ITEM 5. FEES AND COMPENSATION
Management Fees
EBP offers advisory services for fixed fees that are set in and governed by the Agreements (as
defined below), which were approximately 1% of Eight Bar Financial Partners I’s total assets at
the time of purchase, for the first four years, as well as for fees based on performance as described
in Item 6. In 2020, the fee was a fixed $625,000, with zero management fees agreed for 2021 or
2022. The fees are governed by the Agreements (as defined below) and are not negotiable. The
management fees that our clients pay us are provided for in their limited partnership agreements,
subscription agreements, assignment and assumption agreements and/or the investment
management agreements (“Agreements”) that the funds execute with us. The management fee is
typically paid quarterly in advance. The specific management fees payable by a fund are
negotiated at the time the fund is formed and fees for future funds may be higher or lower than
those paid in conjunction with Eight Bar Financial Partners I. We deduct management fees from
the account of each fund.
To the extent provided in the Agreements, EBP pays out of its management fees certain operating
expenses, including, but not limited to, salaries and expenses of its employees, expenses for
bookkeeping and administrative services, office space, and equipment and supplies.
Other Fees and Expenses
We may also receive monitoring, directors, consulting and other transaction fees in connection
with the activities of our funds (“Other Fees”). In addition, we may be paid additional advisory
fees and be reimbursed by our funds’ portfolio companies for expenses we incur in connection
with our performance of the services that give rise to Other Fees. Both monitoring fees and
additional advisory fees will be agreed to with the applicable portfolio companies at the closing
of the funds’ investments in such portfolio companies. In general, the aggregate management fee
that a fund pays us would be reduced by all or a portion of any Other Fees received by us in
connection with the activities of the fund. We do not anticipate that we will receive Other Fees
or additional advisory fees and reimbursements from Eight Bar Financial Partners I, but may
receive them from future funds.
Additional fees and expenses for which a fund may be responsible are described in the limited
partnership agreement of such fund. Generally, each fund pays all costs and expenses related to
its operations, including but not limited to organization expenses, all unreimbursed expenses
incurred in connection with identification, investigation and structuring of any proposed
or actual investments (including, without limitation, costs of services provided by persons
who are not employees of the general partner or manager and reasonable compensation for
services provided by attorneys, accountants and tax professionals); extraordinary expenses
such as litigation; all
expenses for indemnity, contribution or other claims or liabilities payable by such fund; expenses
related to unconsummated transactions; expenses of dissolution and liquidation of such fund; and
any taxes, fees or other governmental charges levied against such fund and any expenses incurred
in connection with any tax audit, investigation, settlement or review of such fund.