FEES AND COMPENSATION
A. Advisory Fees and Compensation.
Management Fees. Pursuant to a series of investment management agreements, each
Feeder Fund will pay the Investment Manager a fee for management services (the
"Management Fee") for each month that ranges from 0.0625% (0.75% annualized) to 0.125%
(1.50% annualized) of the net asset value of each applicable series of management fee-paying
shares or the capital accounts corresponding to the management fee paying investors in the
applicable Feeder Fund calculated, in each case, as of the end of such month. The Management
Fee will be calculated and paid in arrears and will be pro-rated for partial periods. Without the
consent of the investors in a Feeder Fund, the Management Fee may be charged to, and paid
by, the Master Fund instead of such Feeder Fund.
The Investment Manager, in its sole discretion, may elect to reduce, waive or calculate
differently the Management Fee with respect to any investor, including any affiliates of the
Investment Manager or the Fund General Partner.
Incentive Allocations. Pursuant to the articles of association of the Intermediate Fund
(and the limited partnership agreement of the Domestic Fund), generally, at the end of each
fiscal year of the Intermediate Fund (or the Domestic Fund), the Intermediate Fund (or the
Domestic Fund) will reallocate from the net asset value of each series of shares of the
Intermediate Fund corresponding to a series of shares held by incentive allocation-bearing
investors to a special class of shares of the Intermediate Fund held by the Fund General Partner
(or from the balance of the capital account(s) of the incentive allocation-bearing investors of
the Domestic Fund to the capital account of the Fund General Partner) an incentive allocation
in an amount equal to a percentage of the net realized and unrealized appreciation in the net
asset value of such series of shares of the Intermediate Fund (or each such capital account of
the Domestic Fund) for such fiscal year (taking into account the Management Fee and, in
respect of the Intermediate Fund, any relevant expenses that are not reflected in the
Intermediate Fund's net asset value calculation, but before giving effect to any investor-related
taxes accrued or paid during such fiscal year (such amount, the "adjusted net capital return"),
subject to a loss carryforward mechanism. The incentive allocation percentage charged to the
investors varies from 5% to 30% of the adjusted net capital return, with the percentage
generally increasing in respect of amounts that exceed a certain threshold in respect of the
adjusted net capital return.
In the event that a Fund is terminated or an investor redeems or withdraws other than
at the end of a fiscal year, then for purposes of determining the incentive allocation, net capital
appreciation will be determined as if such dates were the end of the fiscal year, subject to certain
adjustments.
Also, in the Investment Manager's sole discretion (or the Fund General Partner's sole
discretion, as applicable), the incentive allocation may be reduced, waived or calculated
differently with respect to any investor, including any affiliates of the Investment Manager and
the Fund General Partner.
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B. Payment of Fees.
Fees and compensation paid to us (or our affiliates) by the Funds will generally be
deducted from the assets of such clients. As discussed above, Management Fees are generally
deducted on a monthly basis and the incentive allocation is generally assessed on an annual
basis.
C. Additional Fees and Expenses.
The Feeder Funds bear their own operating and other expenses and their pro rata share
of the expenses of the Intermediate Fund and the Master Fund, including, but not limited to,
investment-related expenses (e.g., brokerage commissions and transaction costs, clearing and
settlement charges, custodial fees, interest expense, consulting, investment banking and any
other professional fees or compensation relating to particular investments or contemplated
investments, and research-related expenses, including, without limitation, investment
consultants, and news and quotation equipment and services (including fees for data and
software providers)), expenses related to risk management provided by third parties, third-party
valuation services, investment-, operations- and trading-related software, including trade order
management software (i.e., software used to route trade orders), expenses relating to reports
provided to investors, legal and compliance expenses (which include, without limitation,
responding to formal and informal inquiries, indemnification expenses and expenses associated
with regulatory filings relating to the Feeder Funds, the Intermediate Fund and/or the Master
Fund and for the Master Fund's portfolio), insurance costs incurred in connection with the
Feeder Funds', the Intermediate Fund's and the Master Fund's business (including, without
limitation, acquiring and maintaining D&O insurance for the Feeder Funds', the Intermediate
Fund's and the Master Fund's directors and the Investment Manager and its affiliates), external
accounting, audit and tax preparation expenses, organizational expenses, expenses relating to
the offer and sale of the shares or interests in the applicable Feeder Fund, entity-level taxes,
fees and expenses of any administrator (including for middle office trade support services) and
any board of directors, expenses related to the maintenance of the Feeder Funds', the
Intermediate Fund's and the Master Fund's registered office, corporate licensing, extraordinary
expenses and other similar expenses. Expenses of each Feeder Fund (except for any investor-
related taxes) generally will be shared by all of the investors pro rata in accordance with the
aggregate net asset value of their shares or interests.
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