Item 5 – Fees and Compensation
As more specifically set forth in the limited partnership agreements, the limited partners of the Funds pay to
BCM an annual management fee, payable semi-annually and called on January 15th and July 15th (i.e., in
each case, partially in arrears and partially in advance) each year. During the capital commitment
period of the Funds, the annual management fee is 2% of the limited partners’ aggregate capital
commitments. After the expiration of such commitment period, the management fee percentage is
reduced by 0.2% each year during the remaining term of the Funds.
Management fees are generally paid to BCM pursuant to capital calls made semi-annually on the limited
partners of the Funds. However, if and to the extent the Funds have cash on hand as a result of dividends
or interest income received from portfolio investments or proceeds from the disposition of a portfolio
investment, BCM and BCA II, as the general partner of the Funds, have the discretion to pay management
fees to BCM from such cash on hand.
In addition to the management fee described above, BCM earns compensation for services provided to
portfolio/operating companies as disclosed directly to investors.
BCA II is entitled to receive performance fees in the form of a carried interest on the profits of the Funds.
See Item 6 below. If BCA II is then entitled to carried interest payments, those payments are made from
time to time when cash or other distributions are otherwise made to the partners of the Funds.
The Funds bear all of the organizational and offering expenses (including legal, travel, accounting, filing
and other expenses) incurred in connection with the formation of the Funds, BCA II and any other necessary
related entities, up to a specified maximum amount set forth in the related limited partnership agreements
of the Funds. The Funds reimburse BCA II o r B C M for such expenses to the extent that any such
expenses are borne by BCA II directly on behalf of the Funds.
The Funds are also responsible for all other expenses attributable to its activities, whether incurred
directly by the fund or by BCA II or BCM on its behalf, including but not limited to:
• the fees and expenses relating to consummated portfolio investments, contemplated but
unconsummated investments, and temporary investments, including but not limited to consulting,
financing, legal and accounting fees, travel expenses, lodging, meals and other similar out-of- pocket
expenses of BCA II, BCM, or their respective affiliates in connection with such investments
(which may include the use of private aircraft owned by BCM or an affiliate, in which event
the cost of such travel may include amortized portions of the cost of depreciation of such aircraft)
to the extent that such fees and expenses are not reimbursed by a portfolio company or other third
person;
• legal, custodial and accounting expenses, including expenses associated with the preparation of
the Partnership’s financial statements, tax returns and Schedule K-1’s and the representation of
the Funds or the partners by tax matters partner of the Funds;
• auditing, accounting, banking, and consulting expenses;
• appraisal expenses;
• expenses related to organizing vehicles through or in which portfolio investments may be made;
• costs and expenses that are classified as extraordinary expenses under generally accepted
accounting principles;
• taxes and other governmental charges, fees and duties payable by the Funds;
• costs of reporting and distributions to the partners and of partner meetings, including but not
limited to the annual partners meeting;
• expenses relating to defaults in capital contribution funding obligations;
• expenses incurred in connection with any restructuring of the Partnership or amendments to the
Partnership agreement and other related agreements;
• compensation of members of the Investment Committee, Board of Advisors and/or Limited
Partner Advisory Board who are not employees of BCM;
• costs of winding up and liquidating the Funds;
• the Partnership’s allocable share of expenses of the Limited Partner Advisory Board incurred in
accordance with the limited partner returning any distribution that was wrongfully made to it;
• obligations and liabilities of the Funds, including
o the cost of any insurance obtained to protect Fund II or any indemnitee from potential
liabilities to third persons in connection with the affairs of the Funds and any “key man”
life insurance with respect to any member, partner or key employee of either its BCA II
or BCM for the benefit of the Funds;
o obligations to indemnify or advance expenses to any indemnitee in respect of a loss
pursuant to the partnership agreement; and
o any reasonable litigation and indemnification costs and expenses, judgments and
settlements; and
• the fees and expenses of any independent appraisers retained pursuant to the hiring of an a
nationally recognized investment banking firm, mutually acceptable to BCA II and a majority of
the members of the Limited Partner Advisory Board to review the final valuation of any
securities, and such expert’s determination shall be binding on all parties, but excluding (A)
Organizational Expenses (as defined in the partnership agreement), (B) Ordinary Operating
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