ITEM 5: FEES AND COMPENSATION
Items 5.A. and 5.B.
Management Fee
The Fund pays SWIM an asset-based fee (the “Management Fee”), monthly, in advance, based
on the capital account balance as of the end of the prior month of each Investor, calculated before
accrual of the Incentive Allocation (as defined below). The Management Fee is 1.5% per annum
of the Fund’s net assets under management.
SWIM, in its sole and absolute discretion, may elect to reduce or waive the Management Fee with
respect to any Investor without notice to or the consent of any other Investor.
Incentive Allocation
SWIM receives an Incentive Allocation with respect to each Investor of the Fund of 17.5% of the
“New Investment Profits” (as defined below) (including realized and unrealized gains and losses)
of the Fund otherwise allocable to that Investor in the applicable measurement period subject to a
10% per annum “Hurdle Rate”. The “Hurdle”, with respect to any Investor capital account, is an
amount equal to the Investor’s account balance as of the beginning of any fiscal year. The Hurdle
Rate is prorated for periods for less than a full fiscal year and resets annually and does not carry
over from the prior fiscal year. The Incentive Allocation is made with respect to each Investor at
the end of each fiscal year (or as of the date of withdrawal with respect to the withdrawn portion
of an Investor’s account during a fiscal year).
New Investment Profits refers to the net assets represented by any Investor capital account in the
Fund for any period, the amount by which the net assets represented by such Investor capital
account on the last day of the period (before reduction for any state tax) exceeds the net assets
represented by such Investor capital account as of the “High Water Date,” taking into account both
realized and unrealized gains and losses and adjusted to reflect additions to, and withdrawals,
distributions and redemptions from, the Fund. The “High Water Date” as to any Investor capital
account is the date on which the Investor capital account balance is the greater of (i) the highest
closing Investor capital account balance on the last day of any measurement period, or (ii) if no
Incentive Allocation had ever been made to SWIM with respect to such Investor capital account,
the date on which the Investor capital account was established.
SWIM, in its sole and absolute discretion, may elect to reduce or waive the Incentive Allocation
with respect to any Investor without notice to or the consent of any other Investor.
Item 5.C.
SWIM is responsible for the following expenses related to Fund activities: organizational expenses
(i.e., Fund organizational expenses and other expenses (other than placement agent fees) incurred
in the offering of the Interests), salaries and fringe benefits of professional, administrative, clerical,
bookkeeping, secretarial and other personnel; rent; office equipment; publications, subscriptions
and quotation and computer equipment and services; data processing; fire and theft insurance;
heat, light, cleaning, power, water and other utilities of any office space; stationery; postage; office
supplies; bookkeeping services; secretarial services; travel and entertainment; telephone (local and
long distance); and any other overhead type expenses.
The Fund shall bear all expenses incurred in connection with the operation of the Fund, whether
incurred by the Fund or by SWIM on the Fund’s behalf, including: Management Fees;
indemnification expenses of the Fund pursuant to the Governing Documents; commissions;
clearing fees; fees, interest and other costs on margin accounts or other financings or re-financings;
accounting and legal fees and disbursements (including legal fees related to the protection of the
Fund’s investments); accounting, audit and tax preparation expenses; borrowing charges on
investment securities sold short; custodial fees; bank service fees; expenses incurred in connection
with the admission of additional Investors or the acceptance of additional capital contributions;
investment and trading consultant expenses; research fees; expenses in connection with proposed
transactions (including transactions that fail to close); liability insurance premiums with respect to
SWIM; expenses related to the registered offices of the Fund; and any other reasonable expenses
(as determined by SWIM) related to the purchase, sale, holding or transmittal of Fund assets or
Fund liabilities.
Item 5.D.
As discussed in Item 5.A., the Fund pays SWIM the Management Fee, monthly, in advance, based
on the Investor’s capital account balance as of the end of the prior month, calculated before accrual
of the Incentive Allocation. Investors are not entitled to a refund of such Management Fees.
Item 5.E.
SWIM, including any of its supervised persons, does not accept compensation for the sales of
securities or other investment products.