Item 5: Fees and Compensation
As investment adviser to the Fund, we receive an annual management fee equal to 1.25% of the
invested capital of the Fund.
The management fee is paid by the Fund quarterly in advance. The investment management
agreement of the Fund may be terminated upon the dissolution of the Fund. Upon termination,
management fees that have been prepaid are returned on a pro rata basis.
Under the Fund’s governing agreement, a WestRiver Manager is entitled to receive a carried
interest distribution. The carried interest distribution is an amount equal to a percentage of
the profits from each portfolio investment made by the Fund after the return of invested capital
and a preferred return to investors.
The amount of, and the manner and calculation of, the management fees and carried interest
distribution for the Fund is set forth in the Governing Documents.
We do not and will not receive sales commissions in connection with sales of interests in the
Fund.
The Fund bears all legal, accounting and other fees, costs and expenses of and incidental to
organizing and funding the Fund and the general partner and manager of the Fund up to a
certain amount as set forth in the Governing Documents of the Fund. The Fund will also bear
the operational costs and expenses of the Fund. Such costs and expenses include, but are not
limited to: (i) legal, auditing, custodial, consulting, financing and accounting fees and expenses
of the Fund; (ii) expenses associated with preparation of the Fund’s financial statements,
reports to Fund investors and tax returns; (iii) out-of-pocket expenses and other expenses
incurred in connection with the operation of the Fund under the laws of the jurisdiction in
which it is organized; (iv) out-of-pocket expenses of transactions not consummated; (v)
expenses of appraisers and consultants; (vi) expenses of litigation and indemnification; (vii)
insurance premiums; (viii) expenses of advisory committee meetings and meetings of the Fund
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investors; (ix) other expenses associated with the acquisition, holding and disposition of the
Fund’s portfolio investments including extraordinary expenses; (x) any taxes, fees or other
governmental charges levied against the Fund; and (xi) costs of dissolving and winding up the
Fund.
Fund investors may also bear a portion of any fees or expenses charged by any special purpose
vehicles that have been formed to facilitate portfolio investments by the Fund or its investors
for tax, regulatory or economic purposes.
From time to time, we or our affiliates may provide property management, servicing or other
services to the Fund and its investments. We and/or our affiliates will be compensated
therefor on the terms described in the Governing Documents.
In addition, the Fund may engage us or an affiliate to provide financial advisory, placement,
underwriting, investment banking, loan servicing, insurance, real estate, brokerage, due
diligence or other services to the Fund. Any fees or other amounts earned in respect of the
rendition of such services will not be less favorable to the Fund than those generally available
from experienced and unaffiliated parties.
The existence of acquisition and disposition fees, if any, create an incentive to acquire or dispose
of assets based on compensation received versus a Fund’s needs; however, the other
components of our fee schedules substantially reduce that risk. Furthermore, no employee is
compensated on a transactional basis.