Item 5. Fees and Compensation
A. Fees and Compensation
For detailed information regarding the fees expected to be charged to the Fund, please refer
to the Governing Documents.
Management Fee
The applicable fees for each Shadowbox Fund will be disclosed to investors in the private
offering materials and/or governing agreements for the relevant private offering of each
Shadowbox Fund. These fees may vary for future Shadowbox investment vehicles. In all
cases, investors in the applicable Shadowbox investment vehicle will agree to such fees in
writing.
In general, Shadowbox or its affiliates expect to charge the Fund a management fee of 1.5%,
initially calculated on the aggregate capital committed by the Fund’s limited partners and,
after the end of the Fund’s investment period, calculated on the sum of (A) the invested
capital of the Fund’s limited partners and (B) the unfunded capital commitments of the
Fund’s limited partners that have been committed, reserved, or allocated to complete
investments either in progress, or to which the Fund or any of its subsidiaries is committed.
Shadowbox may negotiate with certain investors in a fund for lower fees, usually based on
the size of an investor’s capital commitment.
The Fund’s general partner, an affiliate of Shadowbox (the “General Partner”) expects to have
the right to reduce or waive the management fee in certain circumstances as more fully
described in the Governing Documents.
Performance Fee
The General Partner will charge a performance fee (“Carried Interest”) based on certain
agreed upon performance metrics of the Fund. Information regarding such fees, including
the payment terms, is outlined in the Governing Documents. The Carried Interest is generally
expected to be 20%, with a “preferred return” hurdle equal to an 8% internal rate of return
and subject to a 50/50 “catch up”. These fees are expected to only be paid if and when earned.
The General Partner has the right to reduce or waive the Carried Interest in certain
circumstances as more fully described in the Governing Documents.
Property Level Fees
In many situations, Shadowbox or an affiliate may receive property-level fees for services
provided to directly-managed investments, including property management, construction
management and leasing. Such property-level fees are disclosed to investors and
Shadowbox will not charge in excess of the stated rates unless approved by Fund’s advisory
board (the “Advisory Board”).
Other Fees and Expenses
The Fund is also expected to bear customary expenses, including fees, costs and expenses
related to the diligence, pursuit, purchase, holding and sale of investments (including
investments that are not ultimately consummated), expenses of any administrators,
Shadowbox Logistics, LLC Date: July 2026
custodians, counsel and accountants (including audit fees), any insurance, indemnity or
litigation expenses, and any taxes, fees or other governmental charges levied against a Fund,
and expenses arising in connection with the formation, launch and closings of a Fund (as
described in, and subject to limits on such organizational expenses as set forth in, the
Governing Documents). The Governing Documents will set forth a complete description of
all expenses which the Fund may bear.
Method of Payment
Management Fees will be charged to the Fund quarterly in advance. Property-level fees will
typically be paid by the applicable project or investment vehicle when earned. It is expected
that management fees may be paid by capital contributions from the Fund investors made
pursuant to capital call notices delivered by the Fund’s general partner or managing
member, or may be paid out of cash otherwise available to the Fund, for example, following
a Shadowbox Fund’s receipt of proceeds from the sale of an underlying investment.
Shadowbox expects Carried Interest will be paid out of cash otherwise distributable by the
Fund, such as the receipt by the Fund of proceeds from the disposition of a portfolio
investment. Any such performance fees will be specifically disclosed to investors prior to
investment in the governing agreements of the applicable Fund.
B. Payment of Fees
Management fees to the Firm are expected to be paid directly from the Fund rather than
invoiced. Carried Interest is expected to be paid directly from the Fund to the General
Partner. Property-level fees will be charged directly to the individual properties held by the
Fund.
C. Prepayment of Fees
Management fees are expected to be paid by Shadowbox Funds in advance of any securities
management functions performed by Shadowbox. Fees assessed against the Fund are
expected to be paid from amounts contributed to the Fund by its investors in accordance
with the commitments of capital such investors make to the Fund or are paid out of cash
otherwise available to the Fund. Should Shadowbox’s services be terminated before services
are provided for the period, fees assessed in advance will be returned under a method that
is reasonably determined to be fair. In general, such returned fees would be pro-rated from
the date of Shadowbox’s termination to the end of the period to which the advance fee
related. Shadowbox’s advisory engagements for the Shadowbox Funds will be subject to
termination upon advance notice by either the General Partner or Shadowbox to the Fund.
We refer you to the Governing Documents for a full description of fees.
D. Other Compensation
We and our supervised persons do not accept any compensation for the sale of securities or
other investment products.
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