FS Tactical Advisor LLC

ITEM 5: Fees and Compensation

As compensation for the performance of its obligations as the manager of each Fund, the Adviser
will generally be entitled to receive from the Fund, subject to the terms and conditions of the
Fund’s governing documents, a management fee (collectively, the “Management Fees”) and an
incentive or performance–based fee. The Management Fees are typically paid by the Fund
quarterly in arrears, in accordance with its governing documents. Performance fees are typically
paid later in the Fund’s lifecycle by the Fund in arrears if specific internal rates of return thresholds
are achieved. All Management Fees are billed and payable as described in the private placement

memorandum of the Fund. The Adviser may, in its sole discretion, waive, reimburse, or delay all
or part of such fees.

Generally, each Fund (and, indirectly, the investors therein) bears all expenses as defined in the
private placement memorandum and investment management agreement of the Fund, including,
but not limited to: (i) legal, filing, auditing, consulting, administration, accounting and other
professional fees and expenses; (ii) expenses associated with periodic reporting; (iii) expenses
associated with financial statements and tax returns; (iv) insurance, interest and other expenses
incurred in respect of borrowings, if any; (v) other expenses associated with the acquisition,
holding, monitoring, settlement and disposition of the Fund’s investments (including, without
limitation, any brokerage, transaction, custody or hedging costs); (vi) the costs and expenses of
any custodians, lenders, investment banks and other financing sources; (vii) any indemnity
expenses; (viii) the costs and expenses of any litigation involving the Fund or its investments; and
(ix) certain compliance related costs and expenses.

Furthermore, to the extent the Adviser, the Fund’s general partner, related investment fund, or their
respective affiliates pay any of the expenses listed in (i) through (ix) above, the Fund shall
reimburse such payor. Expenses that shall be borne by the Adviser, and not the Fund, include the
Adviser’s general overhead expenses, including salaries of the Adviser’s employees, rent and other
expenses incurred in maintaining the Adviser’s place of business; provided, that certain services
may be provided by the Adviser to the Fund that would otherwise be performed by third parties,
and the cost (including employment costs and related overhead attributable thereto), of performing
such services shall be payable by the Fund. Organizational expenses have been borne by the
Adviser, the Fund’s general partner and/or their affiliates, and such organizational expenses will
be reimbursed by the Fund.

The allocation of expenses and fees between the Fund and any other FSH sponsored fund generated
in the course of evaluating and making portfolio investments which are not consummated, such as
out-of-pocket fees associated with due diligence, attorneys’ fees and the fees of other
professionals, will be determined by the Fund’s general partner in its good faith discretion based
on expected participation in such investment (although, co-investors may in certain circumstances
not bear broken deal expenses). Expenses related to consummated investments will generally be
allocated by invested capital among the Fund and any other entities participating in such
investment.

For a more complete discussion of Fund fees, compensation, and other expenses, please refer to
the governing documents for the Fund and Item 12: Brokerage Practices.

As the Adviser establishes other relationships (such as, with additional clients), it may arrange to
receive different types of fees, including fixed fees or fees paid on some other negotiated basis.

ITEM 7: Types of Clients

The Adviser currently provides investment advice to two (2) private funds and may, in the future,
provide investment advice to other pooled investment vehicles. As discussed in Item 4, the Adviser
may, subject to any limitations described in the investment advisory agreement between the
Adviser and the Fund, advise other Clients.

The required minimum investment in the Fund is $1,000,000.00. The Fund’s general partner has
discretion to accept lesser amounts.