Item 5: Fees and Compensation
Fees and compensation are described in the advisory agreements Whitefort entered into with
each Fund. All of the investors in the Funds are “qualified purchasers” (as defined in Section
2(a)(51) of the Investment Company Act of 1940, as amended (the “1940 Act”)).
For the Whitefort Fund, Whitefort receives management fees based on a percentage of the assets
under management, as well as a performance allocation based on a percentage of the aggregate
net gains (including current income and realized and unrealized gains and losses, determined
after all Fund expenses and management fees). Whitefort has the right to reduce, waive, assign,
participate or otherwise share the management fee, as applicable. Once paid, the management
fee will not be refundable.
An investor admitted into or withdrawing, either partially or in whole, from the Whitefort Fund
other than on the first day of a calendar quarter is subject to a prorated management fee.
The General Partners receive a performance-based allocation derived from the net appreciation
of each investor’s capital account as described fully in the Funds’ governing documents.
Management fees and performance allocations are deducted from the Funds’ accounts by the
Funds’ administrator. Management fees are paid quarterly in advance on the first day of each
calendar quarter, whereas performance-based allocations are made at the end of each fiscal year
and upon a limited partner’s withdrawal of all or any portion of its capital account.
Under its respective governing documents, each Fund will bear or reimburse the Firm and/or
the General Partners for advancing, the Fund’s operating and other expenses. The Firm and/or
the General Partners may, in their discretion, waive their right to be reimbursed for any of the
following expenses for any period of time.
Expenses borne by the Funds, or reimbursed to the Firm and/or the General Partners, shall
include, but not be limited to: (1) expenses related to investment transactions and positions for
the Funds’ account, including brokerage commissions and custody charges, clearing and
settlement charges, interest and commitment fees on loans and debit balances, costs of
borrowing securities to be sold short; (2) third party operations, accounting and portfolio and
trading-related software and system costs; (3) research and market data fees, expenses and
materials (including Bloomberg services and terminal, Debtwire service, Reorg Research
service, Covenant Review service and other subscriptions to news and quotation services and
print publications, computer hardware, data feed for portfolio securities, data and software used
for research (and any exchange fees related thereto), and travel expenses (including
transportation and lodging) relating to investment research and monitoring, due diligence and
execution); (4) trustees’ fees; (5) proxy solicitation firm fees; (6) public relations firm fees
related to the Funds’ investment activities; (7) fees and expenses incurred in connection with
the Funds’ risk management systems and processes (including software); (8) costs of any
outside appraisers, sub-advisors, accountants, auditors, attorneys, independent pricing services
or other experts or consultants engaged by the Firm, the General Partners and/or the Funds to
serve the needs of the Funds; (9) the fees, costs and expenses of the Funds’ governance
committees; (10) fees and expenses of any Fund’s board of directors (including, without
limitation, expenses related to the organization and conduct of directors’ and shareholders’
meetings (including, without limitation, travel, lodging and meal expenses) and director
registration fees); (11) fees and expenses of the Funds’ administrator (such as portfolio and
investor accounting, middle office, tax and financial reporting and investor servicing costs);
(12) costs and expenses in connection with communications to investors, including preparation
and distribution to investors of reporting materials; (13) bank charges; (14) costs of insurance,
including, without limitation, directors and officers liability insurance, errors and omission
insurance, and cybersecurity insurance and liability insurance covering the Funds, the General
Partners, the Firm and the members, partners, officers, employees and agents of any of them,
and each member of the governance committee (in each case, even if such insurance covers
conduct for which indemnity would not be available from the Funds); (15) organizational
expenses and expenses incurred in connection with the offering and sale of shares and interests,
including, without limitation, the preparation of the Funds’ governing documents, subscription
agreement, registered office fees, fees and expenses of the Firm incurred in connection with
“world sky” matters and private placement regimes, including the European Alternative
Investment Fund Managers Directive, and Form D and blue sky and similar fees and expenses,
and expenses incurred in connection with negotiating and complying with provisions of the
Income Sharing Agreement and any other side letter agreement with investors; (16) all legal
fees and costs, including legal expenses arising in connection with the Funds’ investing
activities (whether or not materialized), legal expenses relating to the formation and
organization of the Funds and legal expenses and costs (including settlement costs) arising in
connection with any litigation or regulatory investigation instituted against the Funds, the Firm
and/or the General Partners regarding the affairs of the Funds; (17) the Funds’, the General
Partners’ and the Firm’s costs and expenses relating to regulatory and statutory filings (such as
Cayman Islands regulatory fees, charges and expenses with respect to the Funds, the Funds’
directors, the General Partners and the Firm’s, filings for the Foreign Account Tax Compliance
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