed-end Fund,
including all transaction fees, advisory fees, monitoring fees, investment banking fees, break-up
fees or other similar fees realized in connection with the use of the closed-end Fund’s capital for
consummated or unconsummated investments. Employees may receive and have received
compensation for service on certain boards, including companies held by the Funds. This
compensation is not offset against the management fee paid by Investors.

Except as described below with respect to the closed-end Fund, Standard General or its affiliate,
the General Partner, is entitled to receive from the Funds an annual performance-based profit
allocation or fee (the “Performance Allocation”) generally at the end of each year. The
Performance Allocation rate depends on the Investor’s choice of Fund and tranche. The
Performance Allocation amount will not exceed 25% of the increase in the value of each investor’s
investment, subject to a High Water Mark described below, and with respect to at least one Fund,
only to the extent that the net profits of such Fund exceed a predetermined hurdle amount. The
Performance Allocation is generally allocated at the end of each fiscal year and immediately prior
to a withdrawal occurring prior to the end of any fiscal year. The General Partner is also entitled
to receive from certain Funds, carried interest distributions based on the net proceeds from the
disposition of the assets of such Funds.

If a loss occurs that results in the value of an Investor’s investment being less than the highest
value of such investment through the close of any year since admission (or in the year of such
Investor’s admission, lower than the initial amount of capital contributed by such Investor to the
relevant Fund) (the “High Water Mark”), then no Performance Allocation is charged on
subsequent increases in the value of each investor’s investment, if any, until such time as the value
of the investor’s investment is equal to the High Water Mark. Withdrawals by an Investor will
result in a proportional reduction of the High Water Mark.

For Standard General’s closed-end Fund, an affiliate of Standard General, SGSSGP LLC, is
entitled to receive distributions of “carried interest” in the amount of 20% of net profits after an
investor has received a return of capital contributed to date plus an 8% cumulative compounded
annual rate of return on such capital. Upon the final liquidation and distribution of the Fund’s
assets, SGSSGP LLC will be required to contribute to the Fund for distribution to its limited
partners the amount of the cumulative net after-tax carried interest to the extent, if any, that the
amount previously distributed to the general partner as its carried interest exceeds the aggregate
amount due to SGSSGP LLC as its carried interest on a cumulative basis.

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The management fee and the Performance Allocation (or carried interest distributed with respect
to the closed-end Fund) may be waived, reduced or rebated by a Fund, Standard General or our
affiliates for any Investor, including for investments we or our affiliates make and/or for
investments made by the principals, our employees and their family members.

It is critical that Investors refer to their respective Fund’s governing documents for a
complete understanding of how Standard General and/or its affiliate, the General Partner,
are compensated for their advisory services. The information contained herein is a summary
only and is qualified in its entirety by the relevant Fund’s governing documents.

Item 5B

Standard General (or an affiliate) deducts fees from Investors’ assets invested in the Funds.
Investors do not have the ability to choose to be billed directly for fees incurred.

Item 5C

The Funds typically bear their respective operating expenses (the “Operating Expenses”).
Operating Expenses include, without limitation, with respect to a Fund or a Master Fund (as
defined below), as applicable, indemnification expenses; commissions; clearing fees; research fees
and expenses; fees, interest and other costs on margin accounts or other financings or re-
financings; accounting and legal fees and disbursements (including legal fees related to the
...

Item 7.          Types of Clients
Standard General provides investment advisory services to the Funds and may in the future provide
advisory services to institutional investors, endowments, trusts, pension funds and other types of
clients. Investments in the Funds are generally restricted to Investors who (i) qualify as “accredited
investors,” as that term is defined under Rule 501(a) of Regulation D of the Securities Act of 1933,
as amended, and “qualified purchasers” as that term is defined under the Investment Company Act
of 1940, as amended, or (ii) with respect to the non-U.S. Funds, are qualified non-U.S. investors.
For the avoidance of doubt, non-U.S. Funds advised by Standard General may also accept U.S.
investors who generally must qualify as both accredited investors and qualified purchasers (as
described in clause (i) of the preceding sentence). The minimum initial investment in a Fund is
typically $5 million, which amount is subject to waiver at the discretion of Standard General.