5. Fees and Compensation
Section A. Overview of Compensation Plan
W-G Capital’s fee arrangements are negotiated with individual clients and vary by type and
amount depending on the scope of services anticipated to be provided by W-G Capital. W-G
Capital intends that its clients are generally required to be “qualified purchasers”, within the
meaning of the Investment Company Act of 1940, “qualified clients” within the meaning of the
Investment Advisers Act of 1940 and “accredited investors” as defined in the Securities Act of
1933, as amended.
W-G Capital receives an annual asset management fee (the “Management Fee”) paid quarterly
by the Fund. Pursuant to the terms of an advisory agreement, the General Partner may, in its sole
discretion, waive all or a portion of the Management Fee due to the Firm with respect to any
Limited Partner.
During the investment period, the Management Fee, on an annual basis, will be equal to a
percentage of the Fund’s assets under management. The General Partner may waive any or all of
the Management Fee in its sole and absolute discretion.
Clients shall pay fees:
1. based on a percentage of assets committed to a client's real estate portfolio;
2. based on a percentage of amounts invested in fund assets; and/or
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3. based on a percentage of the net profits earned on the investments of such clients after
certain conditions are met.
In some cases, W-G Capital may be compensated using a combination of the methods listed
above.
Section B.
How fees are paid
With respect to fees, W-G Capital bills clients quarterly in arrears. W-G Capital (or an affiliate)
may also deduct fees from the Fund’s assets on a quarterly basis in arrears.
If clients were to pay fees in advance and W-G Capital’s engagement were subsequently
terminated, the client would be entitled to be reimbursed promptly for the unearned portion of
any fees, but would remain responsible for fees and any reimbursable expenses incurred prior to
termination, or as otherwise specified under the terms of the relevant contract.
Clients may be responsible for the reimbursement or direct payment of certain expenses such as
travel or legal expenses incurred for the benefit of the client. Further, W-G Capital’s fees are
generally exclusive of fees charged by any third-party investment manager or property manager,
or charges imposed by custodians, brokers or other third parties.
Some of W-G Capital’s investors may be charged directly, quarterly in arrears, an administrative
fee if such investor’s effective capital account is below a certain value. Such administrative fees
may be paid from such investor’s share of any distribution and does not reduce the investor's
capital commitment in the applicable fund.
Termination of Services: Contracts between W-G Capital and its clients generally are terminable
by either party without penalty upon 60 days notice or such other agreed upon notice period. If
an incentive fee is involved, W-G Capital may retain the right to share in certain profits
generated by its efforts, even after termination. If an engagement requires disproportionate work
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at the outset, a contract may require that total fees reach a pre-specified level to compensate W-G
Capital for its efforts (which could require a payment on termination if the contract is terminated
by the client before expiration of its initial term).
Section C.
Other Types of Fees & Expenses
ACQUISTION FEES
The General Partner, the Firm or their affiliates may receive a determined percentage of the total
costs necessary to acquire and fund each Project, including any costs related to the purchase
price and capital improvement projects, but excluding any costs required to fund cash
adjustments at closing, including working capital, prorations, prepaid expenses and similar
adjustments of the Fund in a Project.
DEVELOPMENT FEES
The General Partner, the Firm, or their affiliates may provide property development and
management services to the Fund for all development-related Projects unless the General Partner
determines otherwise in its sole discretion.
W-G Capital intends that the fees payable by the Fund for such development-related
management services shall not exceed a determined percentage of the total cost of such Project.
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OUT-OF-POCKET EXPENSES
In addition to fees, clients will be responsible for certain out-of-pocket expenses for reasonable
and direct costs incurred by W-G Capital and its affiliates in the performance of its services. For
example, the Fund pays all expenses incurred in connection with its operations, excluding the
overhead expenses of W-G Capital. These expenses include, but are not limited to: (i) various
travel expenses incurred by W-G Capital employees in connection with identifying, negotiating,
executing, researching, financing, managing, rehabilitation, disposing, or leasing potential or
actual investment opportunities for the Funds; (ii) costs and expenses incurred in connection with
board, advisory committee, or investor meetings; (iii) costs and expenses related to engagement
of third party consultants, advisors, and service providers; (iv) costs and expenses related to
insurance policies; and (v) any costs and expenses related to indemnities, contributions, taxes, or
litigation imposed or due by the Fund or its subsidiaries. These fees may also include real estate
broker fees, legal fees, closing costs, accounting fees, custodial fees, transfer taxes, and other
fees and taxes related to the real estate transactions.
CARRIED INTEREST DISTRIBUTION
The General Partner, as a partner in the Fund, will receive a portion of the profits, or carried
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