MS Capital Partners Adviser Inc

Item 5 – Fees and Compensation
Certain fees and other compensation described herein are subject to negotiation with investors. The
Adviser is not required to inform, or offer to any similar arrangements to any other client or investor,
except as agreed with each such person or as required by applicable law.
Management Fees
The Adviser will generally receive from NH Tactical Value and NH Tactical Value II an annual
management fee (the “Tactical Value Management Fee”), calculated with respect to each Limited Partner
of NH Tactical Value and NH Tactical Value II other than an affiliated investor, equal to (a) through the
end of the investment period, the Tactical Value Management Fee Percentage (as hereinafter defined)
multiplied by such Limited Partner’s capital commitment and (b) thereafter, the Tactical Value
Management Fee Percentage multiplied by the invested capital outstanding with respect to such Limited
Partner, including such Limited Partner’s pro rata share of cash borrowings and guarantees by the Fund
secured by unpaid capital commitments for the applicable Portfolio Investments. For purposes hereof,
“Tactical Value Management Fee Percentage” means: (i) with respect to each NH Tactical Value
Limited Partner that has a capital commitment of less than $10 million, 1.25%; and (ii) with respect to
each NH Tactical Value Limited Partner that has a capital commitment of at least $10 million, 1.00%.
With respect to NH Tactical Value II, the Tactical Value Management Fee payable ranges from 0.80%
to 1.25% on committed capital during the investment period and on invested capital thereafter, which is
funded by the Limited Partners for NH Tactical Value II. Certain investors may be subject to a .10%
discount on the Tactical Value Management Fee in connection with their investment in NH Tactical
Value II. Certain investors, including but not limited to certain Morgan Stanley employees, may be
entitled to no or a significantly reduced management fees. Upon termination of the management
agreement between the Adviser and each Fund, the Adviser is generally required to repay to the Fund, the
unearned portion (computed on the basis of the number of days elapsed), if any, of the Tactical Value
Management Fee previously paid to the Adviser (see also “Co-Investments” below for additional
information on the fees and expenses relating to co-investments). The Tactical Value Management Fee
is payable quarterly in advance.
The Adviser will generally receive from Growth & Innovation an annual management fee (the “Growth
& Innovation Management Fee”, and collectively with the Tactical Value Management Fee, the
“Management Fee”), calculated with respect to each Limited Partner of Growth & Innovation other than
an affiliated investor, equal to (a) through the end of the investment period, 1% per annum multiplied by
such Limited Partner’s capital commitment and (b) thereafter 1% per annum multiplied by the invested
capital outstanding with respect to such Limited Partner, including such Limited Partner’s pro rata share
of cash borrowings and guarantees by the Fund secured by unpaid capital commitments for the applicable
Portfolio Investments. Certain investors, including but not limited to certain Morgan Stanley employees,
might be entitled to no or significantly reduced management fees. Upon termination of the management
agreement between the Adviser and each Fund, the Adviser is generally required to repay to the Fund,
the unearned portion (computed on the basis of the number of days elapsed), if any, of the Growth &
Innovation Management Fee previously paid to the Adviser (see also “Co-Investments” below for
additional information on the fees and expenses relating to co-investments). The Growth & Innovation
Management Fee is payable quarterly in advance.

The Adviser and its professionals and its affiliates may charge portfolio companies transaction fees,
sponsor fees, monitoring fees, advisory fees, directors’ fees, commitment fees, consent fees, break-up
fees and other similar fees (collectively, “Transaction Fees”). An amount equal to each Limited Partner’s
pro rata share of 100% of all Transaction Fees paid by portfolio companies or proposed portfolio
companies that are received by the Adviser, any of its employees, the G&I General Partner or any
member of the Investment Team (as defined below), solely in connection with Growth & Innovation’s
consummation, holding or disposition of a Portfolio Investment or the termination of an unconsummated
Portfolio Investment, in each case, net of any unreimbursed related expenses incurred by the G&I
General Partner, the Adviser, any of their affiliates or any of their respective officers, directors,
employees, partners, managers, agents or other representations in connection with unconsummated
transactions, will be applied to reduce the Management Fee otherwise payable by such Limited Partner.
With respect to the Tactical Value Funds, Transaction Fees will first be allocated among the Limited
Partners and any co-investors on the basis of capital committed by each to the relevant Portfolio
Investment. Management Fee reductions will be carried forward if necessary.
Fees may be deducted from the Fund’s assets as, and to the extent, set forth in the limited partnership
agreement of the applicable Fund (the “Partnership Agreement”).
Carried Interest
MS Tactical Value Fund GP LP, the general partner of NH Tactical Value (the “ NHTV General
Partner”) and MS Tactical Value Fund II GP, the general partner of NH Tactical Value II (the “NHTV
II General Partner”), are generally entitled to carried interest with respect to each Limited Partner in
the Tactical Value Funds equal to 15% of such Limited Partner’s profits from each Fund investment,
subject to satisfaction of an 7% internal rate of return, compounded annually, for such investment and
previously realized investments and related management fees and other expenses.
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Item 7 – Types of Clients
The Adviser provides portfolio management services to pooled investment vehicles. Most of these pooled
investment vehicles are not subject to registration under the Investment Company Act of 1940, as amended
(the “Investment Company Act”). Generally, the minimum investment amount varied among the
investment vehicles that comprise the Fund. Each General Partner reserves the right to waive any minimum
investment requirement in its discretion.
Limited Partner interests in the Funds (the “Interests”) may be purchased only by certain eligible investors
who are (i) “accredited investors” as defined in Regulation D under the Securities Act of 1933, as amended,
(the “Securities Act”) and (ii) “qualified purchasers” for purposes of Section 3(c)(7) of the Investment
Company Act or “knowledgeable employees” as such term is defined in Rule 3c-5 under the Investment
Company Act.
In the case of employee funds, Interests have been offered and sold to investors who are “accredited
investors” as defined in Regulation D under the Securities Act and, to the extent applicable, in accordance
with the requirements of an exemptive order under the Investment Company Act received by Morgan
Stanley from the SEC in April 2000.