ITEM 5 – FEES AND COMPENSATION
Eagle
While Eagle does not have a standardized fee schedule with respect to its Clients, Eagle charges
management fees based on the net asset value under management and performance-based
compensation based on net realized and unrealized trading gains. While Eagle does not have
a standardized fee schedule management fees generally are 1.0-1.5% per annum of the net asset
value under management per annum, generally charged monthly in arrears, and performance-
based compensation is generally 10-20% per annum of net realized and unrealized trading gains
subject to a high water mark and generally charged quarterly in arrears. Performance-based
compensation will be in conformity with Rule 205-3 under the Investment Advisers Act of 1940
(the “Advisers Act”), as applicable. Under certain circumstances, fees are negotiable. The
factors that determine whether or not fees will be negotiable include, among other factors, the
relationship between Eagle and the Client, amount of assets under management, and type of
advisory services (including whether Eagle is providing non-securities advisory services as
well). Fees charged with respect to Eagle’s Non-Securities Accounts may be similar or different
to those charged to its Clients (and those charged to investors in the Funds). Differences in fee
arrangements create an incentive to favor higher fee paying accounts over other accounts in the
allocation of investment opportunities (see also Items 6 and 11).
Fees are billed separately and are not deducted from Client assets. The specific manner in which
fees are charged by Eagle is set forth in a Client’s written agreement with Eagle or its governing
Memorandum. Generally, the management fee is computed before taking account of any
redemptions at the end of the month and is pro-rated for any additional capital contributions by
an investor which occur other than at the beginning of a month.
Client advisory agreements are generally terminable upon 30 days’ prior written notice to Eagle,
without penalty. Upon termination of any account, for any partial period, fees charged to Clients
in arrears will be prorated. Withdrawals by investors in a Fund are governed by such Fund’s
respective Memorandum.
Clients also incur certain charges imposed by custodians, brokers and other third parties such as
commissions, custodial fees, and other fees and taxes on brokerage accounts and securities
transactions where applicable. Such charges, fees and commissions are exclusive of and in
addition to Eagle’s fee, and Eagle does not receive any portion of these commissions, fees, and
costs.
Funds bear the expenses incurred in connection with their organization and the continuing
offering of their interests. These expenses include, without limitation, legal fees, accounting
fees, printing costs, government filing fees, and out-of-pocket expenses incurred by Eagle in
connection with offering the Funds’ interests. Other fees and expenses relating to the operation
of the Funds will also be borne by the Funds. These expenses will include: (i) transaction costs
and investment-related expenses incurred in connection with all investment and trading
activities, including brokerage, exchange-related, and clearing expenses; (ii) directors’ fees in
the amount as stated in a Fund’s Memorandum (excluding directors affiliated with Eagle who
have elected to waive their fees), in addition to routine legal, accounting, auditing, tax
preparation, custodial and related out-of-pocket expenses for all directors and regulators charges;
(iii) expenses associated with the formation of any master Fund to a feeder Fund and the
continued offering of interests in a Fund, other than finders’ fees, if any; (iv) all other operational
expenses, including, but not limited to, photocopying, facsimile, postage, duplication and
telephone expenses; (v) extraordinary expenses (e.g., litigation costs and indemnification
obligations), if any; (vi) each Fund’s administrator’s fees; and (vii) any fees of other service
providers disclosed in each Fund’s Memorandum.
Amaris
While it is not anticipated that Amaris will have a standardized fee schedule with respect to its
Clients, Amaris expects to charge management fees based on either the net asset value under
management or the notional value of an account, and performance-based compensation based on
net realized and unrealized trading gains. It is expected that management fees generally will be
up to 2% per annum, generally charged monthly in arrears, and performance-based compensation
will generally be up to 20% per annum of net realized and unrealized trading gains, subject to a
high water mark and generally charged quarterly or annually in arrears, though these amounts
are expected to differ between Clients. Upon termination of any account, for any partial period,
fees charged to Clients in arrears will be prorated. Performance-based compensation will be in
conformity with Rule 205-3 under the Advisers Act. The factors that will determine the amount
of fees charged include, among other factors, the relationship between Amaris and the Client,
amount of assets under management, and type of advisory services. The specific fees and
expenses applicable to a Client will be set forth in detail in each Client’s investment advisory
agreement.
General
Generally, Client expenses are billed directly to the applicable Client, however, if more than one
Client and/or Non-Securities Account incurs a shared expense, the Firm allocates such shared
expense among the applicable Clients and Non-Securities Accounts (i) in proportion to the net
asset value of each applicable Client and Non-Securities Account; (ii) in proportion to the size
of the investment made by each Client and Non-Securities Account to which the expense relates;
or (iii) in such other manner as the Firm considers fair and reasonable.
Item 12 further describes the factors that the Firm considers in selecting or recommending
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