Item 5 - Fees and Compensation
Management Fee
ISF Management, subject to certain reductions, receives a management fee paid quarterly in
advance equal to 0.25 of one percent (1% per annum) of the Fund's Net Asset Value (the
"Management Fee"). The Fund is obligated to pay the Management Fee to ISF Management each
quarter in advance.
In the event that ISF Management has received or will receive finder's or other similar fees in the
course of its business, an amount equal to forty percent (40%) of such income, net of any related
expenses, is and will be applied to reduce the Management Fee otherwise payable with respect to the
remainder of the Fiscal Year in which such income is received. In addition to the foregoing,
following the set-off against the Management Fee, any excess fee income for that fiscal year shall
be carried forward to reduce future Management Fees.
In consideration for the payment of the Management Fee, in addition to implementing the
investment objectives and activities of the Fund, ISF Management provides certain administrative
services and bears limited administrative expenses of the Fund. Such expenses include the
compensation of officers and employees of ISF Management engaged in providing services to the
Fund, and office space for such officers and employees. Certain expenses, however, including
office rent, may be included in brokerage commissions paid by the Fund. ISF Management shall
not be responsible for any expenses of the Fund other than those specifically allocated to ISF
Management in the Fund's Partnership Agreement.
ISF Management reserves the right to reduce, waive, assign, participate or otherwise share the
Management Fee that ISF Management is entitled to receive with respect to any Limited Partner of
the Fund without the consent of or obligation to provide notice to any Limited Partner.
Incentive Allocation
Additionally, the General Partner is entitled to an Incentive Allocation as of the close of each
Fiscal Year (and as of each other date on which a determination of the Incentive Allocation is
required to be made with respect to a Limited Partner) equal to twenty percent (20%) of the Net
Profits allocable to each Limited Partner of the Fund for such year (or period ending on the
determination date) in excess of any previously unrecovered Net Losses charged to such Limited
Partner's Capital Account in prior years, adjusted for redemptions and distributions.
The General Partner reserves the right to reduce, waive, assign, participate or otherwise share the
Incentive Allocation it is entitled to receive with respect to any Limited Partner of the Fund without
ISF Management LLC Part 2A of ADV: ISF Management LLC Brochure
the consent of or obligation to provide notice to any Limited Partner.
Expenses
Certain expenses generally borne by ISF Management may be included in brokerage commissions
paid by the Fund (e.g., office rent). ISF Management will not be responsible for any expenses of the
Fund other than those specifically allocated to ISF Management in the Fund's Partnership
Agreement.
The Fund, and not ISF Management, will be responsible for certain expenses, including the
following: fees and expenses of any advisers and consultants to the Fund (including certain out-of-
pocket expenses and fees incurred by the advisory committee); external legal, auditing, accounting
and other professional fees and expenses (including costs of periodic updates to the offering and
organizational documents of the Fund), out-of-pocket costs of reporting to regulatory authorities
(including any and all regulatory, registration and compliance expenses incurred by the Fund, the
General Partner, or their affiliates, as a result of carrying out the business and purpose of the
Fund); taxes or governmental fees; fees and expenses of the Fund's custodians, subcustodians,
transfer agents and registrars; expenses of registering or qualifying securities held by the Fund for
sale; brokerage commissions; interest expenses; research, travel and other transaction costs and
expenses incurred in connection with the acquisition, monitoring or disposition of any investments
of the Fund; expenses of preparing and distributing reports and notices to Limited Partners;
litigation or other extraordinary expenses; and costs of investors' and other meetings.
The custodian receives a monthly fee, which will be in accordance with reasonable and customary
fees. Such fees will be calculated and is payable each calendar month. The custodian is also entitled
to reimbursement of actual out-of-pocket expenses incurred on behalf of the Fund.
For more information on brokerage commissions, see the Brokerage Practices section below.