Item 5: Fees and Compensation
DESCRIPTION OF COMPENSATION AND BASIC FEE SCHEDULE
In consideration of our advisory services, we generally receive management fees and performance allocations with
respect to the Blue Eagle Funds. While our fees are described in detail in the Blue Eagle Funds’ offering and governing
documents, a brief summary of our advisory fees is set forth below.
We have entered into arrangements with certain investors that grant different terms (including lower fees) to such
investors than the terms generally applicable to other limited partners in the Blue Eagle Funds. These and future
arrangements, including Side Letters, do and may provide for a lower management fee rate that may be coupled with
a higher performance allocation rate and/or more restrictive liquidity provisions, or other separately negotiated terms
and conditions.
Each investor in the Blue Eagle Funds generally must be, among other things, an (i) “accredited investor,” as such
term is defined in Rule 501(a) Securities Act, and (ii) a “qualified purchaser,” as such term is defined in Section
2(a)(51)(A) of the Company Act.
Management Fee and Performance Allocation
For its services to the Onshore Fund and Offshore Fund (the “Feeder Funds”), the Adviser is entitled to a management
fee (the “Management Fee”) at an annual rate of 1.5% of each investor’s capital account (subject to step down
provisions for Founders’ Interests). The Management Fee is calculated and paid each calendar quarter in advance
based on a percentage of the net asset value of each account or share as defined in the respective Feeder Funds’
offering documents.
An affiliate of the Adviser is entitled to a performance-based profit allocation (the “Performance Allocation”) at the
end of each calendar year (or at other times as detailed in the Feeder Funds’ offering documents). The Performance
Allocation for the Onshore Fund is equal to, generally, 15% - 20% (with new interests generally at 20%) of the amount
by which the Onshore Fund’s net profits for the calendar year exceed the balance of the carryforward account as
defined in the Onshore Fund’s offering documents. The Performance Allocation for the Offshore Fund is equal to,
generally, 15% - 20% (with new interests generally at 20%) of the net capital appreciation (as defined in the governing
documents of the Offshore Fund) of each share that exceeds the higher of either (i) the value as of the commencement
of the calendar year or (ii) the issue price of such share.
The Adviser has and may waive or modify the performance allocation and the management fee for members,
principals, employees or affiliates of the Adviser.
BWCP does not have a fee schedule for sub-advisory or other Client accounts. The Management Fee and performance
fee for any Sub-Advisory Client is separately negotiated.
OTHER FEES AND EXPENSES
Generally, the Blue Eagle Funds bear all expenses of the organization of the Blue Eagle Funds and the offering of
interests (including legal and accounting fees, printing costs, travel, “blue sky” and other regulatory filing fees and
expenses and out-of-pocket expenses, but not including placement fees) (collectively, “Organizational Expenses”).
Placement fees not paid by the Adviser or General Partner may be paid by the applicable Fund; provided, however,
that to the extent paid by the Fund, the Management Fee otherwise payable by the Fund will be reduced by an identical
amount. In general, the Fund’s financial statements are prepared in accordance with accounting principles generally
accepted in the United States (“GAAP”). However, the Funds intend to amortize Organizational Expenses over a
period of 60 calendar months from the date the Fund commences operations because it believes such treatment is more
equitable than expensing the entire amount of Organizational Expenses in the Fund’s first year of operation, as is
required by GAAP. The General Partner or Adviser, as applicable, however, have limited the amount of Organizational
Expenses that the Fund amortizes so that the audit opinion issued with respect to the Fund’s financial statements will
not be qualified.
The Blue Eagle Funds bear all (i) costs and expenses related to its investment program, including expenses related to
proxies, underwriting and private placements, data feed hardware and software, research, trade publications, brokerage
commissions, bank service fees, interest on debit balances or borrowings, custody fees, fees assessed by prime brokers,
and other third-party service fees, and any taxes (including, but not limited to, withholding and transfer taxes) imposed
on the Fund, expenses relating to any short sales, clearing and settlement charges, and travel expenses; (ii) all out-of-
pocket costs of the administration of the Fund, including, without limitation, fees and expenses of any administrator,
accounting, audit, tax and tax preparation expenses, legal expenses, costs of any litigation or investigation involving
the Fund’s activities, and costs associated with reporting and providing information to existing and prospective limited
partners, the costs of holding any meeting of the partners, and any costs of procuring and maintaining insurance for
the benefit of the Fund, the General Partner, the Adviser or any other indemnified persons (as defined); (iii) any
governmental, regulator, licensing, filing or registration fees and expenses (including any fees and expenses associated
with any regulatory, operations or compliance consultant) incurred by the Fund, the General Partner or the Adviser in
compliance with the rules of any self-regulatory organization or any federal, state or local or other applicable laws;
(iv) any withholding, transfer or other taxes imposed on, or payable by, the Fund or any of its investors; (v) all costs,
fees and expenses associated with the ongoing offering of the interests; provided, however, that the Management Fee
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