ITEM 5 FEES AND COMPENSATION
A. DESCRIPTION AND BILLING
RKCM receives compensation in the form of management fees (the “Management Fee”),
payable quarterly in advance of the net asset value of each capital account of such limited
partner interest as of the first business day of such calendar quarter. RKCM deducts its fees
automatically from each Limited Partner’s capital account balance pursuant to the fee
structure agreed upon between the Limited Partner and the Funds as detailed in the Fund’s
Offering Documents.
For RKT Fund, the Firm receives a 3% management fee on an annualized basis. This fee is
in excess of the industry norm and similar advisory services can be obtained for less.
A pro rata portion of the Management Fee will be paid out of any subscriptions made by
new or existing Limited Partners 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.
Management Fees paid in advance are not refundable. Notwithstanding, RKCM may in its
sole discretion elect to waive or reduce any accrued Management Fee with respect to
certain Limited Partners.
For RKCP Fund and NCPC Fund, the Firm receives a 0% management fee.
Sub-Advisory and Consulting fees may be structured as a flat fee or as a performance-based
fee, such as a percentage of net profits generated by a particular trading strategy for which
RKCM provides consultative input and/or execution support. Performance-based fees are
calculated on a pre-agreed basis and are subject to the terms of the agreement with the
investment manager and/or its underlying funds managed by the investment manager.
B. OTHER FEES AND PAYMENTS
The Funds shall pay for all ordinary operating and other expenses, including, but not
limited to, legal, accounting, auditing and other professional expenses, fees paid to an
administrator and other administration expenses, the Management Fee, research expenses
including expenses relating to external consultants, insurance and bonding costs, fees or
assessments in connection with any regulatory registrations, qualifications and/or
approvals of the Fund, the General Partner or the Firm, related compliance fees and
expenses, research and portfolio management expenses, and any extraordinary expenses,
such as indemnification and litigation expenses, investment expenses such as commissions,
interest on margin accounts and other indebtedness, custodial fees, bank service fees and
other expenses related to the purchase, sale or transmittal of Fund assets, and other similar
expenses related to the Fund, as the General Partner determines in its sole discretion. The
Fund also bears the cost of each related or unrelated portfolio manager and/or sub-adviser
to the Fund pursuant to agreements RKCM or the General Partner has entered with each
portfolio manager and/or sub adviser. To the extent that a Fund invests in other private
investment funds, the Fund will indirectly bear a portion of the fees and expenses charged
by those underlying funds, including management fees, performance-based fees or carried
interest, organizational expenses, and other fund-level operating costs. These fees are in
addition to the fees charged by the Fund.
Please see the respective Offering Documents for a complete description of fees and
expenses.
C. REFUND AND TERMINATION POLICY
For RKCP Fund, Limited Partners may not request redemption of their investment for a
period of at least 12 months from the date of their capital contribution. The Initial Lock-Up
Period shall be calculated separately for each capital contribution made by a Limited
Partner.
For NCPC Fund, each Limited Partner may withdraw all or a portion of his capital account
in the Fund as of the last business day of any calendar quarter (the “Withdrawal Date”) upon
not less than 12 months prior written notice to the Fund’s administrator. The General
Partner may, in its discretion, permit withdrawals on a date other than a regular
withdrawal date; however, in such event the Fund reserves the right to charge a withdrawal
fee in connection therewith.
For RKT Fund, each Limited Partner may withdraw all or a portion of his capital account in
the Fund on the Withdrawal Date upon not less than 15 days’ prior written notice to the
Fund’s administrator. However, if a Limited Partner withdraws all or a portion of his
capital account on a withdrawal date occurring prior to December 31, then the withdrawal
will be subject to a withdrawal fee payable to the General Partner equal to the product of
the gross amount requested for withdrawal; three percent (3%); and the quotient of (i) the
number of months remaining in the calendar year and (ii) twelve (12). The withdrawal fee
will apply, unless otherwise waived at the sole discretion of the General Partner. A partial
withdrawal by a Limited Partner will only be permitted if immediately after such
withdrawal, the remaining balance of the Limited Partner’s capital account is at least equal
to the lesser of the initial investment of the Limited Partner in the Fund or $500,000.
D. OTHER COMPENSATION
Neither RKCM nor its supervised persons accept any compensation for the sale of securities
or other investment products, including asset-based sales charges or services fees from the
sale of mutual funds.
Certain Funds may maintain a “first loss” platform through which RKCM or an unaffiliated or
unaffiliated entity (each a “Backstop Investor”), to the extent permitted by law, to be subject
to additional obligations as well as be entitled to receive additional compensation and
providing the Fund with a percentage of the Fund’s initial deposit amount in a Managed
Account that Backstop Investor agrees to guarantee from loss (“Backstop Guarantee”). The
obligations, Backstop Guarantee, and compensation terms will be determined between the
Fund and such Backstop Investor and incorporated into and backstop agreement executed by
such parties.
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