Item 5: Fees and Compensation
Typically, each client pays Thayer Street fixed management fees and performance-based
compensation.
Generally, Fund I and Fund II (collectively, the “Funds”) will pay Thayer Street an annual
management fee equal to 2.0% of aggregate limited partner capital commitments through the end of
each Fund’s respective investment period. Thereafter, the annual management fee will be calculated
using the management fee for the immediately preceding year reduced by 10%, subject to a minimum
of 1.0% of aggregate limited partner capital commitments, and will be calculated as a percentage of
gross capital contributions of each limited partner. In certain cases, the management fee will be
partially reduced by a portion of certain fees received by Thayer Street or any of its affiliates, as
provided in greater detail in the governing documents of the relevant fund. The Funds also each pay
to an affiliate of Thayer Street a carried interest equal to a percentage of net realized gains generated,
as described in greater detail in the governing documents of each Fund. A portion of the capital
commitment of the general partner to Fund II may be funded from a reduction in the Management
Fee of Fund II (which will be reduced at a fixed quarterly rate over a 5-year period from the final
closing date).
Other single investment vehicles managed by Thayer Street are subject to different management fees
and carried interest arrangements, generally ranging from 0% to 2.5% per annum of either capital
commitments or net assets plus, in some cases, a one-time fee of 1.0% to 2.0% of capital
commitments, and from 0% to 30% of net realized gains, as set forth in the governing documents for
each vehicle.
Management fees are generally payable by each client to Thayer Street. Thayer Street reserves the
right to negotiate, waive, reduce, rebate or calculate differently its fee structure with respect to any
fund investor. Thayer Street, or an affiliate such as an investment vehicle’s general partner or
managing member, may draw down capital commitments from the -investors in such vehicle, or may
use amounts that would otherwise be available for distribution to such vehicle’s investor(s), in order
to meet the obligation to pay the management fee. However, with respect to single investment
vehicles (not including the Funds), Thayer Street may deduct fees directly from the client’s account
or bill clients directly. The carried interest is usually payable on a “waterfall” basis out of
distributions otherwise payable to the investors in each vehicle. All accrued but unpaid management
fees and carried interest as of the date of termination of the advisory relationship between Thayer
Street and each client will ordinarily be payable to Thayer Street upon such termination, except as
otherwise provided in the governing documents for the relevant vehicle.
Each Thayer Street vehicle is responsible for all costs and expenses associated with its investment
activities and operations, including, without limitation, all costs and expenses incurred in sourcing,
investigating, developing, negotiating, structuring, acquiring, trading, settling, protecting,
monitoring, holding, valuing and disposing portfolio investments (whether or not consummated)
incurred by a Thayer Street vehicle, Thayer Street or their affiliates or their respective partners,
members, managers, officers, employees oand agents; legal, tax, accounting, marketing, due
diligence, and reasonable travel fees, costs, and expenses (including first or business class
commercial travel and, in the event Thayer Street determines in its reasonable discretion that
commercial air travel would be impracticable, non-commercial air travel up to the cost of first or
business class commercial travel only) as well as any travel-related costs, including, but not limited
to, accommodations and meals incurred in connection with the specific vehicle’s activities; any
merger fees payable to third parties and the cost of forming and operating any alternative investment
vehicles; broken deal expenses; unreimbursed expenses paid on behalf of existing or potential
portfolio companies;operating expenses of existing or potential portfolio companies; meetings and
business related entertainment with personnel of portfolio companies, prospective portfolio
companies, intermediaries and strategic partners or prospective strategic partners; brokerage fees and
commissions and prime brokerage fees; custodial expenses, agent bank and other bank service fees
and other investment costs; payments to legal counsel, tax advisors, auditors, accountants,
administrators, custodians, depositories (including any depositary appointed pursuant to the AIFM
Directive or any law, rule or regulation relating to the implementation thereof in any relevant
jurisdiction), a Swiss representative and paying agent (pursuant to the Swiss Collective Investment
Schemes Act (as amended) including any law, rule or regulation related to the implementation
thereof), consultants, investment bankers, transactional advisers, and other outside advisors;
expenses of any advisory committee; costs of errors and omissions, directors and officers liability
and other insurance; market data costs; financing fees, costs related to any guarantees; research-
related fees, costs, and expenses, including, without limitation, news and quotation equipment,
software and services used in connection with accounting, investor reporting, relationship
management and portfolio management; other expenses related to the purchase, monitoring, sale,
settlement, custody or transmittal of investments or other assets; costs of any investigation, litigation
or threatened litigation relating to the business or activities of Thayer Street or any Thayer Street
vehicle; indemnification obligations; interest and other expenses related to any financing; taxes, fees
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