Item 5 – Fees and Compensation
Private Funds Fees
As noted above, Breakout Capital serves as the investment manager to Private Funds. EM Revival
Fund GP, LLC, serves as the general partner to each Private Fund. EM Revival Fund GP, LLC and
Breakout Capital are affiliated entities under common control. As general partner, EM Revival
Fund GP, LLC shares in the profits and losses of each Private Fund and is entitled to receive an
incentive allocation equal to a percentage of net profits of the capital accounts in a Private Fund
under certain circumstances, as fully set forth in the private placement memorandum of each
Private Fund. Breakout Capital or one of its affiliates may waive, reduce or calculate differently
the Management Fee with respect to any series of interests of any Private Fund investor, and
generally does so with respect to the General Partner, current and former partners, members,
affiliates or employees of the General Partner or Breakout Capital, members of the families of such
persons, trusts or other entities created for estate planning purposes of such persons and/or
charitable organizations or foundations of such persons (collectively, “Investment Manager-
Related Investors”). Fees and other compensation paid to Breakout Capital or an affiliate are
generally deducted from the assets of the Private Funds.
The Management Fee charged by Breakout Capital to each Private Fund is disclosed in the Private
Fund Offering Documents. Each Private Fund pays all of its own operating expenses including but
not limited to all investment expenses, any expenses incurred in valuing the assets of each of the
Funds, accounting and legal expenses and organizational fees and expenses as more particularly
set forth in the Offering Documents of the respective Private Fund.
A pro rata portion of the Management Fee shall be paid out of any subscriptions made by new or
existing investors in a Private Fund on any date that does not fall on the first day of a calendar
quarter, based on the actual number of days remaining in such partial quarter. If an investor in a
Private Fund makes a withdrawal at any time other than at the end of a quarter, a pro rata portion of
the Management Fee (based on the actual number of days remaining in such partial quarter) will be
repaid by Breakout Capital to a Private Fund for the further benefit of the withdrawing investor.
Certain investors in the Private Funds may enter into Side Letters relating to fees and/or the
incentive allocation that will effectively reduce the aggregate fee or incentive allocation charged
to them by a Private Fund.
Any fees payable to any placement agent paid by a Private Fund Client, which are obligations of
Breakout Capital will be paid by Breakout Capital either directly or indirectly by reducing the
management fees owed to Breakout Capital.
The Management Fee is calculated and paid in advance. Payment of the Management Fee is made
within 10 days of the first day of each quarter, or as soon as practicable thereafter.
Portfolio Valuation for Fee Calculation
• Private Funds: Portfolio valuations are generally determined by the Private Fund’s
administrator through the use of a pricing vendor. If no pricing vendor information is
available for a particular security or the price is deemed by Breakout Capital to be unreliable,
Breakout Capital will obtain a quote from an alternate source or Breakout Capital will
determine the “fair value” of the security pursuant to Breakout Capital’s Valuation Policy.
In making valuation determinations, Breakout Capital may be deemed subject to a conflict of
interest, as the valuation of such assets and liabilities affects its compensation and the
compensation of the EM Revival Fund GP LLC. In certain circumstances, Breakout Capital
may, but is not required to, rely on information provided by third parties (including but not
limited to the private companies in which a Private Fund invests), which information may,
whether or not known to Breakout Capital at the time, be insufficient, inaccurate, incomplete
or otherwise unreliable. To the extent the information received by Breakout Capital is
inaccurate, the valuation of a Private Fund’s investments may be inaccurate. There is also
no guarantee that the value determined with respect to a particular asset or liability by
Breakout Capital will represent the value that will be realized by a Private Fund on the
eventual disposition of the related investment or that would, in fact, be realized upon an
immediate disposition of the investment. Certain transactions by Limited Partners (including
subscriptions and withdrawals) may be made based on estimated valuation figures.
Although a Private Fund’s Administrator will adjust the net asset value on each transaction
date based on the most current available information, the valuation figures could ultimately
differ from the figures used on the transaction date and, therefore, there is a risk that a
transacting Limited Partner will benefit (to the detriment of the Private Fund as a whole) in
some circumstances and suffer (to the benefit of the Private Fund as a whole) in other
circumstances.
Fee Billing
The specific manner in which fees are charged by Breakout Capital is established in Breakout
Capital’s written investment management agreement. The EM Revival Master Fund LP will pay to
Breakout Capital a fee for investment management services for each quarter. The management fee
will be calculated and paid in advance of each quarter.
Termination of Private Fund Investment Management Agreement
An investment management agreement entered into with Breakout Capital may be terminated by
either party upon ninety (90) days’ written notice of termination to the other party.
Separately Managed Account Fees
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