ITEM 5 FEES AND COMPENSATION
Management Fees and Performance-Based Fees
The Manager negotiates terms regarding fees, equity participation, other compensation and
expense reimbursements on a case-by-case basis and does not maintain a standard fee schedule for
Clients. Fees and other compensation paid by different Clients may vary even when the Clients
receive the same or similar services from the Manager. Prospective and existing Clients and their
investors should refer to a Client’s Governing Documents for specific details regarding
management fees, structuring fees, incentive or performance-based fees or allocations, equity
participation or compensation, expenses and other fee-related issues. Except as otherwise
described in the applicable Governing Documents, expenses, management fees, incentive fees,
equity participation or compensation and any other fees are expected to be paid over the term of
the advisory relationship. Certain Clients may have restrictions in their Governing Documents,
due to investment strategies focused on investing in illiquid securities or otherwise, that limit
withdrawal, redemption, transfer and termination rights.
The Manager may receive management fees or structuring fees based upon a percentage of
committed capital or the cost basis or fair market value, as determined by the Manager or its
designee, of a Client’s assets under management, based upon a flat-fee arrangement, or based upon
any other standards agreed to with the Client. The Manager may also receive other forms of
compensation, including receiving equity stakes in and/or other economic benefits from a Client.
In certain cases, the Manager’s right to receive management fees or structuring fees may be subject
to the availability of funds in accordance with the priority of payments described in the Client’s
Governing Documents.
Management fees or structuring fees may be payable up front or on a periodic basis. Such
fees may be paid via direct deduction from a Client’s account, by adjustment to the purchase price
of securities, by capital calls, or pursuant to separate invoices.
The Manager may also receive an incentive or performance-based fee or allocation.
Incentive or performance-based fees or allocations are typically only payable to the extent the
Client has received investment proceeds in excess of certain performance thresholds set forth in
the Governing Documents. In lieu of incentive or performance-based fees or allocations, the
Manager may receive other equity participation or compensation in a Client or Client investment.
Any of the foregoing fees or other compensation may be payable to the Manager or any of
its affiliates. Certain fees and other compensation may be subject to waiver or rebate and the
mechanism for applying the waiver or rebate may vary.
Expenses
Expenses charged to Clients are negotiated on a case-by-case basis, but Clients typically
bear (whether directly or by reimbursing the Manager and/or its affiliates): all fees, costs, expenses
and other liabilities associated with their investment activities, which may include sourcing,
finding, investigating, developing, evaluating, negotiating, structuring, acquiring, monitoring,
holding, administering, financing, refinancing, managing, hedging, selling, exchanging or
otherwise disposing of or monetizing prospective and actual investments (regardless of whether
such investments are consummated); legal, auditing, consulting, accounting, valuation, appraiser,
regulatory compliance, travel, data provider (including management systems and software),
custodian, subcustodian, depositary, transfer agent, disbursal, brokerage, registration, origination,
servicing, administrator and other third party services; research and software expenses; support
services (including data processing, trading, settlement, client relations, accounting, legal and tax
support and other services), outsourced to third party service providers; legal, compliance,
custodial, depositary, trading, settlement, risk management, client relations, auditing, accounting
and banking costs, fees and expenses, including for example, costs, fees and expenses attributable
to legal, compliance, trading, settlement, client relations, accounting, reporting and information
management software and systems used in connection with the Client and its activities as well as
those associated with the preparation of financial statements, tax returns and Schedule K-1s, the
filing of various foreign tax withholding and treaty forms and the representation of the Client (or
its investors) by the tax matters partner; appraisal and valuation costs, fees and expenses, including
costs, fees and expenses of independent appraisal or valuation services or third party vendor price
quotations; asset-level costs, fees and expenses, including asset management, loan servicing, credit
facility, guarantee, letter of credit or similar credit support or one or more other similar financing
transactions, securitization, closing, advisory, due diligence and other ancillary services in respect
of the Client’s assets; costs, fees and expenses that are classified as extraordinary expenses under
generally accepted accounting principles, and other extraordinary, nonrecurring matters; insurance
expenses; litigation and indemnification expenses, including damages and other costs, fees and
expenses relating to litigation or other matters that are the subject of the indemnification rights;
taxes and other governmental charges, fees and duties; lender licensing costs and all ongoing costs
associated with such status, including all compliance costs; and costs, fees, expenses and liabilities
relating to the incurrence and repayment of indebtedness (together with any interest and other
amounts payable thereon and fees and expenses related thereto).
Clients also generally bear all fees, costs, expenses, and other liabilities incurred related to
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