ITEM 5 – FEES AND COMPENSATION
Fees are determined and assessed in a manner specific to each Fund and in accordance with
the Fund’s Governing Documents. It is important that Investors refer to the relevant Governing
Documents for a complete understanding of fees and expenses they may pay through an
investment in a Fund. The information contained herein is a summary only and is qualified in
its entirety by such Governing Documents.
Any new Fund launched by Elevar may have materially different terms than those summarized
below. It should be noted that the fees paid by the Funds are negotiable by Investors only prior
to an investment in the Fund, at the discretion of the Fund’s general partner.
Management Fees
Elevar is compensated for its advisory services through asset-based management fees (typically at
a rate of 2 to 2.5% per annum). EEIII pays a quarterly management fee, in advance, equal to a
percentage of its total commitment amount during the commitment period and a percentage of its
net invested capital plus specified amount of reserves for follow-on investments thereafter. EEIV
pays a quarterly management fee, in advance, equal to a percentage of its total commitment amount
during the commitment period and a percentage of its net invested capital plus specified amount
of reserves for follow-on investments thereafter. EEV pays a quarterly management fee, in
advance, equal to a percentage of its total commitment amount during the commitment period and
a percentage of its net invested capital plus specified amount of reserves for follow-on investments
thereafter. Elevar is paid the management fees applicable to the appropriate Fund directly from the
Fund’s assets and Investors do not have the ability to choose to be billed directly for management
fees.
Carried Interest
In addition, as described in more detail in Item 6 below and pursuant to the terms in each Fund’s
Governing Documents, Elevar, the Advisory Affiliates or other affiliates of Elevar may receive
performance-based profit distributions from a Fund. Performance-based profits are made when
prescribed by the applicable Governing Documents to the relevant Advisory Affiliates for the
Elevar Funds.
Expenses
The Advisory Affiliates or Elevar will pay certain ordinary and customary expenses out of the
management fee (including salaries, wages, rent, communication costs, equipment and other
overhead expenses).
Each Fund will be responsible for: (a) out-of-pocket expenses of transactions not consummated;
(b) all costs and expenses (including travel and accommodation expenses) attributable to acquiring,
holding, monitoring and disposing of each respective Fund investment (including interest on
money borrowed by the Fund, registration expenses and brokerage, finders’, custodial and other
fees); (c) third-party legal fees, including expenses associated with the preparation of legal
opinions, third-party accounting, auditing, consulting and other fees and expenses; (d) the
preparation of the Fund’s financial statements, tax returns, Schedules K-1 and compliance
reporting (e.g., FATCA and CRS); (e) expenses of advisors and of any Fund administrator; (f)
reasonable expenses of the Fund’s advisory committee and its members incurred in connection
with advisory committee meetings and the carrying out of their responsibilities; (g) extraordinary
expenses of the Fund, including, but not limited to, certain valuation expenses, litigation and
indemnification costs and expenses incurred, judgments and settlements; (h) the Fund’s
management fee; (i) the reimbursement of limited partner travel expenses incurred in connection
with such limited partner’s attendance of annual partnership meetings; (j) any taxes, fees, or other
governmental charges levied against the Funds; and (k) any other expenses in accordance to the
terms of each Fund’s Governing Documents or approved by the advisory committee.
The Fund expenses shall generally not include expenses of a Co-Investment Vehicle, provided,
however, that when such costs and expenses are the common expense of the Fund and one or more
Co-Investment Vehicles, such expenses shall generally be allocated among such entities based on
the respective capital commitments of each entity or the amount of their respective investment in
a Portfolio Company that gives rise to such cost or expense, as applicable.
Each Fund will bear the organizational and syndication expenses (subject to the terms and
limitations set forth in the Client Agreements) associated with the formation of such Fund, up to a
maximum amount equal to the amount detailed in the respective Governing Documents.
Offset Fees
Elevar, the Advisory Affiliates or their members, employees or other affiliates may receive
customary break-up and topping fees, commitment fees, monitoring and directors’ fees and
transaction, financing, divestment and other similar fees from Portfolio Companies as
compensation for financial advisory and similar services. If Elevar, or any Advisory Affiliate, or
their members, employees or other affiliates receive such fees, 100% of such fees will offset the
management fees payable by the applicable Fund. Any reimbursement of Elevar, the Advisory
Affiliates or their members, employees or other affiliates for out-of-pocket expenses incurred on
behalf of a Portfolio Company will not be offset against the management fee. These fees, and the
associated conflicts of interest they present, are further described in Item 11 below.
Senior Advisors/Operating Partners/Consultants
Elevar may hire third party consultants throughout the Funds’ investment processes, including
senior advisors who are former senior executives with operating experience and industry-specific
knowledge (“Senior Advisors”). Senior Advisors play an important role in how Elevar manages
its portfolios and may assist with a variety of activities, including market research, new investment
...