ITEM 5 – FEES AND COMPENSATION
Explora Investments’ Basic Management Fees
The specific manner in which fees are charged by Explora Investments is established in a client’s
written agreement with Explora Investments and, with respect to the private investment companies
it manages, are disclosed in their Private Placement Memoranda. Generally and pursuant to
contract, fees for the management of private investment companies, such as the Funds, will be
based upon a percentage of the total assets in the account (including margined assets).
Certain Fund investors may receive more favorable terms that are not afforded to other investors,
such as reduced management and performance fees. Fund details, including the associated
advisory fees, other expenses and investment strategies, are described in each Fund’s Private
Placement Memorandum.
Explora Investments’ actual fees, minimum fees and minimum account sizes may also be
negotiated and may vary from the fees described above. A client may pay more or less fees than
similar clients depending on the particular circumstances of the client, size, liquidity terms,
additional or differing levels of servicing or as otherwise agreed with specific clients.
Calculation and Deduction of Advisory Fees
In addition to performance-based fees described in Item 6 below, Explora Investments will
generally calculate and accrue its management fees daily. Its management fees will be payable
monthly in arrears as of certain valuation dates. When Explora Investments provides direct
investment advisory services for accredited investors and qualified clients on a discretionary basis,
clients may elect to be billed directly for management fees or to authorize Explora Investments to
directly debit management fees from client accounts. Upon termination of any account, any
prepaid, unearned fees will be promptly refunded, and any earned, unpaid fees will be due and
payable.
Other Fees and Expenses
In addition to investment management fees and performance-based fees, investors in the Funds
will indirectly bear any other costs charged to the Funds. Such costs will vary and typically
include, though are not limited to, accounting, legal, fund administration fees and other related
costs. Furthermore, Explora Investments’ fees are exclusive of brokerage commissions,
transaction fees, and other related costs and expenses which shall be incurred by the client. The
impact of mark-ups and mark-downs shall also be incurred by the client. Clients may incur certain
charges imposed by custodians, brokers, and other third parties such as fees charged by
sub-managers, custodial fees, transfer taxes, wire transfer and electronic fund fees, and other fees
and taxes on brokerage accounts and securities transactions. Such charges, fees and commissions
are exclusive of and charged before Explora Investments’ fees, and Explora Investments shall not
receive any portion of these commissions, fees, and costs.
Item 12 further describes the factors that Explora Investments considers in selecting or
recommending broker-dealers for client transactions and determining the reasonableness of their
compensation (e.g., commissions).
Prepaid Fees
Explora Investments generally does not charge clients fees in advance.
Compensation for the Sale of Securities
Neither Explora Investments nor Explora Investments’ supervised persons accept compensation
for the sale of securities or other investment products, including asset-based sales charges or
service fees from the sale of investment funds.