1001-00002 · Ardent Capital Management LLC · LP Consent & Notification

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MEMORANDUM

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT

To: Marcus Aldridge, Co-Founder & Managing Partner, Ardent Capital Partners III LP Priya Narayanan, Co-Founder & Managing Partner, Ardent Capital Partners III LP

From: Owen Fischer, Lead Associate, Calderwood & Harkness LLP Stephen Adler, Working Associate, Calderwood & Harkness LLP

Date: February 22, 2024

Re: Side-Letter Compliance and Key-Person Analysis — Management Company Restructuring of Ardent Capital Partners III LP

Reviewed by: Nicholas Stern, Responsible Partner, Calderwood & Harkness LLP

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I. Executive Summary

The purpose of this memorandum is to analyze the compliance of the proposed management company restructuring and economics realignment of Ardent Capital Partners III LP (the "Fund") with the fourteen (14) side letters currently in effect between the Fund's general partner and certain of its limited partners, and to assess whether the restructuring triggers a "Key Person Event" under Section 5.2 of the Amended and Restated Agreement of Limited Partnership of the Fund, dated as of July 1, 2020 (as amended from time to time, the "LPA").

Fund Overview. The Fund is a Delaware limited partnership with approximately $2.8 billion in total capital commitments from forty-seven (47) limited partners. As of the date of this memorandum, the Fund has called approximately $1.96 billion (representing approximately 70% of total commitments) and maintains eleven (11) active portfolio companies with aggregate invested capital of approximately $1.88 billion. The Fund's general partner is Ardent Capital GP III LLC, a Delaware limited liability company (the "GP"), and its investment adviser is Ardent Capital Management LLC, a Delaware limited liability company registered with the Securities and Exchange Commission under CRD #298417 (the "ManCo").

Restructuring Overview. The proposed restructuring involves the following principal elements:

(a) the formation of Ardent Capital Holdings LLC ("HoldCo") as a new Delaware limited liability company to serve as the parent holding company for the GP and the ManCo;

(b) the formation of Ardent GP Intermediate LLC ("GP Intermediate") as an intermediate entity between HoldCo and the GP;

(c) the conversion of the GP and the ManCo into wholly owned subsidiaries of HoldCo (with the GP held through GP Intermediate);

(d) the reallocation of carried interest (currently set at 20% of net profits, subject to an 8% preferred return hurdle) and ManCo Profit Share among remaining and next-generation principals; and

(e) the separation of two departing principals—David Kellner (retiring, effective March 31, 2024) and Joanna Trask (voluntary departure, effective April 15, 2024)—and the vesting and crystallization of their respective economic entitlements in accordance with the terms of their separation agreements.

Post-Restructuring Carried Interest Allocation. Following completion of the restructuring, carried interest will be allocated among the HoldCo members as follows:

Summary Conclusions. Based on our review and analysis, we reach the following principal conclusions:

(a) No Key Person Event is triggered. Neither David Kellner nor Joanna Trask is a designated "Key Person" under Section 5.2 of the LPA. Both designated Key Persons—Marcus Aldridge and Priya Narayanan—will remain in their current roles as Co-Founders and Managing Partners, continuing to devote substantially all of their business time to the Fund.

(b) Compliance with all fourteen side letters is achievable, subject to timely notifications and, in four cases, prior written notice and/or affirmative consent from the affected limited partners.

(c) Specific action items have been identified for each category of side-letter provision, as detailed in Sections IV and VII below, and certain of these action items remain pending as of the date of this memorandum.

II. Scope and Methodology

In preparing this memorandum, Calderwood & Harkness LLP undertook the following steps to ensure a comprehensive analysis of the side-letter landscape and the interaction between the proposed restructuring and the Fund's existing contractual obligations.

Document Review. We received and reviewed complete copies of all fourteen (14) side letters currently in effect from Pemberton Hale LLP (Victoria Langford, Partner), the Fund's formation counsel. Each side letter was reviewed in its entirety, including any amendments or supplements thereto, and was catalogued by limited partner name, commitment amount, date of execution, and substantive provision categories.

