Item 5 – Fees and Compensation
As more specifically set forth in the limited partnership agreements and management agreement, the limited
partners of the Funds pay to BCM an annual management fee, payable semi-annually and called on January
15th and July 15th each year (i.e., in each case, partially in arrears and partially in advance). 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, 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 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 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 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 or BCM for such expenses to the extent that any such expenses
are borne by BCA 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 or BCM on its behalf, including but not limited to:
• costs and expenses attributable to acquiring, holding and disposing of the Funds’ investments
(including interest on money borrowed by the Funds or BCA or BCM on its behalf, registration
expenses and brokerage, finders, custodial and other fees;
• third party accounting, auditing, consulting, escrow, custodial, reasonable legal and other fees
and expenses (including expenses associated with the preparation of the Funds’ financial
statements, tax returns and schedule K-1s);
• The Funds’ allocable share of expenses of its Limited Partner Advisory Board incurred in
accordance with returning any distribution that was wrongfully made to it;
• obligations and liabilities of the Funds (including the cost of any insurance, obligations to
indemnify or advance expenses to any indemnitee with respect to a loss pursuant to the
partnership agreement, and any reasonable litigation and indemnification costs and expenses,
judgments and settlements;
• any taxes, fees and other governmental charges levied against the Funds,
• reasonable accounting, auditing, consulting, legal and other third party fees and expenses
(including financing commitment fees, real estate title and appraisal fees, application and
licensing fees and printing costs) incurred by or on its behalf, BCA or BCM relating to
investment and disposition opportunities for the Funds, whether or not consummated;
• travel, lodging, meals and other similar out-of-pocket expenses of BCA, BCM and their
respective affiliates incurred in connection with an investment or disposition opportunity for the
Funds that is not consummated;
• expenses of periodic meetings of its limited partners; 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 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 Expenses(as defined
in the partnership agreement), and (C) expenses that are included in any Investment Contribution
or Bridge Financing Contribution (as such terms are defined in the partnership agreement).
Neither BCA nor any of its personnel receive compensation for the purchase or sale of securities or
investment products by the Funds. BCA provides investment advice to the Funds but neither BCA nor its
personnel cause transactions in which the Funds engage to occur. The Funds generally purchase
securities through private placement transactions, without the assistance of a broker or dealer and without
the payment of a brokerage commission or other transaction costs. Item 12 contains further information
on the factors that are considered in the event that a broker-dealer is used for client transactions.