Item 5: Fees & Compensation
Management Fee payable to Kalnin:
The Fund generally compensates Kalnin for its advisory services through the payment of a management fee
(the “Management Fee”). The Management Fee budget and calculation is disclosed in the Fund investor’s
Limited Partnership Agreement, and is generally equal to the Budgeted Amount, as defined, to cover
quarterly operating costs of Kalnin Ventures in respect of Fund business, as amended from time to time and
approved by the investor. Such fees are paid on the first day of each Quarterly Period until termination of
the Fund.
Performance-Based Fee payable to the General Partner upon Distribution/Realization of Investment
Proceeds:
Kalnin Capital Partners LP, (the “General Partner”), is also eligible to receive a percentage of profits on
distributions made by its respective funds. All such performance-based fees will be paid in accordance with the
provisions of the fund’s governing documents, such as the private placement memorandum and limited
partnership agreement.
Expenses
The Fund will bear all costs and expenses incurred in purchases, sales or exchanges made in connection with the
Fund’s investment activities to the management company or its designee per the budgeted amounts on
a quarterly basis as outlined in the funding agreement. Such expenses include, without limitation:
Private placement fees, finder’s fees, lender fees and interest on borrowed money, real property or
personal property taxes on investments;
Brokerage fees, legal fees, audit and accounting fees, investment banking and consulting fees, third-
party fees relating to investments or proposed investments, and fees associated with the Fund’s
perfecting its interest in collateral (if any);
Any other property costs related to the transactions, collection costs and the costs paid to third parties
with respect to the working out of problem transactions, disposition and remarketing costs paid to
third parties, taxes and governmental fees applicable to the Fund on account of i t s operations,
registered agent fees and fees incurred in connection with the maintenance of bank or custodian
accounts;
Expenses incurred by the General Partner in serving as the tax matters partner;
The cost of liability and other insurance premiums;
All out-of-pocket expenses of preparing and distributing reports to Fund investors and Fund meetings;
All legal and accounting fees relating to the Fund and its activities;
All costs and expenses arising out of the Fund’s indemnification obligations;
All expenses not reimbursed by portfolio companies associated with managing and monitoring such
companies and all expenses that are not normal operating expenses;
All organizational and syndication costs, fees and expenses incurred by or on behalf of Kalnin Ventures
or the General Partner in connection with the formation and organization of the Fund Group and the
General Partner, including legal and accounting fees and expenses incident thereto, up to a maximum
amount for each Fund as described in the Fund’s governing documents; and
All liquidation costs, fees and expenses incurred by Kalnin Ventures and the General Partner in
connection with the liquidation of the Fund at the end of the Fund’s term, specifically including legal
and accounting fees and expenses.
In addition to Kalnin’s full-time investment professionals, Kalnin engages the services of certain operating
advisors and consultants to work actively with Kalnin on evaluating new transactions, as well as providing
strategic insights related to investments. These advisors are not partners or employees of Kalnin or any of
its affiliates. The compensation of such individuals is generally treated as an expense of the Fund.