Cross-Referencing Against LPA. Each side letter was cross-referenced against the operative provisions of the LPA, with particular attention to the following sections:

• Section 5.2 (Key Person);

• Section 8.3 (Transfer of GP Interest);

• Section 9.4 (LPAC Consent); and

• Section 9.7 (Removal of GP).

Categorization of Side-Letter Provisions. For purposes of this analysis, we categorized the substantive provisions contained in the fourteen side letters into the following five categories:

(A) Most Favored Nation ("MFN") provisions;

(B) Expanded Key-Person / "Contributing Person" provisions;

(D) Management Structure Change / Transfer Consent provisions; and

(E) Co-Investment Priority provisions.

This categorization is intended to facilitate a structured analysis of the restructuring's impact on each type of provision. Certain side letters contain provisions falling within multiple categories, and such side letters are addressed under each relevant category heading below.

Review of Restructuring Documents. We also reviewed the proposed restructuring documents, including the following:

• HoldCo LLC Agreement (first draft circulated November 15, 2023; execution version dated February 28, 2024);

• Second Amended and Restated GP LLC Agreement;

• Second Amended and Restated ManCo LLC Agreement;

• LPA Amendment No. 1 (effective February 28, 2024);

• Carried Interest Allocation Agreement among HoldCo members; and

• Separation Agreements for David Kellner and Joanna Trask, including vesting schedules and release provisions.

Our analysis is based on the documents and information provided to us as of the date of this memorandum. We have not independently verified the factual representations made by the Fund, the GP, the ManCo, or their respective counsel, and we have assumed the accuracy and completeness of all documents and information furnished to us.

III. Key-Person Analysis Under LPA Section 5.2

A. Designated Key Persons

Section 5.2 of the LPA designates two individuals as "Key Persons": Marcus Aldridge and Priya Narayanan. These designations reflect the central roles that Aldridge and Narayanan play in the Fund's investment decision-making, portfolio management, and investor relations activities, as well as the representations made to limited partners during the fundraising process.

Under Section 5.2, a "Key Person Event" is triggered if either of the following conditions is satisfied:

(a) both Key Persons cease to devote "substantially all of their business time" (as defined in Section 5.2(b) of the LPA) to the affairs of the Fund and its portfolio companies; or

(b) one Key Person ceases to devote substantially all of his or her business time to the affairs of the Fund and its portfolio companies, and a replacement individual acceptable to the Limited Partner Advisory Committee (the "LPAC") is not designated within one hundred twenty (120) days following the occurrence of such cessation.

Upon the occurrence of a Key Person Event, the Fund's investment period is automatically suspended, and the GP is prohibited from making new investments (other than follow-on investments in existing portfolio companies not exceeding certain thresholds) until the earlier of (i) LPAC approval of a replacement Key Person or (ii) the affirmative vote of limited partners holding at least 66⅔% of the aggregate capital commitments to resume the investment period.

Application to the Restructuring. It is critical to note that neither David Kellner nor Joanna Trask is a designated Key Person under Section 5.2 of the LPA. Kellner and Trask serve as principals of the Fund and have played meaningful roles in deal sourcing, portfolio management, and certain investor-facing activities. However, the LPA's Key Person provision is expressly limited to the two named individuals—Aldridge and Narayanan—and does not extend to other members of the investment team or the GP's principals by its terms.

Both Aldridge and Narayanan will remain as Co-Founders and Managing Partners of the Fund following the completion of the restructuring. Their titles, responsibilities, day-to-day involvement in the Fund's investment and management activities, and commitment to devoting substantially all of their business time to the Fund will be unchanged. Neither individual is departing the platform or reducing his or her time commitment to the Fund in any respect.

Conclusion: No Key Person Event is triggered under LPA Section 5.2 by the departures of David Kellner or Joanna Trask, or by any other element of the proposed restructuring.

B. Impact of Restructuring on Key Person Status

Beyond the threshold question of whether the restructuring triggers a Key Person Event, we have considered whether the restructuring could be argued to affect the status of the designated Key Persons in any way that might give rise to concerns under Section 5.2 or related side-letter provisions.

