Item 5: Fees and Compensation
Description
The Partnership: Blackthorn receives from the Partnership a fixed management fee at an annual rate
equal to 1.0% of the net asset value of each limited partner’s capital account, calculated and payable
monthly in advance. Management fees may be reduced or waived at the discretion of Blackthorn with
respect to certain investors. Certain affiliates and employees may not pay any management fees. All fees
are deducted directly from the Partnership by Blackthorn or Blackthorn Capital, LLC (an affiliate of
Blackthorn) subject to approval by the Administrator. Blackthorn does not pro-rate management fees for
partial periods and, if a limited partner withdraws from the Partnership prior to a month-end, Blackthorn
does not rebate management fees paid in advance.
Blackthorn is also entitled to receive a management fee with respect to Special Situation Investments
held in the Partnership equal at an annual rate of 1.0% of the book value of each such illiquid investment,
payable in accordance with the terms otherwise as set forth herein with respect to the liquid assets held
by the Partnership.
The Fund: Blackthorn receives a fixed management fee from the Fund at an annual rate equal to 1.0% of
the net asset value of the Fund as it relates to each shareholder, calculated and payable monthly in
advance. Management fees may be reduced or waived at the discretion of Blackthorn. Certain affiliates of
Blackthorn may not bear the management fees. If applicable, fees are deducted directly from the Fund
by Blackthorn subject to approval by the Administrator. Blackthorn does not pro-rate management fees
for partial periods and, if a shareholder redeems from the Fund prior to a month-end, Blackthorn does not
rebate management fees paid in advance.
Blackthorn is also entitled to receive a management fee with respect to Special Situation Investments
held in the Fund equal to an annual rate of 1.0% of the book value of each such illiquid investment,
payable in accordance with the terms otherwise set forth herein with respect to the liquid assets held by
the Fund.
To the extent that the Fund invests all or a portion of its assets in the Partnership, management fees may
be payable at the Fund level, or in the alternative, such fees may be waived at the Fund level and the
Fund may be subject to the same charges at the Partnership level. In such case, the amounts charged at
the Partnership level will be equal to the fees payable at the Fund level. In no event shall the
management fee be duplicated at the Partnership level and at the Fund level.
The Partnership and the Fund - Special Situation Investments. If an investor requests a full withdrawal of
its investment at the time the Partnership or the Fund holds an illiquid investment, the Partnership or the
Fund shall withhold from the withdrawal proceeds of such investor an amount equal to one (1) year of
management fees payable with respect to such Special Situation Investments and shall keep the
Management Fee Holdback invested in the Partnership or the Fund designated for such investor from
which the management fees shall be deducted when due. If the Partnership or the Fund disposes of an
illiquid investment prior to the expiration of such one (1) year period, the excess will be distributed in
accordance with the applicable withdrawal terms. If an illiquid investment is held by a fully withdrawn
investor for longer than such one (1) year period, once the illiquid investment is disposed of, any
additional amounts owed will be deducted from the proceeds to such investor.
Managed Accounts: By its nature, each managed account is unique and customized to each individual
client. Therefore, the fee structure will reflect the degree of customization required by the client and the
commercial value of the account to Blackthorn but generally range from .50% to 1.0% of the net asset
value of the assets under management with each managed account client. The fee structure for
managed accounts will generally vary based on circumstances including but not limited to the size of the
account, its use of leverage, hurdle rates, expenses incurred, reporting requirements, and termination
provisions all of which are individually negotiated. Generally, asset-based fees are charged on a monthly
or quarterly basis in arrears. Asset-based fees are prorated for partial periods.
Whether or not fees are deducted directly from managed account clients or invoiced to such clients is
negotiated on a case by case basis. Clients that are invoiced receive such invoices according to the
terms of each separately managed account agreement.
All clients: Clients generally pay for all applicable ongoing costs and expenses associated with the
operation of their accounts, including but not limited to, brokerage commissions, research expenses,
custodial and prime brokerage fees, stock loan expenses, administration fees, SEC fees, bank fees, audit
and tax fees, legal fees, software expenses, organizational expenses, directors’ fees, secretarial fees,
software expenses, registration expenses, and governmental fees. See Item 12 for information relating to
Blackthorn’s brokerage practices.
See Item 6 below for a description of the performance-based fees Blackthorn is entitled to receive from its
clients.
None of Blackthorn or any of its supervised persons accepts compensation for the sale of securities or
other investment products, including asset-based sales charges or service fees from the sale of mutual
funds.