Item 5 - Fees and Compensation
The Adviser will receive an asset-based management fee from each private fund, generally equal
to a percentage of capital committed per annum during investment period, that is typically payable
quarterly in advance, as further described in the applicable fund governing documents.
Management fees typically step down after prescribed time periods or switch to cost basis of
actively invested capital, as further described in the applicable fund governing documents. If the
Adviser’s management fee arrangement with a private fund is terminated, management fees will
be charged on a pro rata basis through to the date of termination, and any fees paid in advance but
not earned will be refunded. The general partner of the private funds will generally make capital
calls on fund investors for the amount of the Adviser’s management fees and pay the amounts
received to the Adviser. In addition to the management fees described above, the Adviser will
generally also be entitled to receive a carried interest allocation from the private funds, generally
equal to 20% of realized profits, as further described in the applicable fund governing documents.
Such carried interest represents a portion of a private fund’s net investment profits.
It is anticipated that the Adviser may receive similar asset-based management fees and carried
interests from the new private funds, including co-investment vehicles, that it organizes in the
future. Investors in the private funds should review the applicable fund governing documents
carefully for a full description of the fee revenues and other compensation that the Adviser may
receive from such private fund.
The management fees and carried interest are generally subject to waiver or reduction by the
general partner with respect to some or all of a private fund’s investors in the general partner’s sole
discretion, as further described in the applicable fund governing documents.
Management fees will typically be reduced by 100% of any director’s fees (including options, warrants
and other non-cash forms of compensation), consulting fees, transaction fees, break-up fees (net of
transaction costs borne by the recipient) or other fees or compensation (other than expense
reimbursements) received by the general partner, Adviser, or affiliates from any entity in which the
private funds have an interest or any placement fees paid with respect to limited partnership interests in
the private funds (the “Offset Fee”) shall be deducted in full from the management fee otherwise payable
by the private funds in the calendar quarter following the date of receipt of such fees. In the event such
Offset Fees exceed the management fee payable for a given period, subsequent period management fee
shall be reduced by such excess amount.
In general, each private fund will bear all costs, fees, and expenses incurred in connection with
organizational and syndication of the private fund’s general partner (or the Adviser) in connection
with the formation and organization of the private fund including legal and accounting fees and
expenses.
In addition, the private funds will bear all costs and expenses incurred in the sourcing,
development, investigation, purchase, holding, monitoring, sale or exchange of securities (whether
or not ultimately consumed) including but not by way of limitation: private placement fees;
finder’s fees; interest on and fees and expenses arising in connection with indebtedness (including
guarantees or other credit support); real property or personal property taxes on investments,
including documentary, recording, stamp and transfer taxes; brokerage fees or commission or other
similar charges (including any merger, transaction or similar fees payable to third-parties); broken
deal expenses; legal, audit, appraisal, accounting, consulting, advisory or professional fees and
expenses relating to investments or proposed investments; and fees and expenses of third party
valuation agents. The private funds shall also bear: all expenses incurred in connection with the
investigation, prosecution or defense of any claims by or against the private funds, including
claims by or against a governmental authority; the cost of liability and other insurance premiums
and related bonds on all policies obtained for the benefit of the private funds, the general partner
or the Adviser; all costs and expenses arising out of the private fund's indemnification obligation
pursuant to the governing documents. The private funds shall bear all taxes applicable to the private
funds on account of its operations and any other taxes, fees and other governmental charges levied
against the private fund; fees incurred in connection with the maintenance of bank or custodian
accounts; out of pocket regulatory compliance expenses incurred in connection with the
management of the private funds (but not those related to the Adviser or general partner); all
expenses incurred in connection with applicable securities laws or regulations relating to portfolio
companies of the private funds; expenses incurred by the general partner in serving as the
partnership representative; all out-of-pocket expenses of preparing and distributing reports
(including expenses associated with the preparation or distribution of the private funds’ financial
statements, tax returns and Schedule K-1 s or any other reporting to the investors) to investors;
out-of-pocket costs associated with the private funds; all legal, accounting (except bookkeeping
which shall be paid by the general partner or the Adviser), and audit fees relating to the private
funds and its activities; all fees and expenses relating to outsourced appraisal and valuation
services, and all other expenses, charges or liabilities (including, without limitation, litigation) that
are not normal operating expenses. The private funds shall bear all liquidation costs, fees, and
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