Elm Ridge Management LLC

Item 5. Fees and Compensation

The Adviser charges the Fund an investment management fee ranging from 1% to 1.5% annually
based on the value of the Fund's assets under management. Investment management fees are
charged each quarter in advance, calculated using the total market value of the net equity in the
Fund (including net unrealized appreciation or depreciation of investments, cash, cash
equivalents, and accrued interest) on the first day of the quarter. If an initial or additional
investment is made to the Fund during a quarter, the investment management fee will be
charged as of the date of such investment based on the value of such investment as of such date
and will be prorated for the number of days remaining in the quarter.

The Adviser or a related person will be paid a performance-based fee or allocation, which is
compensation that is based on a share of capital gains on or capital appreciation of the assets of
a client, in an amount ranging from 18% to 20% of such gains or appreciation.

In addition to paying investment management fees and performance-based compensation, the
Fund will also be subject to expenses incurred in its investment operations, including all expenses
incurred in connection with the purchase, sale, evaluation, or carrying of any securities or
investments, including, without limitation, custody, accounting and transfer fees, brokerage
commissions, and expenses associated with the order management systems and trade allocation
and acceptance services, interest expenses, and any expenses attributable to regulatory filings
which are made with respect to the assets of the Fund (including, without limitation, Section 13,
Section 16, and Form PF filings).

Moreover, clients will incur brokerage and other transaction costs. Please refer to Item 12 of this
brochure for a discussion of the Adviser's brokerage practices.

The allocation of expenses by the Adviser represents a conflict of interest. The Adviser allocates
expenses to each client in accordance with the client's arrangements with the Adviser (including
applicable client disclosures). The Adviser seeks to allocate shared expenses for products and
services benefiting the Adviser and the client and not covered in the client's arrangements in a
fair and reasonable manner. The Adviser may use a variety of methods to allocate common
expenses among its clients, including methods based on assets under management, relative use
of a product or service, the nature or source of a product or service, the relative benefits derived
by the Adviser's clients from a product or service, or other relevant factors. Nonetheless, the
portion of a common expense that the Adviser allocates to a client for a particular product or
service may not reflect the relative benefit derived by such client from that product or service in
any particular instance.

Item 7. Types of Clients

The Adviser currently provides advisory services only to pooled investment vehicles. The
minimum initial and subsequent subscription amounts are delineated in the Fund’s offering
memorandum.