Item 5 – Fees and Compensation
The standard fee structure for each of the Funds consists of a management fee and a
performance-based allocation.
LOP Management Fee
LOP charges a standard quarterly management fee equal to ¼ of 1.5% of the value of each limited
partner’s capital account balance. These fees are charged in advance. Redemptions are only
allowed on the first December 31 falling at least three years after a limited partner’s investment and
at the end of each three year period thereafter (each, a Lock-Up Date), so no proration is
applicable. We also charge a prorated management fee on contributions made following the
beginning of a quarter.
LOP Performance-Based Fee
As of each Lock-Up Date we charge a performance-based fee equal to 20% of LOP’s net profits
attributable to a limited partner since the Prior Lock-Up Date (or, on the first Lock-Up Date,
inception). Net profits include unrealized appreciation or depreciation.
General
For the Fund, the management fee and the performance fee may be waived, reduced or rebated
for any investor, including, without limitation, for investments we or our affiliates make and/or for
investments made by our employees and their family members.
The Fund remits to us any performance fee annually without a bill being sent to the investors in the
Fund. Performance-based fees are also computed and charged upon redemptions occurring prior
to a yearend.
The Fund also bears all costs and expenses directly related to the offering of interests in the Fund
(including legal and accounting fees, printing costs, travel, “blue sky” filing fees and expenses and
out of pocket costs) and the Fund’s respective investment programs including the compensation of
managers of investment vehicles in which the Fund invests, other costs associated with specific
investment transactions affected or positions held for the Fund’s accounts including all fees and
costs relating to the purchase of and the sale of interests in such investment vehicles and
securities, expenses related to proxies, underwriting and private placements, brokerage
commissions, interest on debit balances or borrowings, custody fees and any withholding or
transfer taxes imposed on the Fund. The Fund also bears all out-of-pocket costs of the
administration of the Fund, including accounting, audit and legal expenses, research and research-
related expenses, and costs of any litigation or investigation involving the Fund’s activities.
However, Lyrical may, in its sole discretion, choose to absorb any such expenses incurred on
behalf of the Fund.
Lyrical's investment management agreement with the Fund provides that the Fund will indemnify,
and not hold liable, Lyrical and its affiliates for certain expenses, losses and claims that may arise
in connection with the performance of its duties (including management of the Fund’s investments
and execution of investment trades), provided that such persons' conduct has not breached the
applicable standards of conduct (i.e., the relevant actions were, in general, taken in good faith and
did not involve willful misconduct, gross negligence, a violation of federal or state securities laws or
criminal wrongdoing). In the opinion of the SEC, an agreement to waive or indemnify against
certain liabilities under the federal securities laws may be against public policy and therefore may
be unenforceable.
Please see Item 12 - Brokerage Practices, below.