True Bearing Asset Management LP

Item 5 – Fees and Compensation

Asset-Based Fee
The Funds pay True Bearing Asset Management LP a fixed asset based (management)
fee at a rate of 1.5% per annum of assets under management. The asset-based fee is
calculated and paid quarterly in advance. As to capital contributed on a date other
than the first day of a quarter, True Bearing Asset Management LP is paid a prorated fee.
True Bearing Asset Management LP may waive or vary the asset-based fee as to
particular clients or investors by separate agreement.

Lower fees for comparable services may be available from other sources.

Performance Compensation
True Bearing Asset Management LP is entitled to receive performance-based
compensation generally calculated and made as of each December 31, equal to 20%
of the net profit of each Fund during that calendar year. The performance-based
compensation is also calculated and paid (if appropriate) when an investor withdraws
capital other than as of December 31, in proportion to the withdrawal amount. True
Bearing Asset Management LP may waive or vary the performance-based
compensation as to particular investors by separate agreement. The performance-
based compensation paid by the US Fund and the Account is structured as a partner
profit allocation (“incentive” or “performance” allocation) to True Bearing Asset
Management LP, and the Offshore Fund pays it as a fee.

The performance-based compensation is subject to a “high water mark” procedure. True
Bearing Asset Management LP receives the performance allocation or fee only with
respect to net profits after all net losses are recovered. This prevents True Bearing Asset
Management LP from receiving any performance compensation on profits that simply
restore prior losses. The performance compensation that True Bearing Asset
Management LP has already received will not be reduced by losses incurred in later
periods.

All investors meet the standard of a “Qualified Client” defined under rules of the
Investment Advisers Act of 1940, as amended.

Expenses
The Funds bear all of their ongoing operating costs. These include, among other things,
brokerage and futures commissions, interest on margin and other borrowings; borrowing
charges on securities sold short; custodial fees; bookkeeping, accounting and audit fees
and expenses; legal fees (including fees paid to True Bearing Asset Management LP’s
counsel for services for the benefit of the relevant Fund); expenses incurred by True
Bearing Asset Management LP for investment research and due diligence; tax
preparation fees; other professional fees; governmental fees and taxes; other expenses
incurred by True Bearing Asset Management LP in connection with investment activities
(including attending professional investment and industry specific conferences but
excluding travel costs therefor); costs of reporting to investors; cost of governing activities
(such as obtaining investor consents); fees of a third-party administrator; and all other
reasonable expenses related to the management and operation of the Funds or the

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True Bearing Asset Management LP                                Form ADV Part 2A Brochure

purchase, sale or transmittal of Fund assets, all as True Bearing Asset Management LP
determines in its sole discretion.

True Bearing Asset Management LP may, in its discretion, bear all or a portion of the
Funds’ operating expenses, either directly or through a waiver of a portion of fees to
which it would otherwise be entitled.

True Bearing Asset Management LP may, out of its own assets or revenues, make
payments to persons or entities that provide various investor relations and related
services to True Bearing Asset Management LP and/or the Funds, including the
introduction of investors to the Fund(s). Subject to any applicable regulatory restrictions,
True Bearing Asset Management LP may also direct a portion of the Funds’ portfolio
transaction business to counterparties, brokers, dealers, and other financial
intermediaries who provide those services to the Funds, who introduce prospective
investment advisory clients to True Bearing Asset Management LP.

Item 7 – Types of Clients

True Bearing Asset Management LP’s clients are the Funds, which are pooled investment
vehicles – private investment companies that are exempt from registration under Section
3(c)(7) of the Investment Company Act.

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True Bearing Asset Management LP                                Form ADV Part 2A Brochure