ITEM 5 – FEES AND COMPENSATION
Asset Management Fee1
The Affiliated General Partner of Kennet IV is entitled to receive a fee equal to 2.35% of Total
Commitments until the end of the investment period (5 years from the first closing date). Thereafter and
until the termination of the Fund (10 years from the original closing date), the Affiliated General Partner’s
share will be 2.35% of the acquisition costs of all investments less the acquisition costs of realized
investments. The Affiliated General Partner's Share, or non-refundable drawings on account thereof, are
calculated and paid quarterly in advance. Asset Management Fees are generally called from Fund investors’
capital commitments quarterly in advance. The proceeds of realized investments are usually applied as
soon as practicable towards repaying the Outstanding Commitments drawn down and distributing capital
gains, although proceeds can be retained for ‘recycling’ in accordance with the LPAs.
For Kennet III, the Affiliated General Partner receives an annual fee equal to 2.5% of Total Commitments
until the end of the Investment Period (5 years from the first closing date). Thereafter and until the
termination of the Fund (10 years from the original closing date), the Affiliated General Partner’s share will
be 2.5% of the acquisition costs of all investments less the acquisition costs of realized investments. The
Affiliated General Partner's Share, or non-refundable drawings on account thereof, are calculated and paid
quarterly in advance. Asset Management Fees are generally called from Fund investors’ capital
commitments quarterly in advance. The proceeds of realized investments are usually applied as soon as
practicable towards repaying the Outstanding Commitments drawn down and distributing capital gains,
although proceeds can be retained for ‘recycling’ in accordance with the LPAs.
For Kennet SPV LLC, Kennet Partners LLC will receive a fee of 2% of commitments once members have
received distributions equal to their capital contributions and a preferred return of 8% per annum.
Kennet Partners LLC does not receive a management fee from investors in Kennet SN SPV LLC.
In the event that Kennet II disposes of its investment in IntelePeer to a non-Affiliated third party, and for
so long as the Kennet Partners LLC has the right to appoint a board observer to the board of directors of
IntelePeer, Kennet INPR SPV LLC shall pay Kennet Partners LLC an annual management fee equal to 1%
of Remaining Invested Capital.
For Kennet CB SPV LLC, Kennet Partners LLC will receive a on-time administrative fee equal to 1% of
commitments.
In the event that Kennet III disposes of its investment in Conversica to a non-Affiliated third party, and for
so long as the Kennet CNV SPV LLC has the right to designate a member of the board of directors of
Conversica, Kennet CNV SPV LLC shall pay Kennet Partners LLC an annual management fee equal to 1%
of Remaining Invested Capital
Capitalized terms are defined within each respective Fund’s PPM.
Performance-Based Fee payable upon Distribution/Realization of Proceeds
For Kennet IV, and subject to a clawback, the founder partners are eligible to receive a percentage of profits
on any distributions made by the Funds. All income and realization proceeds (except in the case of Short-
Term Investments as described below) will, after satisfying any expenses and liabilities of the Fund, be
distributed as follows:
1. first, to the investors (pro rata to their respective Commitments) until the investors have been repaid
their Outstanding Loans;
2. second, to the investors (pro rata to their respective Commitments) in payment of an amount equal
to the Preferred Return;
3. third, to the Founder Partner until it has received an amount equal to 20% of the cumulative
distributions of Income Proceeds and Capital Proceeds in excess of amounts distributed under (2)
above; and
4. fourth, as to 80% to the investors (pro rata to their respective Commitments) and 20% to the
Founder Partner.
For Kennet III, and subject to a clawback, the founder partner is eligible to receive a percentage of profits
on any distributions made by the Funds. All income and realization proceeds (except in the case of Short-
Term Investments as described below) will, after satisfying any expenses and liabilities of the Fund, be
distributed as follows:
1. first, to all the investors (pro-rata to the amount of their respective Commitments) until the investors
have been repaid their Outstanding Loans; and
2. second, 80% to the investors and 20% to the Founder Partner as carried interest, subject to certain
retention provisions.
Income to the Fund from interest on Short Term Investments will be distributed directly to the investors
pro rata based on their Commitments.
For Kennet II, the performance-based fee mechanism is similar but not identical to Kennet III.
Kennet SPV LLC will pay carried interest at a rate of 15% after payment of members’ capital contributions,
the preferred return of 8% per annum and the one-time management fee. Kennet SN SPV LLC, Kennet
INPR SPV LLC, Kennet CB SPV LLC and Kennet CNV SPV LLC will pay similar, but not identical,