5. Fees and Compensation
Eagle Group and its Relying Adviser are generally compensated for advisory services through
asset-based management fees, performance-based compensation, fees paid by borrowers at the
time a loan is funded (“Origination Fees”) and fees that are deducted from the gross yield paid by
the borrower to the Funds’ investors (“Servicing Fees”). However, the Adviser’s fees and
compensation arrangements vary depending on the particular Fund. The specific terms of such
arrangements are set forth in each Fund’s Offering Documents.
Management Fees
The Relying Adviser will receive a management fee of approximately 1.5% per year, payable
quarterly, based on the total capital contributions held by a Fund as of the last day of each calendar
quarter. The Relying Adviser receives a management fee only from investors in certain Funds, not
from all Fund investors.
Origination Fees
Origination Fees will be paid by each borrower, generally in the range of 1-2% of the principal
amount of each loan made by the Fund to such borrower. The Adviser will initially receive 100%
of the Origination Fees paid by the borrowers on loans intended to be sold, either entirely or in part,
soon after origination (“For Sale Loans”) and loans intended to be held in a Fund’s loan portfolio
(“Portfolio Loans”). For each For Sale Loan that is sold, the Adviser will pay 25% of the Origination
Fees received on that For Sale Loan to the Funds, as applicable, on the date that the For Sale Loan
is sold (the "Sale Date"), on the portion of the For Sale Loan sold to a third party on the Sale Date.
Servicing Fee
The Adviser will receive an annual Servicing Fee, payable monthly from the Funds, equal to 1%
per annum of the principal amount of each Portfolio Loan that is held by the Funds. The Servicing
Fee will be paid pro rata and simultaneous with each distribution made by the Funds to the limited
partners. The Servicing Fee will not be paid if a borrower is not current on a loan, in which case,
the Servicing Fee will accrue. In the instance of a loan default, the Adviser will share the defaulted
loan interest with investors after investors after investors recoup 100% of the principal, normal
interest and costs associated with the defaulted loan.
Late Fees
The Adviser will retain 50% of any late fees collected by the Fund, and the Fund will retain the
other 50% of late fees collected from borrowers. Additionally, to the extent there is a foreclosure
on a loan investment in certain of the Funds, the net cash proceeds received by those Funds from
any subsequent sale of the underlying property will be distributed among the General Partner and
the Limited Partners of those Funds pursuant to a priority distribution waterfall.
Incentive Fee
The Relying Adviser may receive an incentive fee equal to the net cash flow and net proceeds from
capital events after all limited partners have received total distributions equal to their capital
contributions and their preferred returns. See Item 6 titled Performance Based Fees and Side-by-
Side Management for more details on the Relying Adviser’s incentive fee program.
Expenses
Generally, the Funds reimburse the Adviser and Relying Adviser for all ordinary, necessary and
reasonable expenses incurred by the Adviser for the operation and administration of the Fund,
including, but not limited to (i) all out-of-pocket costs and expenses incurred by the Funds relating to
borrowing from third party lenders; (ii) fees and expenses of administrative agents, administrators,
outside counsel and accountants; (iii) insurance expenses; (iv) litigation expenses; (v) entity-level taxes
and other governmental fees and charges; (vi) expenses for liability insurance, including directors and
officers liability insurance; (vii) other out-of-pocket legal, accounting, auditing, appraisal,
administrative and accounting expenses and fees for other outside services; (viii) out of pocket expenses
relating to due diligence on actual or prospective loans and Origination Fees; and (ix) annual or special
meetings and periodic reports to Fund investors. The Funds do not reimburse the Adviser and Relying
Adviser for any overhead costs of the Adviser (including rent, salaries, employee benefits and other
internal expenses of the General Partner). The Adviser and Relying Adviser may determine to
allocate expenses among the Fund and other affiliates, in its reasonable discretion in a manner that
is fair and equitable to each of them.
Neither Eagle Group, the Relying Adviser nor any of its supervised persons accepts direct
compensation for the sale of securities or other investment products.
Please refer to the Funds’ Offering Documents for further information regarding the fees and
expenses of Eagle Group, the Relying Adviser and the Funds.