Common use of Performance Fees Clause in Contracts

Performance Fees. The Company will also pay a Performance Fee (the “Performance Fee”) equal to the sum of (a) 10% of the Income, until such time as the annual return for such Fiscal Year-end over the Outperformance Threshold is equal (after taking into account the payment of such current period Performance Fee) to a 10% annual return (such annual return measured as the Income over the Outperformance Threshold) (the “Base Performance Fee”) plus (b) 25% of the Excess Income, in each case, if any, on the HPS Investment Account, calculated and payable as of each Fiscal Year-end and the date on which this Agreement is terminated and not renewed; provided, however, that the Performance Fee for any Fiscal Year shall not exceed 17.5% of the Income for such Fiscal Year. The Performance Fee will be paid in accordance with Section 4 of this Fee Schedule. If, after consultation with the Board of Directors, the Investment Manager determines to separately account for any illiquid investments in a so called “side pocket” (e.g. mezzanine and originated loans), the Performance Fee on such investments will be calculated and paid on the realized gain, if any, on such investments upon disposition.