Item 5. Fees and Compensation
Advisory Fees and Compensation. The Investment Manager is paid an asset-based investment
management fee ranging from .40% to 2% per annum of the net assets of the respective client account. In
the pooled investment vehicles, investment management fees are charged each month in arrears based
on the total market value of the assets in the client account (including net unrealized appreciation or
depreciation of investments and cash, cash equivalents and accrued interest) within ten days after the last
business day of the month. Management fees assessed on investments in pooled investment vehicles by
the Investment Manager and certain of its principals and employees and certain large or strategic investors
may be reduced or waived. Fees for SMAs are invoiced quarterly in arrears, based on the average monthly
AUM on the last day of each month in the quarter.
Performance-Based Compensation. The Investment Manager will be paid performance-based
compensation on its pooled investment vehicles, which is compensation that is based on a share of capital
gains on or capital appreciation of the assets of a client account that is a pooled investment vehicle. This
compensation will be paid to the Investment Manager and ranges from 15 to 20% per annum.
Other Fees and Expenses. The pooled investment vehicles’ Master Funds will bear (or will reimburse the
Investment Manager for) all expenses relating to its ongoing structure and operation (including direct
expenses of the Partnership and the Offshore Fund), including: (i) the Management Fee; (ii) all investment-
related costs and expenses (i.e., expenses that, in the Investment Manager’s sole discretion, are related to
the investment of the Funds’ assets, whether or not such investments are consummated), including
commissions and charges, outsourced trading expenses, interest on margin accounts and other
indebtedness, expenses relating to short sales, clearing and settlement charges, option premiums and
custodial and service fees, research-related expenses (including research-related travel expenses),
expenses relating to consultants, attorneys, brokers or other professionals or advisors who provide
research, advice or due diligence services with regard to investments; (iii) fees and expenses related to
portfolio exposure and performance management systems, risk management software and/or services,
software and/or services related to trade reconciliation, treasury, margin, financial and counterparty
management, risk monitoring, performance reporting, valuation quotation services (e.g., Bloomberg
terminals, historical and live financial data and other similar services and data feeds) and trade order
management systems (including systems that facilitate trade compliance, commission management, stock
locates and transaction cost analysis, and third party service providers used for implementation, custom
reporting, updates, consultations, support, maintenance, monitoring and data extracts); (iv) the Funds’
legal, accounting (including fees associated with accounting software and systems), tax preparation and
other tax-related expenses (including preparation and mailing costs of financial statements, tax returns and
other reports to investors), auditing, consulting and other professional expenses; (v) third-party
administration costs, fees and expenses (including any costs, fees and expenses related to investor
communications, relations, reporting or other investor materials, tax preparation and related reporting,
performance information, data extraction and other types of reporting and any audit or accounting services
provided by a third-party administrator); (vi) all fees and charges of custodians, clearing agencies and
banks; (vii) compliance and reporting expenses and expenses attributable to regulatory filings that are made
with respect to the Funds or assets of the Funds (including Section 13, Section 16, Form D, Form PF,
FATCA , CRS, anti-money laundering compliance (including the fees and expenses of the Anti-Money
Laundering Compliance Officer, Money Laundering Reporting Officer and Deputy Money Laundering
Reporting Officer of the Offshore Fund and Master Fund), state security filings, general regulatory
compliance and non-U.S. position reporting filings, if applicable, and non-U.S. filings, if any); (viii) the Funds’
pro rata share of Fund related insurance costs (including the Funds’ pro rata portion of director’s and
officer’s insurance, errors and omissions insurance, fidelity insurance and other similar policies covering
the General Partner, the Investment Manager and/or the board of directors of the Offshore Fund (the
“Directors”)); (ix) any taxes (including but not limited to any withholding taxes, transfer taxes, stamp duties
and other governmental or self-regulatory agency-related charges or duties); (x) all costs and expenses
incurred in attempting to protect and enhance the value of a Fund investment (including any fees and
expenses associated with any pending or threatened litigation, audit, investigation, administrative or other
proceeding, as well as any settlement costs); (xi) any fees and expenses relating to registration of the Funds
under the Mutual Funds Law; (xii) any fees and expenses related to the liquidation of any of the Funds, if
applicable; (xiii) fees paid to proxy and securities class action advisory firms; (xiv) expenses relating to the
offer and sale of Interests of the Partnership and common shares of the Offshore Fund, as applicable, and
redemptions/withdrawals and transfers thereof; (xv) Directors’ fees and expenses; (xvi) fees and expenses
related to the cost of maintaining registered offices in the Cayman Islands; (xvii) other reasonable expenses
related to the purchase, sale, preservation or transmittal of the Funds’ assets; and (xviii) any extraordinary
expenses (e.g., indemnification expenses).
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