Item 5: Fees and Compensation
A. Description
During the investment period for a particular Fund or until a certain percentage of a
Fund’s capital commitments have been drawn down, Alsis receives an annual
management fee ranging from 1.25%-2.0% of capital committed to a Fund.
Following the investment period or after a certain percentage of a Fund’s capital
commitments have been drawn down, Alsis will receive fees ranging from 1.25%-
2.0% of invested capital. In addition, an affiliate of Alsis also receives a carried
interest of net cash flow that varies depending on the terms of the Funds.
B. Fee Billing
Management fees will be deducted from the Funds’ assets quarterly in advance.
C. Other Fees and Expenses
Each Fund shall bear and charged with all costs and expenses of the Fund’s activities
and operations, including, without limitation: (i) all fees, costs, and expenses, if any,
incurred in developing, negotiating, structuring, acquiring, holding, financing,
refinancing, monitoring, disposing of, or otherwise dealing with loan assets, portfolio
investments and authorized investments pursued for the Fund, whether or not the
Fund actually invests therein, including, without limitation, broken deal expenses, any
travel, legal, due diligence, telecommunications, investment banking, reporting,
projections, tax and accounting expenses and other fees and out-of-pocket costs
related thereto; (ii) the costs of rendering financial assistance to or arranging for
financing for any assets or businesses constituting an authorized investment; (iii)
taxes of the Fund, fees of auditors, counsel and other advisers of the Funds, insurance
costs of the Fund and litigation costs of the Fund; (iv) administrative expenses related
to the operation of the Fund, including, without limitation, the fees and expenses of
accountants, lawyers and other professionals incurred in connection with the Fund’s
annual audit, data processing, tax planning, engineering, investment-level
management and servicing, environmental, financial reporting, legal opinions and tax
return preparation and similar services, as well as expenses associated with the
distribution of reports and capital demand notices to the partners; (v) interest
expenses, brokerage commissions and other investment costs incurred by or on behalf
of the Fund; (vi) the expenses associated with the advisory committee and Partner
meetings; (vii) indemnification expenses incurred; (viii) all other customary
expenses; (ix) costs associated with any fund leverage facility; and (x) amounts to be
contributed or advanced to any portfolio investment for the purpose of that entity or
investment paying any cost of the type described herein.
D. Fees in Advance
Management fees are deducted quarterly from a Fund’s assets in advance. If the
Fund dissolves prior to the end of a quarter or if the investment management
agreement between a Fund and Alsis is terminated prior the end of a quarter, Alsis
will refund to the Fund a pro rata portion of the management fee based on the number
of days in the quarter that the investment management agreement was effective.
E. Securities Compensation
Not applicable.