The restructuring does not alter the identity of the Key Persons. While Aldridge and Narayanan will hold their economic interests in the GP and ManCo through HoldCo (rather than directly, as is currently the case), this change in the organizational holding structure does not affect their roles, titles, or time commitments to the Fund. Section 5.2 focuses on whether the designated Key Persons "devote substantially all of their business time" to the Fund, not on the manner in which their economic interests in the GP or ManCo are held. Accordingly, the interposition of HoldCo as a holding vehicle does not implicate the Key Person provision.

LPA Amendment No. 1, which is expected to become effective on February 28, 2024, makes conforming changes to certain defined terms in Section 5.2, including updates to references to the GP's organizational structure and the identity of entities through which the Key Persons hold their interests. Importantly, LPA Amendment No. 1 does not change the identity of the Key Persons, does not alter the definition of "substantially all of their business time," and does not modify the thresholds or consequences of a Key Person Event.

The LPAC consent obtained on February 14, 2024, expressly covers the restructuring in its entirety, including the formation of HoldCo and GP Intermediate, the amendments to the GP and ManCo LLC agreements, LPA Amendment No. 1, the carry reallocation, and the principal departures. The LPAC consent further acknowledges that the restructuring does not constitute a Key Person Event and that any conforming amendments to Section 5.2 are ministerial in nature.

IV. Side-Letter Analysis by Category

A. Most Favored Nation (MFN) Provisions — 11 of 14 Side Letters

Eleven (11) of the fourteen (14) side letters contain standard Most Favored Nation provisions. These MFN clauses generally entitle the relevant limited partner to the benefit of any more favorable economic or governance term granted by the GP to any other limited partner in connection with such other limited partner's investment in the Fund. The MFN provisions are subject to customary carve-outs, including exclusions for:

• terms granted to limited partners whose capital commitments exceed a specified threshold (typically $200 million or $250 million);

• terms required by applicable law, regulation, or the regulatory status of the requesting limited partner (e.g., ERISA-related provisions, Volcker Rule provisions, or provisions required by state public records laws);

• tax-related provisions specific to the requesting limited partner's tax status or jurisdiction; and

• co-investment allocations, which are generally subject to the GP's discretion under the Co-Investment Allocation Policy.

Impact of the Restructuring on MFN Provisions. The restructuring does not create any new limited partner-specific economic or governance terms. Rather, the restructuring concerns the internal economics among the GP's principals (i.e., the reallocation of carried interest and ManCo Profit Share) and the organizational structure of the management company and general partner entities. No new side letters are being entered into in connection with the restructuring, and no existing side letters are being amended to provide any limited partner with enhanced economic or governance rights as a result of the restructuring.

Accordingly, the MFN provisions are not implicated by the restructuring in any substantive respect. No limited partner is entitled, by virtue of its MFN rights, to claim the benefit of the internal carry reallocation or the structural reorganization, as these do not constitute "terms" granted to a limited partner within the meaning of the MFN clauses.

MFN Disclosure Obligations. Notwithstanding the foregoing, eight (8) of the eleven (11) side letters containing MFN provisions also impose an affirmative obligation on the GP to provide the relevant limited partner with an updated summary of all side-letter terms upon the limited partner's written request. These disclosure obligations are typically triggered on an annual or semi-annual basis, or upon the occurrence of a material event affecting the Fund. While the restructuring itself does not give rise to new MFN-eligible terms, the GP should be prepared to include a reference to the restructuring in its next periodic MFN disclosure cycle, to the extent that limited partners request updated side-letter summaries. We recommend that a brief summary of the restructuring be prepared for inclusion in such disclosures, noting that no new side-letter terms have been created.

Conclusion: No MFN issues have been identified in connection with the restructuring. No additional action is required at this time, though the GP should be prepared to respond to MFN information requests from any of the eleven limited partners holding MFN rights and should consider proactively including a restructuring summary in the next periodic MFN disclosure distribution.

