Item 5 FEES AND COMPENSATION
The Advisor (or, in the case of the Fund, its affiliate the General Partner) receives an annual
performance-based allocation or fee with respect to each investor in the Fund and Offshore Fund
generally equal to 20% of the net profit (both realized and unrealized) during such period above a
“high water” mark. In addition, the Advisor receives a monthly management fee equal on an annual
basis to 2.0% of net asset value. The Advisor (or, the General Partner, as applicable) may, in its sole
discretion, waive all or a portion of any management fee or performance allocation or fee with
respect to any capital account or investor in any fund, or may charge a management fee or
performance allocation or fee that is otherwise on different terms than those described above.
Private Fund Expenses
On an ongoing basis, each Private Fund will indirectly bear its pro rata share of the expenses
incurred by the Master Fund. These expenses include investment expenses (i.e., brokerage and
clearing expenses and commissions, dealer spreads, margin interest expenses, registration costs,
research-related travel expenses, and issue and transfer taxes), custodial expenses, and legal,
accounting, administration, bookkeeping, pricing, valuation, continuous offering expenses of the
Private Fund, auditing and tax preparation, filing and distribution fees and expenses, taxes (if any)
imposed on the Master Fund, insurance, and other ordinary and extraordinary expenses related to the
Master Fund. In addition, each Private Fund bears its own ordinary and extraordinary expenses,
including without limitation the Management Fee, legal, accounting, administration, bookkeeping,
auditing and tax preparation, filing and distribution fees and expenses, news and quotation services,
insurance, taxes (if any) imposed on the Private Fund, and to the extent that a Private Fund in the
future withdraws its investment in the Master Fund, the Private Fund will incur directly expenses of
the nature incurred by the Master Fund and borne indirectly by the Private Fund while investing in
the master fund/feeder fund structure. In addition, each Private Fund bears its organizational
expenses and a pro rata portion of the expenses of organizing the Master Fund. To the extent not
prohibited by applicable law, the Advisor may use so-called soft dollar credits generated by the
Private Funds’ or Master Fund’s securities transactions with brokers and dealers to assist the Advisor
and its affiliates in providing their respective services to the Master Fund, the Private Funds and any
other account advised by the Advisor or its affiliates.
The Private Funds may enter into joint venture arrangements, co-invest with third parties, Private
Fund investors and/or other Private Funds, or otherwise invest in pooled investment vehicles,
registered investment companies and similar entities that may not be registered as investment
companies. Any asset-based fees, performance-based fees, allocations and other expenses of such
investments are in addition to the Management Fee, Performance Allocation or other fees and
expenses borne by the Private Funds (including indirectly through the Master Fund).