Item 5. Fees and Compensation
Funds
Noble will receive compensation in the form of management fees (“Management Fees”), and its
affiliate, Noble Capital GP LLC, a Delaware limited liability company that acts as general
partner to the U.S. Fund and the Master Fund (the “General Partner”), will receive compensation
in the form of performance-based allocations (“Performance Allocations”). The Feeder Funds
will invest all or substantially all of their assets in the Master Fund. Accordingly, the
Management Fees and the Performance Allocation will be paid at the Master Fund level.
Management Fees. The Feeder Funds, as limited partners of the Master Fund, will be charged
their pro rata share of such Management Fee, and each investor in the Feeder Funds will be
charged its pro rata share thereof. The Management Fee will be payable quarterly in advance
and will equal 0.375% (1.50% annualized) for Class A Shares and 0.30% (1.20% annualized) for
Class F Shares of (i) in the case of the U.S. Fund, the balance in each limited partner’s capital
account maintained for a class in the U.S. Fund (and its corresponding sub-account at the Master
Fund level) or, (ii) in the case of the Offshore Fund, the net asset value of each series of shares in
the Offshore Fund, as of the beginning of each calendar quarter (computed prior to the accrual of
any Performance Allocation applicable to such investor during a calendar year).
The capital account of a limited partner admitted to the fund other than on the first Business Day
of a calendar quarter (and capital accounts of limited partners that make additional capital
contributions on a day other than the first Business Day of a calendar quarter) will be subject to a
pro rata portion of the Management Fee for such quarter based upon the portion of the quarter
for which it is a limited partner. No portion of the Management Fee will be refunded if an
investor is permitted to withdraw or redeem from the Feeder Funds on a date other than the end
of a calendar quarter.
The General Partner may reduce, waive or otherwise modify the Management Fee with respect
to certain limited partners, including, without limitation, affiliates of the General Partner and/or
Noble; provided, however, that no such reduction, waiver or modification will adversely impact
any other limited partner or cause them to bear a higher portion of the Management Fee than
they would bear absent such reduction, waiver or modification.
Performance Allocation. At the end of each fiscal year of the Master Fund, the General Partner
will have reallocated to its capital account in the Master Fund 20% of the excess, if any, of the (i)
Net Increase (as defined below) preliminarily allocated to each of the capital accounts (and Sub-
Accounts) maintained for Class A limited partnership interests of the limited partners in the
Master Fund for the fiscal year, and (ii) (A) Net Increase preliminarily allocated to each of the
capital accounts (and Sub-Accounts) maintained for Class F limited partnership interests of the
limited partners in the Master Fund over (B) the Hurdle Amount (as defined below) for the fiscal
year, (the “Performance Allocation”), in each case, subject to the “high watermark” provision
described below. “Net Increase” means the (i) excess realized and unrealized net profits for a
fiscal year (prior to giving effect to any Performance Allocation for such fiscal year, but after
reduction for the Management Fee and other expenses and fees incurred by the fund for such
fiscal year, including its pro rata portion of the fees and expenses incurred by the Master Fund),
over (ii) realized and unrealized net losses for such fiscal year, that are allocated to each capital
account (and sub-account) (after adjustments to reflect withdrawals during such period). The
“Hurdle Amount” is equal to four percent (4%) of the beginning balance in the applicable capital
account (and Sub- Account) as adjusted for subscriptions and withdrawals. For purposes of
clarity, (i) the Performance Allocation will not be taken on the Hurdle Amount, (ii) a Hurdle
Amount related to capital accounts (and corresponding Sub-Accounts) maintained for a Series of
Class F Shares shall not be carried forward into future fiscal years, and (iii) the percentage used
to determine the Hurdle Amount (4%) will be proportionately reduced for calculating periods
that are less than a full year.
The Performance Allocation, while generally not taken at the fund level, will still be made with
respect to each of the fund’s limited partners or shareholders as applicable through reductions to
each limited partner’s or shareholder’s sub-account maintained with respect to a class and
corresponding adjustments to each such limited partner’s capital account maintained for such
class in the fund. If a limited partner or shareholder is permitted or required to withdraw or
redeem capital from the fund other than at the end of a fiscal year, the Performance Allocation
with respect to the portion being withdrawn or redeemed (including the applicable amount of Net
Increase) will be determined through the applicable withdrawal or redemption date.
The Master Fund will maintain a memorandum loss recovery sub-account (sometimes referred to
as a “high watermark”) (a “Loss Recovery Sub-Account”) that corresponds to the sub-account
maintained for each class of interests held by each limited partner in the fund (and each
shareholder in the Offshore Fund with respect to each series of each class of shares it holds in the
Offshore Fund). The opening balance of each Loss Recovery Sub-Account will be zero and will
be (i) increased by an amount equal to any net losses allocated to such investor’s sub-account for
a fiscal year or other accounting period, and (ii) decreased, but not below zero, by the aggregate
net profits allocated to such investor’s sub-account (before any Performance Allocation) for a
...