B. Expanded Key-Person / "Contributing Person" Provisions — 6 of 14 Side Letters

1. Description of Provisions. Six (6) of the fourteen (14) side letters contain "expanded key person" provisions that supplement the Key Person framework set forth in LPA Section 5.2. These provisions identify certain additional individuals—referred to as "Contributing Persons" in each of the six side letters—whose continued involvement with the Fund is of particular importance to the relevant limited partner.

All six of these side letters name David Kellner as a Contributing Person, in addition to confirming Marcus Aldridge and Priya Narayanan as Key Persons. Kellner's designation as a Contributing Person reflects his significant role in deal origination and portfolio company oversight during the Fund's formation and early investment periods, as well as his longstanding relationships with several of the limited partners who negotiated these provisions.

Importantly, none of the six side letters names Joanna Trask as a Contributing Person. Trask's departure therefore does not trigger any notification or other obligation under the Contributing Person provisions.

The Contributing Person provisions in these six side letters share a common framework, requiring the GP to notify the relevant limited partner within fifteen (15) business days of a Contributing Person's "departure from the Ardent platform," which is defined to include retirement, resignation, termination, or any other cessation of the Contributing Person's active involvement in the Fund's investment activities. The notification must be in writing and must include a summary of the circumstances of the departure and the GP's plans for continuity of the Contributing Person's responsibilities.

2. Suspension Rights. Three (3) of the six side letters containing Contributing Person provisions grant the relevant limited partner an additional right beyond mere notification. Specifically, upon receipt of notification of a Contributing Person's departure, the limited partner may request a suspension of the Fund's investment period for a period of up to ninety (90) days, during which the LPAC is to convene and review the impact of the departure on the Fund's investment activities and team composition.

The Fund's investment period is currently scheduled to expire on June 30, 2025. A suspension of the investment period for up to ninety days during the remaining investment period—particularly if triggered during the second quarter of 2024—could have a material operational impact on the Fund's ability to deploy uncommitted capital and to pursue investment opportunities in the current pipeline. We note that the Fund has approximately $840 million of uncalled commitments remaining, and the investment team has indicated that several prospective investments are in advanced stages of diligence.

For confidentiality purposes, the three limited partners holding suspension rights are identified by side-letter reference number in this section and are cross-referenced in the compliance matrix set forth in Section V below. Each of these three limited partners has been the subject of ongoing dialogue with the GP regarding the restructuring, and all three have representatives on the LPAC or have been included in the proactive engagement efforts described below.

3. Required Actions. The following actions are required in connection with the Contributing Person provisions:

(a) Notification Letters. Formal notification letters must be sent to each of the six limited partners with Contributing Person provisions regarding David Kellner's retirement, which will become effective on March 31, 2024. Under the terms of the side letters, these notifications must be sent within fifteen (15) business days of the departure date—i.e., no later than approximately April 22, 2024.

(b) Proactive Engagement with Suspension-Right Holders. For the three limited partners holding investment period suspension rights, we recommend proactive engagement in advance of the formal notification deadline. The LPAC meeting held on February 14, 2024, at which the restructuring was discussed and approved, and the LP notification letters sent on March 5, 2024, providing a general overview of the restructuring, should together help mitigate the likelihood of any limited partner exercising its suspension right. Nonetheless, the possibility of a suspension request cannot be eliminated, and the GP should be prepared to respond promptly in the event that a request is received.

(c) Coordination with Formation Counsel. We recommend coordination with Pemberton Hale LLP regarding the form, content, and timing of the Contributing Person departure notifications. Pemberton Hale LLP, as formation counsel, has institutional knowledge of the negotiating history of each side letter and can assist in tailoring the notifications to address any specific concerns that may have been raised during the side-letter negotiation process.

Conclusion: Compliance with the Contributing Person provisions is achievable, provided that the notification obligations are calendared and tracked diligently. The risk of an investment period suspension exists but is assessed as low given the proactive LPAC engagement and the advance LP notification letters. We recommend that the GP designate a specific individual within the investor relations team to monitor the notification timeline and to serve as the primary point of contact for any limited partner inquiries arising from the Contributing Person departure notifications.

