Fees and Compensation
A. Advisory Services and Fees
1. Arvin Capital Fund
Arvin Capital, either directly or indirectly through the Fund General Partner, receives management
and performance-based incentive allocations in connection with the investment advisory services
Arvin Capital provides to the Arvin Capital Fund. The fees and/or allocations applicable to the
Arvin Capital Fund are set forth in detail in the Offering Documents.
A brief summary of such fees and allocations is provided below.
Management Fee
Investors in the Arvin Capital Fund (“Fund Investors”) pay Arvin Capital a management fee that
ranges between 1% and 1.5% per annum (the “Management Fee”). The Management Fee is paid
quarterly in advance based on each Fund Investor’s capital account balance (including Special
Investments, valued at the lesser of cost and fair value as determined by the Arvin Capital, and any
related hedges or positions).
Arvin Capital, in its sole discretion, may waive or modify the Management Fee for Fund Investors
that are members, principals, employees or affiliates of Arvin Capital or the Fund General Partner,
relatives of such persons (collectively, “Arvin-Related Investors”) and for certain large or strategic
investors. Typically, no Management Fee will be paid by any Arvin-Related Investor.
Incentive Allocation
At the end of each fiscal year, the Fund General Partner will be entitled to receive an incentive
allocation based on the investment performance of the Arvin Capital Fund (the “Incentive
Allocation”) generally in an amount between 15% and 20% of realized and unrealized gains
(excluding unrealized gains on Special Investments) for the year subject to a traditional “high
watermark” and subject to certain reductions as fully set forth in the Offering Documents. The
Incentive Allocation for Special Investments is calculated upon the realization of such investments.
Arvin Capital and/or the Fund General Partner, in its sole discretion, may waive or modify the
Incentive Allocation for Arvin-Related Investor and for certain large or strategic investors.
Typically, no Incentive Allocation will be paid by any Arvin-Related Investor.
In addition, Arvin Capital and/or the Fund General Partner, without notice to or consent from
existing and/or prospective Fund Investors, occasionally enter into side letter arrangements or
similar separate agreements with certain Fund Investors which provide for, different or more
favorable terms than those described above including, without limitation, special rights to make
future investments in the Clients or other investment vehicles, the fees charged, minimum
subscription amounts, redemption rights, transfers, special rights relating to participation in
Special Investments (as defined in Item 4), “most favored nation” rights, rights to receive reports
from the Arvin Capital Fund on a more frequent basis or that include information not provided to
other Fund Investors (including, without limitation, more detailed information regarding portfolio
positions) and such other rights as may be negotiated by the Arvin Capital Fund and such Fund
Investors.
2. Separate Accounts and Separately Managed Accounts
The Separate Accounts pay a management fee and performance-based incentive compensation in
an amount substantially similar to those paid by Fund Investors. Any additional separately
managed accounts are expected to pay a management fee and incentive fee based on the value and
performance of the assets in such an account, determined in accordance with each account’s IMA.
B. Payment of Fees
With respect to the Arvin Capital Fund and the Separate Accounts, management fees are paid
monthly in advance. Incentive allocations or fees are paid annually in arrears (excluding unrealized
gains on Designated Investments). With respect to the Arvin Capital Fund, the Management Fee
and Incentive Allocation are generally deducted from each Investor’s capital balance account by
the Funds’ administrator.
C. Additional Expenses
Each Client generally bears all of their own expenses, including but not limited to expenses related
to its operations and the investment of its assets. Each Client shall bear those expenses as set forth
in the applicable Offering Document, as amended from time to time, including, but not limited to,
some or all of the following: legal, compliance (including consultants’ fees), risk management
expenses (including software licensing and consultants’ fees), administrator (including, but not
limited to, middle and back office services and software necessary for trade capture and portfolio
management), audit and tax preparation (including third-party tax preparation) and accounting
expenses (including third party accounting services and accounting software), expenses related to
outsourced middle and back office service providers, class action service providers, organizational
expenses, execution and order management system fees and expenses, investment expenses such
as commissions and other brokerage fees, research fees and expenses (including Bloomberg and
other research subscriptions, medical and industry conference registration fees, research data
services, consultant fees and compensation and research-related travel), interest on margin
accounts and other indebtedness; borrowing charges on securities sold short, custodial fees; bank
service fees; Client-related insurance costs (including its pro rata share of premiums for D&O and
E&O insurance for the Arvin Capital and the Fund General Partner and members of the advisory
committee (“Advisory Committee”)), Cayman anti-money laundering officers and related
expenses, if applicable; independent Advisory Committee members’ fees and expenses, as
applicable; expenses of a Client’s regulatory compliance (including compliance with AIFMD and
AEOI and expenses related to various filings (or portions thereof) that Arvin Capital is required to
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