Item 5: Fees and Compensation
Legacy Ridge Capital Partners Equity Fund 1, L.P.
Legacy Ridge does not charge a management fee in connection with services provided to the Fund. At the
end of each fiscal year, the Legacy Ridge is allocated by credit to its capital account and each limited
partner is allocated by debit to its capital account an amount equal to twenty-five percent (25%) of such
limited partner’s pro rata share of the net capital appreciation for each fiscal year (the “Incentive
Allocation”), subject to a four percent (4%) hurdle rate. Legacy Ridge, in its sole and absolute discretion,
may reduce or waive the Incentive Allocation allocable from a limited partner.
In addition to the Incentive Allocation, the Fund incurs operating expenses which include:
• Investment-Related Expenses: any and all costs and expenses incurred in connection with the
evaluation, acquisition, monitoring or disposition of investments, including, without limitation,
brokerage commissions, research fees, interest on margin accounts and other indebtedness,
borrowing charges on Securities sold short, interest and commitment fees, custodial fees, bank
service fees, transfer taxes and premiums, and legal, accounting, consulting, information services,
and professional fees (which reimbursement may include affiliates of the General Partner to the
extent that fees, costs and expenses payable to such Affiliates do not exceed the amount
customarily charged by third parties for services similar to those actually provided) related to the
discovery, investigation, development, making, management and disposition of investments
(whether or not consummated);
• Reporting-Related Expenses: any and all expenses incurred in connection with the Fund’s
financial statements, reports, tax returns and Schedule K-1s (or similar schedules);
• Legal and Accounting-Related Expenses: any and all fees and disbursements of attorneys and
accountants relating to Fund matters, including without limitation, fees and disbursements
associated with updating the Fund’s Confidential Private Placement Memorandum and
subscription documents;
• Taxes and Other Governmental Charges: any and all taxes and other governmental charges that
may be incurred or payable by the Fund;
• Insurance-Related Expenses: any and all insurance premiums or expenses incurred by the Fund
in connection with the activities of the Fund, including errors, omissions, fidelity, general partner
liability, directors’ and officers’ liability and similar coverage for any person acting on behalf of
the Fund or the General Partner;
• Regulatory and Litigation Expenses: any and all expenses (including legal fees and expenses)
incurred to comply with any law or regulation related to the activities of the Fund or incurred in
connection with any litigation or governmental inquiry, investigation or proceeding involving the
Fund, including the amount of any judgments, settlements or fines paid in connection therewith,
except, however, to the extent such expenses or amounts have been determined to be excluded
from the indemnification provided by the Fund;
• Termination Expenses: any and all costs and expenses incurred in connection with the
dissolution, winding up, or termination of the Fund;
• Valuation Expenses: any and all costs and expenses incurred in connection with computing the
value of the assets of the Fund;
• Administration Expenses: any and all costs and expenses incurred and agreed with the
administrator in connection with the accounting, valuation and other administration services
provided by the administrator;
• Meeting Expenses: any and all costs and expenses incurred in connection with any meeting of
the partners;
• Indemnification Expenses: any and all expenses related to the Fund’s indemnification obligations;
and
• Proxy-related expenses: any and all expenses related to the Fund’s voting of proxies.
Separate Accounts
Fees are negotiable. Legacy Ridge generally charges an annual management fee of 1.2% of the value of
the portfolio, payable quarterly (0.3% per quarter) on the [first business day of the new calendar quarter],
in arrears, and calculated based on the value of the portfolio as of the last business day of the most
recently completed quarter. This management fee is prorated if a client makes any contributions or
withdrawals during the most recently completed quarter.
Unless specifically requested by the client, fees will be deducted from your managed account through a
qualified custodian. As part of this process, you understand and acknowledge the following:
• Legacy Ridge requires direct deduction of the management fee.
• Legacy Ridge will send a copy of each applicable invoice to the Custodian at the
same time legacy Ridge sends a copy to the Client; and
• If there is insufficient cash in a client’s portfolio, Legacy Ridge may, at its election,
identify with you certain securities for sale and direct the Custodian to use the
proceeds from such sales for the purpose of paying Legacy Ridge;
• You will provide written authorization permitting us to be directly paid by these
terms as part of the account-opening process.
• The Custodian will send Advisory Clients a statement at least quarterly, deducting
the Management Fee on Legacy Ridge’s behalf.
Unless the client directs otherwise or an individual client’s circumstances require, Legacy Ridge may or
may not recommend a particular company to serve as the broker-dealer/custodian for client investment
...