Item 5: Fees and Compensation
Compensation and Fee Schedules
The fees applicable to each Fund are set forth in detail in each Fund’s Governing
Documents. A brief summary of those fees is provided below:
As compensation for investment management services, North Shoreline generally receives
a management fee from each Fund. Generally, each NSV Fund pays North Shoreline (or an
affiliate thereof) 2.0% of the aggregate capital contributions made to the NSV Fund at each
closing (excluding capital contributions made by the Manager or its affiliates). In addition,
as described in more detail in Item 6 below, the Manager is entitled to receive
performance-based allocations or fees from certain of the NSV Funds, in the form of a
percentage of proceeds realized upon a liquidation event, as set forth in such Fund’s
Governing Documents.
North Shoreline intends that each North Shoreline Fund will pay North Shoreline (or an
affiliate thereof) a management fee ranging from 1.0% to 1.5% per annum of such North
Shoreline Fund’s net asset value. Fees will be paid by the North Shoreline Funds either
quarterly or monthly in advance. Each investor’s share of a North Shoreline Fund’s
management fees will be deducted from the net asset value of such investor’s interests in
applicable North Shoreline Fund. If investments of capital are made to a North Shoreline
Fund on any day other than the first day of a quarter, the applicable management fee payable
with respect to such capital will be pro-rated for the remaining portion of the quarter and
charged at the time of such investment. Generally, no reimbursements of management fees
will be made for any investments in a North Shoreline Fund that are withdrawn prior to the
end of a calendar quarter, or in the case of any investment management agreements between
North Shoreline (or an affiliate thereof) and a North Shoreline Fund are terminated prior to
the end of a calendar quarter.
North Shoreline (or its affiliates) may, in its sole discretion, reduce, waive or calculate
differently the fees with respect to certain investors, including members, partners,
stockholders, directors, officers, affiliates or employees of North Shoreline, its affiliates, or
the Funds, or such person’s family members and trusts or other entities established for the
benefit of such person or his or her family. North Shoreline may enter into “side letters” or
similar agreements with certain investors in the Funds, granting such investors specific
rights, benefits or privileges that are not made available to investors generally.
Deduction of Fees
North Shoreline is authorized under the Governing Documents to charge and deduct fees
directly from the assets of the Funds, at the times and in the amounts described above.
Other Fees and Expenses
In addition to the management fees payable to North Shoreline and the performance
allocations to the Manager (with respect to certain NSV Funds), each Fund (and,
indirectly, the investors therein) will pay the expenses disclosed in the applicable Fund’s
Governing Documents. Each Fund pays for all costs and expenses that in the good faith
judgment of the Manager are incurred by or arise out of the formation, operation or
activities of the Fund, the Fund’s investment in any Portfolio Fund (with respect to the
North Shoreline Funds), or the Fund’s investment in any single venture, growth-stage
private technology company, or other investment (each a “Portfolio Investment” and
together, the “Portfolio Investments”) (with respect to the NSV Funds), including but not
limited to: (a) all out-of-pocket expenses incurred by or on behalf of the Manager or any
affiliate(s) thereof in connection with the organization of the Fund and the offering of
interests in the Fund and the Fund’s investment in any Portfolio Fund or Portfolio
Investment (including fees and disbursements of attorneys, accountants and other
professionals and other fees and expenses); (b) the costs and expenses incurred in
connection with maintaining the organizational existence of the Fund and its investment in
each Portfolio Fund or Portfolio Investment; (c) fees and expenses of administrators,
custodians, outside counsel, consultants, accountants (including audit and certification
fees) and other similar outside advisors in connection with the Fund and each Portfolio
Investment; (d) any taxes, fees or other governmental charges levied against the Fund or on
its income or assets or in connection with its business or operations; and (e) all other costs
and expenses of the Fund or the Manager in connection with the Fund (such as repayment
of amounts borrowed, costs of insurance, costs of litigation, liabilities, obligations,
indemnification and costs of winding-up and liquidating the Fund).
Additionally, each North Shoreline Fund’s investment in Portfolio Funds will be subject to
the fees and expenses of the individual Portfolio Funds, including a pro rata share of
brokerage or other transaction costs on securities trades, as well as management fees and
performance-based fees or allocations payable by the Portfolio Funds. The managers of
certain of the Portfolio Funds have agreed to rebate to Zanbato Securities between 10% and
30% of the annual management and other fees paid by each North Shoreline Fund. See Item
12 for additional information.
As described in more detail in Item 10 below, North Shoreline’s broker-dealer affiliate,
Zanbato Securities LLC (“Zanbato Securities”) and its registered representatives may
receive fees or commissions in connection with the sale of interests in the Funds, and in
connection with the Funds’ purchase and/or sale of Portfolio Investments or interests in
Portfolio Funds. See Item 12 for information regarding brokerage practices.
North Shoreline may compensate third parties that assist with new investment
identification and pre-investment due diligence for the Funds through payment of a fixed
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