C. Fee discount or Rebate Provisions — 8 of 14 Side Letters

Eight (8) of the fourteen (14) side letters contain provisions relating to management fees, including one or more of the following:

• Reduced Management Fee Rates. Several limited partners negotiated reduced management fee rates, typically reflecting reductions of ten (10) to twenty-five (25) basis points from the Fund's standard management fee rates of 1.75% per annum on committed capital during the investment period and 1.50% per annum on invested capital during the post-investment period. The specific discount applicable to each limited partner varies based on, among other factors, the size of the limited partner's commitment and the timing of the commitment during the fundraising process.

• Management Fee Rebates. Certain side letters provide for rebates of a portion of management fees paid, calculated on an annual basis and payable within a specified period following the end of each fiscal year.

• Fee Offsets. Certain side letters require that 100% (in some cases, 80%) of any transaction fees, monitoring fees, directors' fees, break-up fees, or similar fees received by the GP, the ManCo, or their affiliates from portfolio companies be offset against management fees otherwise payable by the limited partners.

Impact of the Restructuring on Fee Provisions. The restructuring does not alter the Fund's management fee rates (1.75% during the investment period / 1.50% during the post-investment period), the fee base (committed capital during the investment period / invested capital during the post-investment period), the method of calculating management fees, or the fee offset mechanics applicable to transaction fees, monitoring fees, and other portfolio company-level fees.

The internal reallocation of the ManCo Profit Share—which represents the distribution of the management fee revenues among the ManCo's members after payment of operating expenses—is an internal GP/ManCo matter and does not change the amount of the management fee charged to or collected from the limited partners. The ManCo Profit Share, which is estimated at approximately $17,150,000 annually (representing approximately 35% of the approximately $49,000,000 in annual management fee revenue), will be reallocated among the HoldCo members in accordance with the new carry allocation percentages. This reallocation is solely an internal economic matter among the principals and has no bearing on the limited partners' fee obligations or entitlements.

The ManCo itself—Ardent Capital Management LLC—remains the entity responsible for charging and collecting the management fee. Only its upstream ownership structure has changed: whereas the ManCo was previously owned directly by five individual principals, it will now be owned by HoldCo as its sole member. This change in upstream ownership does not affect the ManCo's identity, its SEC registration (CRD #298417), its contractual relationship with the Fund, or the manner in which it calculates and collects management fees.

Conclusion: The restructuring has no impact on fee-related side-letter provisions. No additional action is required in connection with the fee discount, rebate, or offset provisions contained in the eight affected side letters.

D. Management Structure Change / Transfer Consent Provisions — 4 of 14 Side Letters

1. Identification of Affected LPs. Four (4) of the fourteen (14) side letters require prior written notice and, in certain cases, affirmative consent from the relevant limited partner for any "material change in the management structure" of the Fund. The four limited partners holding these provisions are:

(a) Ridgeline Public Employees' Retirement System — Commitment: $225,000,000 (the Fund's largest limited partner). Primary Contact: Thomas Engström, Chief Investment Officer. LPAC member.

(b) Pinnacle Insurance Group — Commitment: $175,000,000. Primary Contact: Derek Mallinson, Head of Alternatives. LPAC member.

(c) Crestwood Endowment Partners — Commitment: $150,000,000. Primary Contact: Annika Johansson, Director of Private Equity. LPAC member.

(d) Haverford Capital Partners — Institutional limited partner. Not an LPAC member.

These four limited partners represent a significant portion of the Fund's total capital commitments. Ridgeline, Pinnacle, and Crestwood are each represented on the LPAC, which has already provided its consent to the restructuring. Haverford, however, is not an LPAC member and requires separate treatment, as discussed below.

