Item 5. Fees and Compensation
Asset-Based and Performance-Based Compensation. The fee schedules for the Funds are described in
detail in each Fund’s offering memorandum.
The Funds pay the Adviser an asset-based investment management fee each quarter in advance based
on the value of the net assets of the respective Fund on the first day of each quarter (the "Management
Fee"). The Adviser may, in its sole discretion, elect to reduce, waive or calculate differently the Management
Fee with respect to any employee or affiliate of the Adviser, any family member thereof or trusts, estate
planning and other investment accounts and/or vehicles established by or for the benefit of such persons.
The Adviser or Force Hill Fund GP LLC (the “General Partner”) also is entitled to receive annual
performance-based compensation (the “Incentive Compensation”) from the Funds, which is compensation
that is based on a share of net capital appreciation of the assets of a Fund. The Incentive Compensation is
subject to a loss carryforward provision. The Adviser may, in its sole discretion, elect to reduce, waive or
calculate differently the Incentive Compensation with respect to any employee or affiliate of the Adviser, any
family member thereof or trusts, estate planning and other investment accounts and/or vehicles established
by or for the benefit of such persons.
The asset-based fees and performance-based compensation that are charged to an Account are set forth
in the Adviser’s investment management agreement (“Investment Management Agreement”) with the
Account.
Expenses. In addition to bearing the Management Fee and Incentive Compensation, if any, the Funds are
also subject to other expenses related to its investments and operations, such as investment-related
expenses (e.g., brokerage commissions and transaction costs, clearing and settlement charges, custodial
fees, interest expense, consulting, investment banking and any other professional fees or compensation
relating to particular investments or contemplated investments, and research-related expenses, including,
without limitation, investment consultants, and news and quotation equipment and services (including fees
for data and software providers)); investment-related travel expenses (including meals, lodging and travel);
expenses related to risk management provided by third parties; third-party valuation services; investment-
, operations- and trading-related software, including trade order management software (i.e., software used
to route trade orders); expenses related to connectivity with risk and trade processing systems; expenses
relating to reports provided to Fund investors; legal and compliance expenses (which include, without
limitation, responding to formal and informal inquiries, indemnification expenses and expenses associated
with regulatory filings relating to the Funds and for their respective portfolios); insurance costs incurred in
connection with the Funds’ business (including, without limitation, acquiring and maintaining D&O and/or
E&O insurance for the Funds’ directors and the Adviser, the General Partner and their respective affiliates);
accounting, audit and tax preparation expenses; organizational expenses; expenses relating to the offer
and sale of the interests in the Funds including legal and related fees and expenses in negotiating
agreements and other documents; fees and expenses relating to proxy voting research, reporting,
execution and recordkeeping services; taxes; fees and expenses of the Funds’ administrator (including for
certain middle-office services), directors of the Funds and anti-money laundering officers of the Funds;
expenses relating to the maintenance of a registered office of the Funds; extraordinary expenses (including,
without limitation, fees and expenses incurred in connection with the reorganization, dissolution, winding-
up or termination of the Funds or any trading vehicle); and other similar expenses related to the Funds.
In addition to paying the investment management fees and performance-based compensation described in
the Investment Management Agreement, the Accounts are also subject to expenses as set forth in the
Investment Management Agreement.
The allocation of expenses by the Adviser between it and a Client and among Clients represents a conflict
of interest for the Adviser. To address this conflict, the Adviser has adopted and implemented policies and
procedures for the allocation of expenses. Pursuant to these policies and procedures, the Adviser allocates
expenses to each Client in accordance with the Client’s governing documents. The Adviser seeks to
allocate any shared expenses for products and services benefitting multiple Clients or both the Adviser and
a Client, and not covered in the Client’s governing documents, in a fair and reasonable manner.