Item 5 – FEES AND COMPENSATION
Pursuant to the Management Agreement with the Partnership, HighStreet Partners is entitled to
compensation for its services in the form of a management fee (the “Management Fee”).
Management fees are billed on a quarterly basis, in advance, as more fully described in the
Private Placement Memorandum (“PPM,” as supplemented from time to time), limited
partnership agreements, investment advisory agreements, including the Management Agreement,
subscription documents and other applicable constituent fund documentation of the Partnership
(the “Client Constituent Documents”).
As set forth in Item 6 below, HighStreet Partners is also eligible to receive performance-based
allocations or “carried interest” allocations in respect of realized investments. The Client
Constituent Documents include further details on fees, compensation and related matters.
The Management Fee and performance-based allocations are either withheld from distributions
or invoiced at an appropriate time pursuant to a capital call notice.
In addition to HighStreet Partners’ Management Fee and performance-based allocations (see
Item 6 below), investors will bear indirectly any fees and expenses charged by third parties to the
Partnership, and deducted directly from the Partnership. Those fees will vary, but typically
include professional fees such as legal and accounting fees and fees for administrative services.
Finally, certain investors that are generally related persons, close acquaintances, and employees
of HighStreet Partners and their family members and family-related vehicles (“HighStreet
Partners Investors”), may invest in the Partnership and not pay Management Fees and/or
performance-based allocations in connection with their investment in the Partnership.
Notwithstanding the foregoing, such investors will directly pay for their pro rata share of certain
Partnership expenses (as described below).
Additional Fees and Expenses:
HighStreet Partners’ Management Fees, performance-based allocations and the expenses
described above, are not inclusive of all the fees which the investors may bear. Additionally,
HighStreet Partners typically engages third party service providers, such as custodians,
administrators and/or auditors, on behalf of the Partnership. The following is a list of fees and/or
expenses that the Partnership may pay directly to third parties. This list is not intended to be
exhaustive; prospective and existing investors in the Partnership are advised to review the
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applicable Client Constituent Documents for a more extensive description of the fees and
expenses associated with an investment in the Partnership.
Legal Fees
Regulatory Filing Fees
Expenses Related to HighStreet Partners’ Compliance Matters and Reporting Obligations
to the Extent They Relate to the Partnership’s Activities
Administrative Fees
Consultant Expenses
Technology Expenses
Accounting Fees
Taxes
Audit Fees
Brokerage Commissions
Transaction Fees
Custodial Fees
Travel and Entertainment
Research-Related Expenses
Broken-Deal Expenses
Expenses Associated with the Preparation of the Partnership’s Periodic Reports and
Related Financial and other Statements
Expenses of Investor Meetings
Expenses of any litigation involving the Partnership or entities in which the Partnership
has an investment and the amount of any judgments or settlements paid in connection
therewith
Expenses incurred in connection with complying with provisions in investor side letter
agreements
Investors in the Partnership are allocated their pro rata share of such additional fees and expenses
for the time period they are invested in the Partnership. Most staff out-of-pocket travel and
entertainment expenses in connection with the Partnership’s transactions are treated as
Partnership expenses.
HighStreet Partners and its affiliates may also receive break-up and topping fees, transaction
fees, financial advisory fees, monitoring and director fees, commitment, organization, financing,
divestment, investment banking, consulting, syndication, capital markets advisory fees and other
similar fees for arranging acquisitions and other major financial restructurings and other fees and
annual retainers from or with respect to persons in which the Partnership acquires or holds
investments and from unconsummated transactions. The Management Fee borne by investors in
the Partnership and paid to HighStreet Partners may be reduced in certain circumstances as
described in the offset provisions in the Client Constituent Documents. HighStreet Partners may
also engage and retain on behalf of the Partnership and/or its portfolio companies strategic
advisors, consultants and other similar professionals who are not employees or affiliates of
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HighStreet Partners and who may, from time to time, receive payments from, or allocations with
respect to, portfolio companies, and such amounts will not offset the Management Fee paid by
the Partnership.
Item 6 – PERFFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT
In addition to the Management Fees described in Item 5 that are received by HighStreet Partners,
HighStreet Partners will receive a portion of the profits of investment proceeds from the
Partnership with respect to each investor (other than HighStreet Partners Investors), as described
in the Client Constituent Documents.
The fact that HighStreet Partners is in part compensated based on the performance of the Funds
may create an incentive for HighStreet Partners to make investments on behalf of investors that
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