Item 5. Fees and Compensation
Asset-Based and Performance-Based Compensation. The fee schedules for the Client are described in
detail in the Clients’ offering memorandum.
As a general matter, the Clients pays the Adviser an asset-based investment management fee each quarter
in advance of 2.0% per annum based on the investor’s capital account as of the first Business Day (as
defined below) of each calendar quarter (the "Management Fee"). The Adviser may waive or modify the
Management Fee for investors that are principals, employees or affiliates of the Adviser, relatives of such
persons, and for certain large and/or strategic investors. The Management Fee will be adjusted for capital
contributions and withdrawals made during a calendar quarter and calculated without accrual of the
incentive allocation
As a general matter, the Adviser is entitled to receive annual performance-based compensation equal to
20% at the end of each fiscal year (the “Incentive Allocation”) from the Clients, which is compensation that
is based on a share of net profits (including realized and unrealized gains and losses) of a Clients. The
Incentive Allocation with respect to certain fund investors may be subject to a hurdle and a loss
carryforward. The Adviser may waive or modify the Incentive Allocation for investors that are principals,
employees or affiliates of the Adviser, relatives of such persons, and for certain large and/or strategic
investors. When calculating the Incentive Allocation, the Management Fee and all items of income, loss
and expense incurred by the Adviser will be taken into account
Expenses. In addition to bearing the Management Fee and Incentive Allocation, the Clients are subject to
other expenses related to its investments and operations. The Adviser pays its own operating and overhead
expenses such as rent, supplies, secretarial expenses, stationery, charges for furniture and fixtures, employee
insurance, payroll taxes and compensation of employees. All other expenses will be borne by the Clients
including legal and compliance expenses, third-party accounting expenses, third-party administrator
expenses, audit and other professional fees and expenses, organizational expenses, research fees and
expenses, Client-related insurance costs (including D&O, E&O, and fidelity insurance and other similar
policies for the Adviser), Clients compliance and reporting expenses and expenses attributable to regulatory
filings (or portions thereof) that are made with respect to the Clients or assets of the Clients (including filings
related to Section 13 and Section 16 of the Securities Exchange Act of 1934, Form PF, FATCA, anti-money
laundering compliance, blue sky filings, exchange filings, general regulatory compliance and non-U.S. position
reporting), expenses relating to the registration, offer and sale interests in the Clients in any jurisdiction in
which interests are offered or sold, expenses related to withdrawals of interests and transfers thereof,
expenses relating to the acquisition, workout and disposition of an asset, any taxes (including, without
limitation, any withholding taxes, transfer taxes, stamp duties and other governmental or self-regulatory
agency-related charges or duties), any expenses related to tax audits or investigations and defending any tax
audit, investigation or assessment, costs related to investigating, defending or prosecuting any claims or
threatened claims or settlement thereof or amounts paid under any indemnification or contribution
agreements, expenses relating to consultants, attorneys, brokers or other professionals or advisors who
provide research, advice or due diligence services with regard to investments, other investment-related
expenses (i.e., expenses that, in the Adviser’s sole discretion, are related to the investment of the Clients’
assets, whether or not such investments are consummated), such as commissions (including clearing fees),
interest on margin accounts and other indebtedness, borrowing charges on securities sold short and
investment-related legal costs, any extraordinary expenses (e.g., litigation expenses), any fees and expenses
related to the Clients’ liquidation, if applicable, custodial fees, bank service fees, prime broker fees, other
expenses related to the purchase, sale, preservation or transmittal of the Clients’ assets.
The allocation of expenses by the Adviser between it and the Clients represents a conflict of interest for the
Adviser. The Adviser will adopt an expense allocation policy that is designed to address this conflict.