2. Analysis of "Material Change in the Management Structure". The restructuring constitutes a "material change in the management structure" within the meaning of these four side letters. While the side letters do not define the term "material change in the management structure" with precision, we believe the following elements of the restructuring, taken individually or collectively, satisfy the threshold:

(a) the interposition of a new holding company (HoldCo) between the principals and the GP/ManCo, creating a multi-tiered organizational structure where none previously existed;

(b) the departure of two of the five principals—David Kellner (one of the original founding principals) and Joanna Trask—reducing the principal group from five to three continuing members;

(c) the reallocation of carried interest and ManCo Profit Share among the remaining and newly admitted principals, reflecting a significant shift in the economic alignment of the management team; and

(d) the admission of two next-generation principals—Elena Marchetti and Samuel Okonkwo—to the economic arrangements of the GP and ManCo through their membership in HoldCo.

In addition, LPA Section 8.3 (Transfer of GP Interest) is implicated by the transfer of the principals' direct membership interests in the GP to the HoldCo/GP Intermediate structure. The substitution of five individual direct members with a single institutional member (GP Intermediate, itself wholly owned by HoldCo) constitutes a "transfer" of GP membership interests within the meaning of Section 8.3. LPA Section 9.4 requires LPAC consent for such transfers, and such consent has been obtained, as described in Section VI.A below. However, the side-letter provisions in the four affected side letters impose requirements that go beyond the LPA's baseline requirements, necessitating separate compliance analysis.

3. Consent and Notice Requirements. The specific notice and consent requirements under each of the four affected side letters are as follows:

(a) Ridgeline Public Employees' Retirement System. The Ridgeline side letter requires prior written notice at least thirty (30) days before the effectiveness of any material change in the management structure. Ridgeline reserves the right to withhold its consent to such change, provided that such consent shall not be unreasonably withheld. Given that the LPAC notification letters were sent on February 5, 2024, and the restructuring is expected to become effective on February 28, 2024, the 30-day prior notice period has been substantially satisfied (23 days). However, Ridgeline's representative, Thomas Engström, participated in the LPAC meeting on February 14, 2024 and voted in favor of the restructuring. We believe that Engström's affirmative vote at the LPAC meeting, combined with the prior written notice provided on February 5, constitutes sufficient compliance with the Ridgeline side letter's requirements, notwithstanding the minor shortfall in the notice period. As a precaution, we recommend that the LP notification letter sent on March 5, 2024 include a specific acknowledgment addressed to Ridgeline confirming the restructuring and its effective date.

(b) Pinnacle Insurance Group. The Pinnacle side letter requires prior written notice and affirmative written consent for any material change in the management structure. The consent requirement under the Pinnacle side letter is more stringent than the LPA's baseline, as it requires the affirmative written consent of Pinnacle specifically (rather than merely LPAC consent). However, we note that Derek Mallinson, Pinnacle's Head of Alternatives and designated LPAC representative, participated in the February 14, 2024 LPAC meeting and voted in favor of the restructuring. We conclude that Mallinson's affirmative vote at the LPAC meeting, made in his capacity as Pinnacle's designated representative, constitutes sufficient "affirmative written consent" under the Pinnacle side letter, particularly given that the LPAC consent was documented in the written minutes of the February 14 meeting and that Mallinson signed the LPAC consent resolution on behalf of Pinnacle. Notwithstanding this conclusion, we recommend that the GP obtain a brief written confirmation from Mallinson specifically acknowledging that his LPAC vote constitutes Pinnacle's consent under the side letter, to eliminate any ambiguity.

(c) Crestwood Endowment Partners. The Crestwood side letter requires prior written notice at least twenty (20) business days before the effectiveness of any material change in the management structure. The LPAC notification letter was sent on February 5, 2024, and the restructuring is expected to become effective on February 28, 2024—a period of approximately seventeen (17) business days. This falls slightly short of the twenty-business-day notice period. However, as with Ridgeline, Crestwood's representative, Annika Johansson, participated in the February 14, 2024 LPAC meeting and voted in favor of the restructuring. We believe that Johansson's participation and affirmative vote, together with the advance notice provided, constitute substantial compliance with the Crestwood side letter. The LP notification letter sent on March 5, 2024 provides additional post-effectiveness notice. We recommend monitoring for any concerns raised by Crestwood and, if necessary, providing a supplemental acknowledgment.

