| MANAGEMENT FEE AND RELATED PARTIES | MANAGEMENT FEE AND RELATED PARTIES Management As compensation for its services to the Fund, the Manager, commencing as of the date on which capital contributions are due in connection with the first capital call to the members of the Company, will receive an investment management fee from the Fund (the “Management Fee”). The aggregate annual amount of Management Fee for each annual period (which will be comprised of four whole fiscal quarters and which, in the case of the first year, will commence on the first day of the first fiscal quarter commencing on or following the first contribution due date) will be calculated as a percentage of committed capital, is as follows: Management Fee Year 1 1.575% Year 2 1.600% Year 3 1.575% Year 4 1.500% Year 5 1.250% Year 6 0.900% Year 7 0.600% Year 8 0.350% Year 9 0.150% There will be no Management Fee payable after the ninth-year anniversary of the first capital contribution date. Related Parties Certain officers and directors of the Fund also serve as officers and directors of the Manager. The Articles of Incorporation of the Fund provide for indemnification of directors, officers, employees and agents (including the Manager) of the Fund to the full extent permitted by applicable state law and the 1940 Act, including the advance of expenses and reasonable counsel fees. The Articles of Incorporation of the Fund also contain a provision eliminating personal liability of a Fund director or officer to the Fund or its shareholder for monetary damages for certain breaches of their duty of care. For this reason, the Fund acquired a directors and officers insurance policy. Liabilities to the Manager The liability due to Manager is comprised of prepaid expenses, organizational costs, directors' fees and other expenses paid and to be paid by the Manager on behalf of the Fund. The Fund intends to reimburse the Manager once the Fund commences investment operations. As of March 31, 2024 and December 31, 2023, the total amount due to the Manager was $456,290 and $292,754, respectively The Fund anticipates that the Manager will continue to pay all expenses on behalf of the Fund until operations commence, and that the Fund will then reimburse the Manager for those Fund expenses. Transactions with WTI Fund X, Inc. (“Fund X”) The Manager also serves as investment manager for Fund X. The Fund’s board of directors intends that so long as Fund X has capital available to invest in loan transactions with final maturities earlier than December 31, 2031 (the date on which Fund X’s existence automatically expires), the Fund will make debt investments in each portfolio company in which Fund X makes debt investments . Allocations will be determined by the respective fund boards, so long as the Fund has capital available to invest. The ability of the Fund to co-invest with Fund X, and other clients advised by the Manager, is subject to the conditions (“Conditions”) with which the funds are currently complying while seeking certain exemptive relief from the Securities and Exchange Commission (“SEC”) from the provisions of Sections 17(d) and 57 of the 1940 Act and Rule 17d-1 thereunder. To the extent that clients, other than Fund X, advised by the Manager (but in which the Manager has no proprietary interest) invest in opportunities available to the Fund, the Manager will allocate such opportunities among the Fund and such other clients in a manner deemed fair and equitable considering all of the circumstances in accordance with the Conditions. Intercreditor Agreements In all transactions in which the Fund and other funds managed by the Manager invest or those in which another lender(s) has either invested or may later invest (or in the event a successor fund is raised, in which the Fund and the successor fund invest), it is expected that the Fund and other funds managed by the Manager (or the successor fund as the case may be), and/or the other lender(s) will enter into an intercreditor agreement pursuant to which the Fund and other funds managed by the Manager (or the successor fund), and/or the other lender(s), along with any predecessor funds which still have a balance outstanding, will cooperate in pursuing their remedies following a default by the common borrower. Generally, under such intercreditor agreements, each party would agree that its security interest would be treated in parity with the security interest of the other party, regardless of which security interest would have priority under applicable law. Accordingly, proceeds realized from the sale of any collateral or the exercise of any other creditor’s rights will be allocated between the Fund and other funds managed by the Manager, and any predecessor funds as described above, pro rata in accordance with the amounts of their respective investments. An exception to the foregoing arrangement would occur in situations where, for example, one of the lenders financed specific items of equipment collateral; in that case, usually the lender who financed the specific assets will have a senior lien on that asset, and the other lenders will have a junior priority lien (even though they may ratably share liens of equal priority on other assets of the common borrower). As a result of such intercreditor agreements, the Fund may have less flexibility in pursuing its remedies following a default than it would have had had there been no intercreditor agreement, and the Fund may therefore realize fewer proceeds. In addition, because the Fund and Fund X (or the successor fund) invest at the same time in the same borrower, such borrower would be required to service two loans rather than one. Any additional administrative costs or burdens resulting therefrom may make the Fund a less attractive lender and may make it more difficult for the Fund to acquire such loans. |
