Item 5. Fees and Compensation
The Funds pay the Adviser an investment management fee ranging from 1.0% to 1.5% per annum,
depending on the date of an Investor's initial investment in the applicable Fund. The investment
management fees are calculated and paid quarterly in advance based on the value of the assets of each
Fund as of the beginning of each fiscal quarter. The investment management fees are prorated for
periods less than a full quarter. Pre-paid fees will be refunded based on the number of days remaining in
the quarter if the investment management agreement is terminated or a withdrawal/redemption is made
before the end of a quarter. Investment management fees are deducted from each Fund quarterly by
instructing the administrator of the Funds to deduct the applicable fee; provided, however, that Addison
Clark Northside LP does not have a third party administrator and accordingly, fees are deducted quarterly
by its general partner (or its affiliate) and paid to the Adviser.
The Adviser (or its affiliate) will also be paid or allocated annual performance-based compensation, which
is compensation that is based on a share of capital appreciation of the assets of a Fund. This
compensation rate can be 17% or 20% and is subject to a loss carry forward provision.
The Adviser (or its affiliate) may waive or reduce the investment management fee and/or the
performance-based compensation for Investors that are members, principals, employees or affiliates of
the Adviser or relatives of such persons and others.
Each Fund will pay its own expenses, including the fees paid to the Adviser, directors' fees (if applicable),
legal, accounting, auditing and other professional expenses, fees and expenses of the administrator,
research expenses and investment expenses such as trading costs, commissions, interest on margin
accounts and other indebtedness, custodial fees, bank service fees, fees paid to third parties to perform
the securities trading function on behalf of the Fund and other expenses related to the purchase, sale or
transmittal of Partnership assets. In addition, Funds will incur brokerage and other transaction costs.
Please refer to Item 12 for a discussion of the Adviser's brokerage practices.