ITEM 5. FEES AND COMPENSATION
As provided under the governing documents and Advisory Agreements, Sansar and its affiliates will
receive a monthly management fee from the Master Funds at a fixed rate and an annual incentive
allocation based upon the performance of the Master Funds, as described further below. Although Sansar
has entered into agreements with the Funds providing for the below fees and incentive allocations, Sansar
may negotiate alternative fees or incentive allocations on a client-by-client basis with other funds or
separate account clients that it manages in the future. Different client facts and circumstances will be
considered in determining such fees or incentive allocations, including the client’s investment strategy,
assets under management, account composition, reporting requirements, economies of scale, if any, and
any other factors Sansar deems relevant. All such fees or incentive allocations will be set forth in separate
agreements with such clients. The organizational documents of the Funds provide that Sansar or its
affiliates may, in their sole discretion, agree with an investor to waive certain provisions of the
organizational documents, including agreeing to waive or reduce management fees or incentive
allocations. Sansar or its affiliates may waive or reduce the management fees and incentive allocations
with respect to affiliates and employees of Sansar and its affiliates.
Management Fee
As of the beginning of each calendar month, the management fee (the “Management Fee”), an aggregate
fixed fee calculated and payable monthly and calculated on the net asset value of each capital account in
the Master Funds (each a “Capital Account”) shall be debited against the Capital Accounts and paid to
Sansar or its affiliates for its services pursuant to the terms of the Advisory Agreements. Each investor’s
capital account in the Feeder Funds will indirectly bear the Management Fee paid by the applicable
Master Fund and allocated to the Master Fund Capital Account corresponding to such Feeder Fund capital
account. Management Fee rates charged may vary depending on the class of interests of the Fund.
Capital contributions received after the first business day of a month shall be subject to Management Fees
as if such contributions had been received on the first business day of such month. For purposes of
calculating the Management Fee, net asset value includes net realized and unrealized profits and losses.
The Liquidating Fund is not subject to Management Fees.
Incentive Allocation
Except as provided below, generally, at the end of each fiscal year and subject to the loss recovery
account provisions discussed in each Fund’s private placement memorandum, a percentage of any net
capital appreciation allocated to each Capital Account of a Master Fund (the “Incentive Allocation”) for
such fiscal year will be reallocated to the each Master Fund’s general partner. In the event that a partial or
complete withdrawal is made from a Capital Account or the Fund makes any other distributions other
than at the end of an incentive measurement period the applicable Incentive Allocation will be calculated
as described above through the withdrawal date with respect to the portion of such Capital Account that
was withdrawn and will be allocated to the applicable Master Fund general partner. The computations
required to be made for purposes of computing the Incentive Allocation will be made separately with
respect to separate contributions to or withdrawals from the Fund by a particular investor, to reflect
appropriately the different times at which investors may have contributed capital to the Fund or
withdrawn capital from the Fund and the net asset values of the Fund at such times. Each separate
contribution to the Fund may be treated as a separate Capital Account. As a result, an Incentive
Allocation may be charged with respect to a specific investment in the Fund made by an investor even if
no Incentive Allocation would have been charged had all of such investor’s investments been aggregated
for purposes of calculating the Incentive Allocation. The Liquidating Fund is not subject to Incentive
Allocation.
Other Expenses
Sansar and its affiliates are generally authorized to incur and pay in the name and on behalf of the Funds
all expenses which they deem necessary or advisable. The Master Funds and the Frontier Funds bear
certain expenses, including but not limited to the applicable Management Fee, if any, administrator fees
and the applicable Fund’s investment expenses (i.e., expenses related to the investment of the Fund’s
assets, including, without limitation, brokerage commissions, custody fees, interest and other borrowing
charges, professional and legal expenses relating to particular investments and other expenses reasonably
related to the investment making decision and monitoring process, including but not limited to, in some
circumstances, investment-related travel and related expenses, such as travel insurance and personal
security costs), taxes, insurance premiums, legal expenses, regulatory expenses, the costs of brokerage
services, research, and other consulting fees and travel expenses in connection with investigating and
monitoring potential and existing investments, accounting, audit and tax preparation expenses,
organizational expenses, extraordinary expenses and other expenses (in each case, associated with the
operation of the Fund and its related Feeder Funds, if any. The aggregate expenses of the applicable Fund
and its related Feeder Funds, if any, will be allocated to the investors of the Fund (and therefore to the
investors of the related Feeder Funds) on a pro rata basis; provided, however, that certain expenses related
solely to certain investors of such Fund may be specifically allocated to such investors or to appropriate
Capital Accounts (and/or specially allocated to the related Feeder Funds, if any).
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