Stone Lion LP

Item 5: Fees and Compensation

Stone Lion, or an affiliate of Stone Lion, typically receives compensation from each of
its Clients (that manage non-afflilated capital) based on both the amount of assets it
manages and on performance achieved for each Client’s account. The governing
documents of the Funds permit us to negotiate the fees, in separate side letters, with
investors in the Funds and to waive the fees for investors affiliated with Stone Lion or
its employees. Each investor in our Clients is a “qualified purchaser”, as defined under
U.S. securities laws.

For the Funds withnon-affilated capital, the asset-based fees are generally paid in
arrears monthly based on net assets as of the beginning of each month and are
deducted from the accounts of the investors. For the Credit Hedge Funds,
performance-based compensation was generally paid in arrears annually, or at the time
of redemption, and was deducted from the accounts of its investors. For the
Liquidation Funds and the PR Funds, performance-based compensation is paid from
distributions as investments are realized after recovery by investors of their principal
investment.

For the ICAV Fund, asset based fees are paid quarterly in arrears and performance
based fees are paid at the end of the ICAV Fund’s fiscal year. The Private Fund has
four different classes and each class has its own fee structure. For the liquidation
classes (the “Liquidation Class”) and the Puerto Rico class (the “Puerto Rico
Class”), asset-based fees are paid quarterly in arrears, and performance-based fees
are paid from distributions as investments are realized after recovery by investors of
their principal investment. For the private equity class (the “PE Class”), the asset-
based fees and the performance-based fees accrue monthly and shall be paid upon
liquidation of the investment.

The Funds are responsible for their operating expenses,: (i) all transactions carried out
by or on behalf of such Fund, (ii) the administration of such Fund, (iii) the offering and
sale of the interests in such Fund, (iv) the charges and expenses of legal advisers,
auditors and other related professional fees, (v) brokers’ commissions (if any),
exchange, clearing and settlement charges, borrowing charges on investments sold
short and any issue or transfer taxes chargeable in connection with any investment
transactions, (vi) all taxes and corporate fees payable to governments or agencies, (vii)
directors’ fees and expenses, (viii) interest on borrowings, including borrowings from
prime brokers, (ix) fees and expenses incurred by us in connection with our
investment management services including, expenses incurred in obtaining research
and other information utilized with respect to such Fund’s investment program, (x)
the fees and expenses of any custodian appointed by such Fund, (xi) fees and profit-
sharing arrangements due to consultants and service companies; (xii) the cost of
insurance for the benefit of the directors and/or officers of such Fund having a board
of directors and/or officers, the Firm and our respective partners and/or officers, (xiii)
litigation and indemnification expenses and extraordinary expenses not incurred in the
ordinary course of business, (xiv) costs and expenses incurred in connection with
compliance with any governmental, regulatory, licensing, filing or registration
requirements under the rules of any self-regulatory organization or any federal, state
or local or other applicable laws, including without limitation expenses incurred in the

preparation and filing of the Stone Lion’s Form ADV, Form PF and FATCA compliance
and (xv) all other organizational and operating expenses of such Fund.

Each Managed Account bears expenses that are directly related to such Managed
Account’s investment activities, including without limitation, professional fees,
expenses and commissions.

For more information on brokerage transactions and costs, please see “Item 9:

Item 7: Types of Clients

Our Clients are primarily private investment funds and separate portfolio accounts,
currently consisting of (i) private pooled investment vehicles and (ii) managed accounts
that include a private fund, a sub-fund of a collective asset-management vehicle and an
institutional investor. Investors in our Clients are generally pension funds, funds of
funds, family offices, high net worth individuals, private banks, insurance companies,
endowments and employees of the Firm.

We require investors in the Funds to be “accredited investors” and “qualified
purchasers” as such terms are defined under the U.S. securities laws.

The Credit Hedge Funds have a stated required minimum investment of $5,000,000
and the Liquidation Funds and the PR Funds have a stated required minimum
investment of $10,000,000. Nevertheless, we, or our affiliates, as described in the
Funds’ offering memoranda, have discretion to accept and have accepted subscriptions
for lesser amounts.

This Brochure is not an offer to invest in the Funds.