Item 5: Fees and Compensation
Fee Schedules
Pursuant to the partnership agreement of CCCP, CCCP pays CCCM, quarterly in advance, an annual
management fee of 2% of capital commitments during a commitment period of up to five (5) years
(dropping to 1.5% of contributed capital thereafter), and allocates a carried interest to Cotton Creek
SLP, L.P. (“CCSLP”), an affiliate of CCCM, of up to 20% on profits to investors after a return of
capital and a preferred return of eight percent (8%), subject to certain claw backs and other
adjustments. Management fees may be paid by calling capital from investors for such purpose or
by reducing distributions that would otherwise be made to investors.
Pursuant to the partnership agreement of CCTSBS, CCTSBS pays to CCCM, quarterly in advance,
an annual management fee equal to one-half of one percent (2% annually) of the aggregate capital
commitment of each limited partner. After the commitment period, the management fee may be
reduced in the discretion of CCCM. In addition, and subject to the terms and limitations set forth in
the partnership agreement, CCTSBS allocates to Cotton Creek Terrace SLP, L.P. (“CCTSLP”), an
affiliate of the Firm, a performance allocation of up to 20% on profits after a return of capital to
certain investors, subject to a claw back and other adjustments. Management fees may be paid by
calling capital from investors for such purpose or by reducing distributions that would otherwise be
made to investors. The CCTSBS partnership agreement allows for receipt of certain shared
management oversight fees from the CCTSBS portfolio company.
With respect to the CCC Funds, fees generally are not negotiable. Nevertheless, the CCC Funds and
the Firm have in the past entered into side letter agreements or other similar arrangements with
certain investors that alter, change or modify certain terms of the partnership agreement(s) with
respect to such investors (including a reduction or waiver of fees).
Other Fees and Expenses
Subject to the terms and conditions set forth in the applicable governing documents, each CCC Fund
generally is responsible and reimburses the applicable general partner, the Firm and their respective
affiliates for all expenses (other than general partner expenses, such as costs and expenses of
compensation of the general partner’s officers and employees and office rent) that are attributable
to the activities of such CCC Fund, including, but not limited to: (i) expenses, costs and fees incurred
in connection with the formation and organization of the CCC Fund, the general partner or any
affiliated entities (subject to the cap set forth in the governing documents); (ii) management fees;
(iii) subject to certain limitations set forth in the governing documents, (A) all expenses incurred in
connection with origination, evaluation, investigation, structuring, acquisition or disposition of any
portfolio investments, including private placement fees, sales commissions, appraisals fees, taxes,
brokerage fees, underwriting commissions and discounts, legal, accounting, investment banking,
consulting, information services and professional fees; (B) expenses incurred in connection with
the carrying or management of investments, including custodial, trustee, record keeping and other
administration fees; (C) expenses incurred in connection with communications with investors; (D)
attorneys’ and accountants’ fees and expenses; (E) taxes and other governmental charges levied
against the CCC Fund; (F) insurance, regulatory or litigation expenses (and damages), including
regulatory expenses of the CCC Fund’s general partner and litigation expenses and damages of
persons indemnified under governing documents; (G) expenses incurred in connection with the
winding up or liquidation of the CCC Fund; (H) expenses relating to defaults by investors in the
payment of capital contributions; (I) out-of-pocket expenses for transactions that are not
consummated (“dead deal costs”); (J) expenses incurred in connection with any restructuring or
amendments to the constituent documents of the CCC Fund, its general partner and related entities;
(K) expenses incurred in connection with the formation of alternative investment entities to the
extent permitted under the governing documents; and (L) expenses incurred in connection with
distributions to the investors; (iv) expenses incurred by the CCC Fund in connection with the
Compensation and Conflicts Committee meetings and all reasonable travel and other out of pocket
expenses incurred by members of such committees in connection with the performance of their
duties as members; (v) expenses incurred in connection with annual partners meetings or other
meetings of the partners; (vi) all fees and expenses incurred in connection with the registration,
qualification or exemption of the CCC Fund under any applicable federal, state, or local law and all
other fees and expenses imposed by any governmental authority with respect to the CCC Fund’s
operations or assets; (vii) all fees and expenses relating to the preparation of the quarterly unaudited
and annual audited financial statements of the CCC Fund, the local, state and federal income,
franchise and other tax returns of the CCC Fund, other regulatory reports and filings of the CCC
Fund, and all other documents, opinions, appraisals and reports required to be delivered to the
partners pursuant to the provisions of the governing documents; (viii) all fees and expenses incurred
in connection with any litigation, mediation, arbitration or other legal or tax proceeding involving
the CCC Fund or any of its investments (including the cost of any investigation and preparation)
and the amount of any judgment or settlement paid in connection therewith (subject to the
limitations set forth in the governing documents); and (ix) all fees and expenses incurred in
connection with the collection of amounts due to the CCC Fund. Expenses incurred and reimbursed
...