Item 5: Fees and Compensation
From each of the Funds, pursuant to the applicable Partnership Agreement, the Adviser receives
a quarterly management fee (the “Management Fee”) in connection with advisory services
provided to such Fund, and the General Partner receives a carried interest, if any, upon the sale
or disposition of investments as described in Item 6. Portfolio Companies owned by the Funds
generally compensate the Adviser for performing certain management and other services through
transaction, monitoring, advisory, investment banking, consulting, directors, break-up or other
similar fees (together, “Advisory Fees”), and such additional compensation will offset a portion
of the Management Fees otherwise payable to the Adviser as specified in the applicable
Partnership Agreement and Memorandum.
The Funds also bear certain operating expenses as described below. Principals or other current
and former employees of the Adviser or its affiliates may receive a portion of the carried interest
or other compensation received by the Adviser or its affiliates.
SOLIC Capital Partners, LP pays the Adviser, quarterly in advance, a Management Fee equal to,
on an annual basis, 2% of the aggregate commitments of the Fund’s Limited Partners, subject to
reductions at the end of its investment period and in certain other circumstances as specified in
its Partnership Agreement. Installments of the Management Fee payable for any period other
than a full three-month period generally are adjusted on pro rata basis according to the actual
number of days in such period. The Adviser, in its discretion, may agree to different fee
structures. The Management Fee generally will be payable until the end of the Fund’s term.
As described above, the Management Fee of certain Funds is reduced by a portion of any
Advisory Fees paid by Portfolio Companies to the Adviser, the General Partner or their senior
principals and other personnel. The remaining amount of such fees received by the foregoing
persons without offset against the Management Fee is hereinafter referred to as “Supplemental
Fees.” Both the amount of Advisory Fees offset, and the amount of Supplemental Fees retained
without offset may be substantial. The Adviser and/or its affiliates generally have discretion over
whether to charge Advisory Fees to a Portfolio Company and, if so, the rate, timing and/or
amount of such fees. The receipt of such fees may give rise to conflicts of interest between the
Funds, on the one hand, and the Adviser and/or its affiliates on the other hand. Portfolio
Company-related fees may also include amounts prepaid in anticipation of future services or
otherwise accelerated in certain situations (e.g., an initial public offering), which will be offset
against the applicable Management Fee to the extent set forth in the relevant Partnership
Agreement. Although such prepaid or accelerated fees generally will be based on the anticipated
level and duration of services that the Adviser believes at the time of such prepayment or
acceleration are likely to be provided to the Portfolio Company, over time, they may be greater
or less than the amount that is ultimately incurred with respect to services provided to such
Portfolio Company.
Additionally, as further detailed in the applicable Memorandum and Partnership Agreement of
each Fund, employees of the Adviser or its affiliates may serve as an officer or in an interim
management role to a Portfolio Company, and the associated fees will not be offset against the
Management Fee. Furthermore, certain entitles affiliated with the Adviser may provide services
to the Adviser or its Portfolio Companies that could otherwise be purchased from unaffiliated
third-party sources, and the associated fees will be retained by the affiliated entities and will not
be offset against the Management Fee.
Under the Partnership Agreement, the Adviser may waive a portion of the Management Fee.
The General Partner does not pay a Management Fee. Employees of the Adviser or its affiliates
who invest in a Fund invest through the General Partner so in such instances, employee investors
generally will be exempt from payment of the Management Fee and carried interest with respect
to such Fund.
The General Partner and the Adviser will pay all of their own operating and overhead costs and
expenses, including rent and the salaries and benefits of both transacting and operating
personnel, other than the salary and benefits of any person that is serving in a senior management
role of a Portfolio Company. The Fund will pay (or reimburse the General Partner or Adviser
for) the costs and expenses associated with the Fund’s operation (the “Fund Expenses”),
including, without limitation: (i) Management Fees; (ii) Organizational Expenses up to a cap
specified in the Partnership Agreement; (iii) expenses related to evaluating and negotiating
prospective and actual investments, including related travel expenses (whether or not the
potential investment is made by the Fund); (iv) expenses related to acquiring, holding, managing
and disposing of actual investments; (v) expenses related to the Advisory Committee; (vi) Fund
indemnification obligations; (vii) expenses associated with the engagement of professionals;
(viii) expenses associated with tax and accounting reports; (ix) legal fees; (x) financial regulatory
fees and assessments of the Fund or the General Partner; (xi) marketing expenses; (xii) insurance
(including liability insurance and other coverage for the benefit of the Fund, the General Partner,
the Adviser and their respective personnel); (xiii) the costs and expenses of any litigation
involving the Fund; and (xiv) other ordinary or extraordinary expenses associated with the
Fund’s administration and operation that are not borne by the General Partner or the Adviser.
The Adviser will, when appropriate, seek reimbursement of the above expenses from Portfolio
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