SMH Capital Advisors LLC

Item 5: Fees Compensation

SMHCA offers services on a fee basis, which may include fixed fees, hourly fees, as well as fees
based upon assets under management or advisement. The firm does not, in any case, take receipt
of $1200 or more in prepaid fees in excess of six months in advance of services rendered.

Clients for whom SMHCA calculates and bills portfolio management fees are charged quarterly,
in advance. Clients that terminate their account before the end of a quarter will receive a refund
for any pre-paid services that were not received. Such refunds are calculated on a per diem basis
and are due within thirty (30) days of termination of the agreement. When a third-party (e.g., a
wrap fee sponsor or other Investment Adviser) calculates and bills portfolio management fees are
charged quarterly in advance or arrears, as determined and disclosed by the third party.

SMHCA may change the fee schedule at any time by giving 30 days prior written notice to the
client. Following the 30-day notice period, the new fee schedule will become effective unless the
client terminates the SMHCA Program Agreement. The client’s continued acceptance of the
services will constitute consent to changes in the Program Agreement, including any
increase/decrease in the amount charged.

Wealth Management Fee Schedule_______________________________________________
Depending on the particular client engagement, SMHCA offers investment services for an annual
fee based on the amount of assets under the Firm’s management. The specific manner in which
advisory fees are charged by SMHCA is established in a client’s written agreement with SMHCA.

       SMA and Institutional Programs Fee Schedules

The SMA and Institutional Program advisory fees charged by SMHCA are exclusive of brokerage
commissions, transaction fees, and other related costs and expenses which will be incurred by a
client. Clients may also incur certain charges imposed by custodians, brokers, and other third
parties such as fees charged by third party managers, custodial fees, deferred sales charges,
odd-lot differentials, transfer taxes, wire transfer and electronic fund fees, and other fees and
taxes on brokerage accounts and securities transactions.

In the SMA Program, the third-party advisor may add an advisory fee in addition to the fee charged
by SMHCA. The SMHCA fee and the third-party advisor fee will comprise the total fee. This total
fee will be shown on the Client’s SMA Program Agreement. The additional advisory fee is not
shown below. A portion of the investment advisory fees received by SMHCA may be paid to the
introducing third-party investment advisor. The fees that SMHCA pays to the third party do not
result in additional fees to the client.

                                                                            SMHCA High
                                                                           Yield/Income and

   Assets Under                                       SMHCA Diversified     SMHCA Total
   Management                  SMHCA AAA                  Income            Return Income

   First $25 million               0.30%                   0.70%                 0.80%

   Next $25 million               0.275%                   0.60%                 0.70%

   Next $50 million                0.25%                   0.50%                 0.60%

   $100 - $250 million             0.20%                   0.40%                 0.50%

   $250 - $500 million            0.175%                   0.35%                 0.45%

   Over $500 million               0.15%                   0.30%                 0.40%

                                                       SMHCA Total
                                                          Return
                                  Assets Under            Income
                                  Management           Unconstrained

                                First $25 million          1.00%

                                Next $25 million           0.90%

                                Next $50 million           0.80%

                               $100 - $250 million         0.70%

                               $250 - $500 million         0.60%

                                Over $500 million          0.50%

In the Institutional Program, SMHCA also offers an incentive-based fee arrangement to
institutional clients, in lieu of the fee schedule above which is negotiated on a client-by-client
basis. See “Performance-Based Fees and Side-by-Side Management” section for more
information about these arrangements.

The following individual strategies are not available in the Institutional Program. Fees shown
below are for the following individual strategies as offered through the SMA Program:

                                               SMHCA Concentrated
                                                Aggressive Growth,

                                         SMHCA Alternative Financial
                                                Services

                                            SMHCA Tactical Equity
         Assets Under
         Management                        SMHCA Municipal Income

         First $25 million                           0.80%

         Next $25 million                            0.70%

         Next $50 million                            0.60%

         $100 - $250 million                         0.50%

         $250 - $500 million                         0.45%

         Over $500 million                           0.40%

SMHCI Program Fee Schedules

                        SMHCA Sponsored Wrap Program Fees
                                     Individual Strategies

                                                                 SMHCA Catalyst
                         SMHCA                                     Allocation
    SMHCA               Alternative
  Concentrated           Financial         SMHCA Tactical       SMHCA Absolute
...

Item 7: Types of Clients

We offer our investment advisory services to individuals, registered mutual funds, trusts, estates,
foundations and endowments, corporate pension and profit-sharing plans, Taft-Hartley plans
registered investment companies, insurance companies, and individuals participating in wrap fee
programs. Accounts minimum requirements differ depending upon the advisory program or
investment strategy employed.