ITEM 5. FEES AND COMPENSATION
A. Collecting Our Advisory Fees
The Registrant, the General Partner, the MCSF General Partner and the Imperium General Partner
receive compensation for providing advisory services to the Funds. The Registrant receives an asset-
based fee and the general partners or MCSFF II receives a performance-based fee or allocation, if
applicable, as described in each of the Funds’ offering documents.
MCSFF II Funds
From the First Closing Date (see table below) until two years following the Final Closing Date (the
“Investment Period”), the fee schedule for an investment in the MCSFF II Funds includes an annual
management fee between 1.75% and 2.25% of a limited partner’s capital commitment (calculated
separately for each limited partner), payable quarterly in advance. Different investors in the Funds pay
different management fees based on amount and timing of their investment in the Funds as set forth
below:
Type of Limited Partner Management Carried Anticipated
in the Fund or the Fee Rate Interest Minimum Final
Offshore Fund (p/a) Percentage Commitment Closing Date
Limited Partner 1.75% 15% $1,000,000 June 15,
Participating in First 2017
Closing:
Limited Partner 1.75% 20% $5,000,000 October 31,
Participating in 2017
Subsequent Closing:
Limited Partner 2.25% 20% $1,000,000 March 31,
Participating in 2018
Subsequent Closing:
Following the Investment Period, the management fee will be calculated based on the of the portion of the
net asset value (computed as of the first day of each calendar quarter) attributable to a limited partner’s
interest in the MCSFF II Funds.
The management fee will commence with respect to each limited partner’s capital commitment as of the
date of the First Closing Date (as set forth in the schedule above), regardless of when such limited
partner is actually admitted to a MCSFF II Fund. Therefore, limited partners participating in a Subsequent
Closing will be assessed management fees retroactive to the First Closing Date, together with interest, at
a rate per annum equal to the management fee rate applicable to that limited partner. All amounts so
assessed will be paid to MCSFF II as the investment manager.
Installments (including the first installment) of the Management Fee payable for any period other than a
full quarterly period shall be prorated based on the number of days in the period.
In the General Partner’s discretion, the management fee may be paid either out of amounts otherwise
available for distribution to the limited partners or by drawdowns of the limited partners’ unfunded capital
commitments. Any amount drawn down from the unfunded capital commitments to pay the management
fee may, to the extent the limited partners receive subsequent distributions, be restored to the unfunded
capital commitments and subject to future drawdowns.
As noted in the schedule above, a carried interest allocation of up to 20% may also be payable to the
General Partner. The carried interest allocation is based upon a percentage of the net profits of the
Funds in excess of the return of the capital commitments of the limited partners and in excess of the
Preferred Return (as defined in the MCSFF II Funds’ offering documents). Notwithstanding the above,
depending on the net proceeds from disposition of portfolio investments, as well as distributions of
Portfolio Company securities in kind, together with any dividends, interest or other similar income (other
than certain short-term investment income) received with respect to a portfolio investment, the carried
interest percentage may be higher or lower than the stated range. The carried interest may also be
subject to a “clawback” in certain circumstances as more fully described in the Funds’ offering documents
Imperium Funds and MCSF Funds
MCSFF II receives an up to 2% management fee and MCSFF II, the MCSF General Partner or the
Imperium General Partner, as applicable, receives an up to 20% performance-based fee or allocation for
advisory services with respect to the MCSF Funds and the Imperium Funds, as more fully described in
the offering memorandum of the relevant Fund.
General
Except for the management fee and carried interest/performance-based fee or allocation, none of MCSFF
II, the General Partner or their respective affiliates will receive any monitoring fees, advisory fees,
directors’ fees, transaction fees or other similar fees or incentive consideration from the Funds or any
Portfolio Companies. In the event that MCSFF II, the General Partner, or their respective affiliates
receives any such fees or consideration from the Funds or a Portfolio Company, such items will be
rebated to the relevant Fund.
The fees and allocations described above do not include brokerage commissions, transaction fees,
service provider fees, and other related costs and expenses which will also be incurred by the Funds.
See below under the heading “Other Non-Advisory Fees and Expenses You May Incur” for a more
complete description of these fees and expenses.
B. Other Non-Advisory Fees and Expenses You May Incur
To the extent not prohibited by the Management Services Agreement, each of the Funds will incur costs
and expenses, other than our management fee and carried interest percentage/performance-based fee or
allocation, which are generally borne pro rata by Fund investors, unless otherwise provided under the
Funds’ offering documents.
MCSFF II Funds
The MCSFF II Funds will bear all legal and other organizational expenses, including the out-of-pocket
expenses of MCSFF II and the General Partner, incurred regarding the formation of the MCSFF II Funds
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