Item 5 − Fees and Compensation:
Management Fees
Generally, the Funds pay the Adviser an annual management fee (the “Management
Fee”) in accordance with each such Fund’s Partnership Agreement and Management Agreement,
as negotiated collectively with the investors of each such Fund. The Management Fee is payable
to the Adviser in semi-annual installments in advance, and will be calculated with respect to (and
may be drawn down from) each limited partner in accordance with the respective Fund’s
Partnership Agreement. The Adviser also receives compensation from certain portfolio
companies in the form of directors’ fees, transaction, monitoring, or breakup fees and other
similar advisory fees (collectively, “Fee Income”). Such Fee Income serves to reduce
Management Fees paid by the Funds as noted in the Management Fee calculation below.
However, Management Fees are subject to modification, waiver or reduction in certain limited
circumstances.
Since the Management Fee cannot be reduced below zero, each Fund’s Partnership
Agreement provides for the creation of a carryforward credit, which offsets future Management
Fee payments. The aggregate credit carried forward for such fee income may exceed the amount
of the Management Fee available to be reduced.
The Adviser generally receives ongoing monitoring fees from portfolio companies
quarterly in advance. If a portfolio company investment is realized during a period, the Adviser
is not obligated to refund the portfolio company for the period of time for which it will not
provide services.
DCP 2014
Through November 18, 2017, the Adviser was entitled to receive annual Management
Fees equal to 1.25% of the Capital Commitments of the limited partners and thereafter, until
November 17, 2019, Management Fees equal to 1.25% of the capital contributions to the Funds
which remain invested in portfolio investments, provided that if the Adviser reasonably and in
good faith determines that the amount that would otherwise be calculated is insufficient to pay
the operating expenses of the Adviser, the Adviser may propose an annual operating budget and
an increase in the Management Fee paid by each limited partner in the aggregate amount set
forth in such budget, which increase would require the approval of certain significant investors in
DCP 2014.
Each semi-annual installment of the Management Fee is calculated with respect to each
limited partner and is generally reduced by an amount equal to such limited partner’s pro rata
share of 100% of Fee Income received from portfolio investment companies by the Adviser, its
employees, or affiliates. All Management Fees mentioned above are billed by DCP 2014 and
paid to the Adviser. All Fee Income offsets to the Management Fee will be allocated between
DCP 2014 and any related co-investing entities on the basis of capital committed by each Fund
to the relevant investment.
The Management Agreement of DCP 2014 generally provides that upon termination of
the Management Agreement, the Adviser shall repay to the Fund or to a replacement manager, as
directed by the Fund’s general partner, the unearned portion (computed on the basis of the
number of days elapsed), if any, of any Management Fees previously paid to the Adviser.
DCP Vista
Through the term of DCP Vista, the Adviser receives annual Management Fees equal to
1.0% of the Capital Contributions of the limited partners made by limited partners that were used
to fund the cost of, and remain invested in, portfolio investments as of the payment date.
Each semi-annual installment of the Management Fee is calculated with respect to each
limited partner and is generally reduced by an amount equal to such such limited partner’s pro
rata share of 100% of Fee Income received from portfolio investment companies by the Adviser,
its employees, or affiliates. All Management Fees mentioned above are billed by DCP Vista and
paid to the Adviser. All Fee Income offsets to the Management Fee will be allocated between
DCP Vista and any related co-investing entities on the basis of capital committed by each Fund
to the relevant investment.
The Management Agreement of the DCP Vista provides that upon termination of the
Management Agreement, the Adviser shall repay to the Fund or to a replacement manager, as
directed by the Fund’s general partner, the unearned portion (computed on the basis of the
number of days elapsed), if any, of any Management Fees previously paid to the Adviser.
Item 6 below discusses the distribution of carried interest, an additional performance-
based compensation paid to certain related persons of the Adviser.
Healthmap
Through the Term of Healthmap, the adviser will not receive annual Management fees
from limited partners. However, should the Adviser receive Fee Income, it will retain such
income to the extent that it does not exceed 1% of the Capital Contributions of the limited
partners that were used to fund the cost of, and remain invested in assets of the underlying Fund.
Allocation of Fees and Expenses
The Adviser pays all normal operating expenses incidental to the provision of day-to-day
administrative services to the Funds, including its own overhead. The Funds pay all costs,
expenses and liabilities in connection with their respective operations, including (i) the
Management Fee, (ii) costs and expenses relating to the purchase, holding and sale of portfolio
investments (to the extent such expenses are not reimbursed) which may include the costs of
engaging consultants on behalf of portfolio investments as well as out-of-pocket costs incurred in
pursuing and managing portfolio investments, such as travel, (iii) expenses incurred in
connection with transactions not consummated, (iv) premiums for insurance covering potential
liabilities of the Funds, (v) taxes, (vi) fees and expense of accountants, counsel and consultants,
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