Basswood Capital Management LLC

Item 5. Fees and Compensation
Fees

We are generally entitled to two types of fees from each of the funds and separate accounts: (i) an asset-
based “management fee;” and (ii) an incentive allocation or fee, or a carried interest, based upon the
performance of the fund or separate account (“incentive compensation” and together with management fee,
the “fees”).

Asset-Based Fee

The management fee rate charged by the funds for our primary strategies is typically 1.5% per year of the
fund’s net assets and is typically determined and payable quarterly in advance.

A prorated management fee is paid with respect to any investments made during a quarter, and the unearned
portion of the management fee is reimbursed in respect of any withdrawals made other than at the end of a
calendar quarter.

Incentive Compensation

The incentive compensation charged by the funds for the primary strategies is calculated as a percentage of
the net profits of the fund for the relevant period (attributable to each investor’s limited partnership interest
or shares in the fund). The incentive compensation is typically determined and allocated/paid on an annual
basis but will be determined and allocated/paid for shorter periods under certain circumstances (such as
with respect to amounts withdrawn/redeemed from the fund).

The incentive compensation is subject to a loss carry forward or high-water mark provision that requires
that any losses suffered by a fund (adjusted to reflect withdrawals/redemptions) be offset by subsequent net
profits before we are entitled to subsequent incentive compensation from the fund.

The incentive compensation rate for Class A investments and Class D investments is 15% for the primary
strategy funds. These investments may be withdrawn at the end of any calendar quarter on 30 calendar
days’ prior written notice.

Certain funds for the primary strategies currently offer classes of interests or offered classes of interests,
which are subject to different incentive compensation rates and different liquidity terms.

General

The management fee and incentive compensation rates charged by the funds and the details of how the fees
are calculated for the funds are described in further detail in the applicable offering documents of the funds,
which are provided to potential investors. The fees paid by separate account investors are negotiated
individually and such fee rates agreed to and the details of how the fees are calculated for the separate
accounts are included in the investment management agreement for each separate account.

The fees described above are our typical fee rates. However, each fund has the right to establish additional
share classes or enter into agreements with one or more of its investors providing for the waiver or
modification of certain fund terms, or certain rights and obligations of fund investors, including, but not
limited to, fees, reporting and/or liquidity terms, otherwise applicable to such interest(s), in each case
without notice to the other fund investors. Under certain circumstances we may agree to different
management fee, incentive compensation, reporting obligations and/or liquidity terms from those described
above for particular separate account clients. Therefore, the management fee, incentive compensation
and/or the liquidity terms for a separate account client may be more favorable than those applicable to the
funds or other separate account clients.

The fees payable by the funds are deducted from the assets of the funds and paid to us or, in the case of
incentive allocations, are reallocated from the capital accounts of fund investors and into our capital
account. Our fees for the separate accounts are typically billed to the client and paid from the assets of the
account.

Additionally, Basswood and persons affiliated with Basswood that have investments in the funds are not
charged management fees and incentive compensation with respect to their investments.

Expenses

Each fund pays, or reimburses us or the fund’s administrator, for all operating expenses and other costs of
the fund as described in each fund’s offering documents, which may include, but are not limited to:

         third party accounting, fund administration, valuation, bookkeeping and auditing fees and
          expenses;

       third party legal fees and expenses, including, but not limited to, fees and expenses incurred in
        connection with a fund’s offering documents and the offering of the funds’ interests, fund contracts
        and investments;
       fees and disbursements of a fund’s and Basswood’s attorneys, consultants and other third parties
        performing work benefiting the fund (including, without limitation, the legal and other fees, costs
        and expenses of a fund in any proxy contest or other shareholder initiative or proceeding, and any
        threatened or actual litigation or governmental investigation or proceeding, and the amount of any
        judgments or settlements paid in connection with such litigation or fines or penalties levied as a
        result of any such proceeding or investigation);
       insurance and bonding costs, including, but not limited to, insurance premiums for errors and
        omissions insurance and directors and officers insurance;
       trading expenses and transaction costs, including, but not limited to, brokerage commissions,
        exchange fees, expenses relating to short sales, clearing and settlement charges, interest on loans
        and debit balances, margin interest and broker service fees;
       fees and costs related to any U.S. and non-U.S. regulatory reporting and filings related to the
        operations of a fund, including the costs of preparing such regulatory reporting and filings (e.g.,
        Form 13F, Schedule 13D and Schedule 13G);
       such research and portfolio management expenses as we deem appropriate, which may include, but
        are not limited to,
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Item 7. Types of Clients
We generally provide investment advice to private investment funds and institutional separate accounts.
The private investment funds are generally organized as either a U.S. limited partnership, under the laws of
the state of Delaware (referred to in this brochure as the “onshore funds”) or an exempted company, under
the laws of the Cayman Islands (referred to in this brochure as the “offshore funds”). The onshore funds
and corresponding offshore funds are structured either as separate funds (managed pari-passu) or within a
master-feeder structure. The types of investors in the funds we advise include pension and profit sharing
plans, trusts, estates and charitable organizations, sovereign wealth funds, funds of funds (whether
organized as partnerships, corporations or other entity types), high net worth individuals and family offices.
Our separate account clients are typically funds of funds, family offices, pension and profit sharing plans,
charitable organizations or other institutional investors.

The minimum amount of assets for a separate account that we will advise is generally $50 million.

Minimum investment amounts for our primary strategy funds are $1 million. Additional investments to
any of those funds must be in increments of $100,000. These minimums may be reduced or waived by us,
or the general partner or boards of directors of the funds, subject to any applicable statutory minimums.

Fund interests are generally offered only to a limited number of individual and institutional investors that
qualify as: (i) “accredited investors”, as defined in SEC Regulation D promulgated under the U.S. Securities
Act of 1933 (the “Securities Act”); and (ii) “qualified purchasers” or “knowledgeable employees”, as
defined in the U.S. Investment Company Act of 1940 and the rules promulgated thereunder.