Item 5. FEES AND COMPENSATION
Each Fund’s offering document fully discloses the terms of the compensation collected by the Firm
and/or its affiliates on behalf of the relevant Fund. The Firm charges investors in each of the Funds
a quarterly management fee equal to 0.25% (1.00% annualized) of each investor’s share of that
Fund’s net asset value. The management fee attributable to Springbank Value Partners, L.P. is
shared between one of its general partners, Springbank Capital, LLC, and the Firm.
Fund investors shall have applicable fees deducted directly by the Firm from their respective
capital accounts.
Currently, no supervised person of the Firm accepts compensation for the sale of securities or other
investment products, including asset-based sales charges or service fees from the sale of any
securities.
The Firm manages accounts which generate Performance-Based Compensation (as defined herein)
for the Firm or its affiliates, the Firm has an incentive to favor accounts for which it receives higher
Performance-Based Compensation because it will receive a greater profit from the accounts which
are charged such higher Performance-Based Compensation. Therefore, the Firm has an incentive
to allocate investments that are expected to be more profitable to accounts from which it collects
a higher Performance-Based Compensation, on the one hand, and that are riskier on the other hand,
since in both scenarios, the Firm may receive greater fees if the investment generates a positive
return. Notwithstanding the foregoing, the Firm does not favor accounts that pay higher
Performance-Based Compensation.
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Other Costs
The Funds also may incur third-party brokerage commissions and other transaction costs, as
explained in further detail in the “Brokerage Practices” section below. Additional third-party
costs related mainly to custody, audit, administration, legal advice, tax advice and preparation,
banking services, and research and consulting shall also generally apply with respect to both Funds.
Each General Partner may incur all expenses on behalf of the relevant Fund which it deems
necessary or desirable in its sole discretion. Investors in the Funds will pay (i) all operating
expenses of the relevant Fund, such as tax preparation fees, governmental fees and taxes, fees to a
potential future administrator and ongoing legal, accounting, auditing, bookkeeping, consulting
and other professional fees and expenses, (ii) all Fund 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), (iii)
regulatory and other filing fees and expenses related to the relevant Fund’s activities, (iv) director
and officer liability insurance or other insurance premiums for any principal or employee of the
relevant Fund, the General Partners (as defined below), the Firm or any of the Firm’s affiliates, (v)
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 relevant Fund, including,
without limitation, professional and other advisory and consulting expenses, and (vi) any and all
costs and expenses incurred in connection with the dissolution, winding-up, or termination of the
relevant Fund.
In all cases, details concerning applicable fees and expenses are set forth in each Fund’ offering
documents.
Refunds of Prepaid Fees
Investors in either Fund are not entitled to obtain refunds of fees paid in advance if such investor
voluntarily closes out his or her investment. Investors who are required by the Firm to withdraw
are entitled to obtain refunds of fees paid in advance. The amount of the refund will be determined
pro rata, based on the number of months that remain in the fiscal quarter during which such
investors is required to exit.
The Firm (or its affiliate) is authorized, in its sole discretion, to compulsorily withdraw any
investor at any time, with or without cause, on not less than 20 days’ prior notice. The Firm (or its
affiliate) may, in its sole discretion, treat the death or judicial determination of incompetence of an
investor as grounds to compulsorily withdraw such investor from either of the Funds.