ITEM 5. FEES AND COMPENSATION
Partnership Fees
Fifth Lane and the Partnership have entered into an investment management agreement (as
the same may be amended and/or restated from time to time, the “Investment
Management Agreement”). In consideration for services provided pursuant to the
Investment Management Agreement, Fifth Lane will receive a monthly management fee
(the “Management Fee”) equal to 0.0833% (approximately 1.0% annually) of a Limited
Partner’s share of the Partnership’s Net Asset Value (before deduction of that month’s
Management Fee and any accrued Performance Allocation).
The Management Fee will be calculated and payable to Fifth Lane monthly, in advance, as
of the first day of each month. A pro rata Management Fee will be charged to Class B
Limited Partners on any amounts accepted by the General Partner during a month. No part
of the Management Fee will be refunded in the event that a Limited Partner withdraws,
whether voluntarily or involuntarily, all or any of the value in such Limited Partner’s
capital account during any month.
Fifth Lane may, in its sole discretion, reduce, waive or rebate all or a portion of the
Management Fee with respect to one or more Limited Partners (including affiliates of Fifth
Lane) for any period of time, or agree to apply a different Management Fee for any Limited
Partner.
For the avoidance of doubt, no management fees will be payable to Fifth Lane with respect
to certain Limited Partners, that Fifth Lane deems to be “Founders Class Limited Partners.”
Organizational and Initial Offering Expenses
The Partnership will pay or reimburse Fifth Lane or its affiliates for all organizational and
initial offering expenses of the Partnership, including, but not limited to, legal and
accounting fees, printing and mailing expenses and government filing fees (including blue
sky filing fees). The Partnership’s organizational and initial offering expenses may be, for
accounting purposes, capitalized and amortized by the Partnership for up to 60 months
from the date the Partnership commences operations. Amortization of such expenses is a
divergence from U.S. generally accepted accounting principles (“GAAP”). In certain
circumstances, this divergence may result in a qualification of the Partnership’s annual
audited financial statements. If the Partnership capitalizes and amortizes such expenses and
is then terminated within 60 months of its commencement, any unamortized expenses will
be recognized. If a Limited Partner makes a withdrawal prior to the end of the period during
which the Partnership is capitalizing and amortizing expenses, the Partnership may, but is
not required to, accelerate a proportionate share of the unamortized expenses based upon
the amount being withdrawn and reduce withdrawal proceeds accordingly.
Operating and Other Partnership Expenses
The Partnership will pay or reimburse Fifth Lane or its affiliates for: (i) all expenses
incurred in connection with the ongoing offer and sale of Limited Partnership interests,
including, but not limited to, printing of the Partnership’s Offering Documents and
exhibits, marketing expenses and documentation of performance and the admission of
Limited Partners, (ii) all operating expenses of the Partnership, such as tax preparation fees,
governmental fees and taxes, any administration fees paid to the Fund Administrator
(SS&C Technologies) providing services to the Partnership, costs of communications with
Limited Partners, and ongoing legal, accounting, auditing, bookkeeping, consulting and
other professional fees and expenses, (iii) all Partnership research, trading and investment-
related costs and expenses (e.g., brokerage commissions, research fees, margin interest,
expenses related to short sales, custodial fees, bank service fees, and clearing and
settlement charges), (iv) technology-related costs and expenses, including, but not limited
to, software licenses, data feeds and colocation expenses, (v) all expenses related to
attending any conference or seminar related to alternative investments (e.g., registration,
transportation, accommodation or meal expenses), (vi) regulatory and other filing fees and
expenses, and compliance costs and expenses, including, but not limited to, all fees and
expenses incurred by the Fifth Lane and/or its affiliates directly in connection with
examinations by the SEC and other regulatory authorities that are attributable to the
Partnership, as well as fees and expenses associated with the completion of regulatory
filings that are attributable to the Partnership (including, without limitation, Form PF
filings), (vii) travel expenses related to meeting with management teams, or related to any
of the other categories of expenses set forth herein, (viii) any costs and expenses incurred
by the Partnership in connection with converting from a stand-alone fund into a “feeder
fund” as part of a master-feeder structure, (ix) director and officer liability insurance or
other insurance premiums for any principal, agent or employee of the Partnership or Fifth
Lane or any of its affiliates, (x) all fees and other expenses incurred in connection with the
investigation, prosecution or defense of any claims, assertion of rights or pursuit of
remedies, by or against the Partnership, including, without limitation, professional and
other advisory and consulting expenses, and (xi) any and all costs and expenses incurred
in connection with the dissolution, winding-up, or termination of the Partnership.
Fifth Lane or its affiliates, in their sole discretion, may from time to time pay for any of the
foregoing Partnership expenses. Any such person may elect to be reimbursed for such
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