ITEM 5 FEES AND COMPENSATION
Maxim Capital Group shall be entitled to an annual management fee, hereinafter referred to as the (the
"Management Fee"), accruing from the Funds, whereby Fund I shall remit payment on a quarterly basis
in arrears, while all subsequent Funds (or, in whole or in part, through the REITs) shall render payment of
the Management Fee on a quarterly basis in advance. The Management Fee is 1.5% (per annum) of each
investor’s contributed capital. The Management Fee may be paid out of distributable proceeds, borrowings
under credit facilities or capital contributions from investors. Maxim reserves the right to reduce or waive
the Management Fee charged to one or more investors, including investors that are affiliates of or otherwise
associated with, Maxim.
The Fund’s General Partner is allocated and distributed a carried interest equal to 25% of the realized net
profits in excess of a hurdle rate, with respect to each portfolio investment that has been considered default
pursuant to its governing documents. The General Partner does not receive any carried interest or other
performance fee on investments not considered in default pursuant to its governing documents. Amounts
representing repayments of principal and other invested capital with respect to default investments will be
retained by the Funds and used to make investments or pay expenses or other obligations of the Funds.
Pursuant to the terms of an applicable investment advisory agreement, if the investment advisory
relationship is terminated (or funds are withdrawn) as of any date other than the last business day of the
applicable payment period, Maxim typically charges a prorated management fee and/or other specified fees
based on the ratio that the number of days for which investment advisory services were rendered bears to
the total number of days in that payment period, and Maxim returns any unearned fees to the Funds or
investor (as applicable).
With respect to all Investments, excluding those pursued by Fund IV, the following methodology shall be
applied: any origination fees provided by borrowers shall benefit Maxim or its affiliated operating entities,
rather than the Funds. In connection with such origination fees, Maxim or its affiliated entities may receive
additional fees related to (a) the refinancing of existing indebtedness provided by Maxim, or (b) new debt
initiated by Maxim to finance the next stage of a borrower's business strategy. However, if any origination
fee exceeds 2% of the underlying loan (net of related expenses), the Funds shall be entitled to their pro-rata
share of the excess, which may be applied as a reduction of the Management Fee. Fees paid by borrowers
in connection with loan term extensions (or other extensions) shall be divided equally between Maxim (or
its affiliated operating entities) and the Funds (which may also be applied as a reduction of the Management
Fee).
As for Fund IV, any initial, extension, or similar fees charged in relation to Investments or prospective
Investments (including, but not limited to, additional origination and extension fees in connection with (a)
the refinancing of existing debt provided by Fund IV, or (b) new debt issued by Fund IV to finance the
subsequent stage of a borrower's business plan) and collected by Maxim or its affiliated operating entities
shall accrue to the benefit of Maxim or its affiliated operating entities, and not for the benefit of Fund IV
or limited partners. However, in the event that such fees exceed 2% of the underlying loan (net of related
expenses), 50% of the excess fees received by Maxim or its affiliated operating entities shall be applied to
reduce the Management Fee, proportionally attributable to Fund IV's interest in the loan or investment.
Maxim is entitled to earn loan servicing fees for the Funds in accordance with the provisions set forth in
the limited partnership agreement. In compliance with applicable law (including ERISA, if and to the extent
applicable), the Funds (or a subsidiary) may engage or retain general partner affiliates to render services
such as property management, servicing, special servicing, and asset management. These services must be
provided on an arm's length basis at market terms and pursuant to a written agreement stipulating fees and
compensation that are no greater than those obtainable from an independent third party for comparable
services. Specifically, for the Funds, Maxim or one or more of its subsidiaries may engage Maxim Capital
Funding, LLC, or another affiliated service provider to perform loan servicing for the Investments. In
connection with these services, the Funds will pay servicing fees to Maxim Capital Funding LLC (referred
to as "Loan Servicing Fees"). Any Loan Servicing Fees paid to Maxim Capital Funding, LLC or another
affiliated service provider will be subject to the terms of the agreement, and the Loan Servicing Fees shall
not exceed 0.15% of the loan balance. Furthermore, Maxim Capital Funding, LLC and/or its affiliates may
also receive processing fees in connection with the Investments of the Funds. It is important to note that the
Income Fund does not have loan servicing fees associated with its investments.
Maxim and its affiliated entities are responsible for all of their respective day-to-day operating expenses
and overhead expenses, including, without limitation, office expenses (such as rent, computers, and
computer software and office supplies), employee compensation and expenses relating to due diligence and
closing expenses not borne by borrowers or prospective borrowers. For a discussion of expense paid by
investors in the Funds, please refer to the applicable offering documents.
With respect to the SMA’s, the Firm’s investment management fees, advisory fees, and expenses a client
may pay in connection with the advisory services are negotiated with the clients pursuant to the terms of
the investment management agreement.