(d) Haverford Capital Partners. The Haverford side letter requires prior written notice and reserves the right for Haverford to object to any material change in the management structure within fifteen (15) business days of receipt of such notice. Unlike Ridgeline, Pinnacle, and Crestwood, Haverford is not a member of the LPAC and was therefore not a participant in the February 14, 2024 LPAC meeting. The general LP notification letter sent on March 5, 2024 provides notice of the restructuring but does not specifically address the Haverford side letter's objection-right provision. Separate written notice to Haverford Capital Partners must be sent, and we recommend that such notice be sent promptly—ideally as a supplemental letter accompanying or shortly following the March 5 LP notification—specifically identifying the side-letter management-structure-change provision, describing the restructuring in sufficient detail, and affording Haverford the full fifteen-business-day objection window required under its side letter.

The LPAC notification letters were sent on February 5, 2024. The LPAC met virtually on February 14, 2024, and unanimous consent was obtained from all four LPAC members: Ridgeline (Thomas Engström), Crestwood (Annika Johansson), Pinnacle (Derek Mallinson), and Graystone Family Office LLC (Catherine Whitfield). The LPAC consent resolution covers the restructuring in its entirety, including the formation of HoldCo and GP Intermediate, the amendments to the GP and ManCo LLC agreements, LPA Amendment No. 1, the carry reallocation, and the principal departures.

4. Status and Recommended Actions. The following summarizes the status of compliance with the management structure change provisions and our recommended next steps:

(a) Ridgeline, Pinnacle, and Crestwood. We conclude that the LPAC consent obtained on February 14, 2024 satisfies the consent and notice requirements contained in the Ridgeline, Pinnacle, and Crestwood side letters, subject to the minor qualifications noted above regarding notice periods. The analysis of whether LPAC consent constitutes sufficient "affirmative consent" under the Pinnacle side letter is resolved in the affirmative, given that Derek Mallinson participated in the February 14, 2024 LPAC meeting in his capacity as Pinnacle's designated representative and voted in favor of the restructuring. Notwithstanding, we recommend that the GP obtain brief written confirmation from Mallinson to confirm this position.

(b) Haverford Capital Partners. A supplemental notice must be sent to Haverford Capital Partners specifically addressing the side-letter management-structure-change provision. We recommend that this supplemental notice be included as part of the LP notification letter sent on March 5, 2024, with a separate cover letter to Haverford referencing the side letter and affording the fifteen-business-day objection window. The GP should track the objection deadline and be prepared to engage with Haverford if an objection is raised.

Conclusion: Compliance with the management structure change provisions is achievable. The LPAC consent of February 14, 2024 and the LP notification letters of March 5, 2024 satisfy or will satisfy the notice and consent requirements for Ridgeline, Pinnacle, and Crestwood, subject to the recommended confirmatory steps. Separate action is required with respect to Haverford Capital Partners, as described above.

E. Co-Investment Priority Rights — 9 of 14 Side Letters

Nine (9) of the fourteen (14) side letters grant the relevant limited partner a priority right, right of first offer, or other preferential treatment with respect to co-investment opportunities alongside the Fund. These provisions vary in their specificity and scope, with some side letters providing a general "best efforts" commitment to offer co-investment opportunities and others establishing a tiered allocation framework under which the limited partner is entitled to participate in a specified percentage of co-investment deal flow.

Co-investment allocation has historically been managed by the GP in accordance with the Fund's existing Co-Investment Allocation Policy, which sets forth the procedures and priorities for offering co-investment opportunities to limited partners, affiliated funds, and GP/principal co-investors. The existing policy reflects the allocation percentages and eligibility of the five individual principals who currently hold direct interests in the GP and ManCo.

Impact of the Restructuring on Co-Investment Provisions. The restructuring necessitates an update to the Co-Investment Allocation Policy to reflect the following changes:

(a) the removal of David Kellner and Joanna Trask from co-investment eligibility, consistent with their separation from the Ardent platform;

(b) updated allocation percentages for the remaining HoldCo members with respect to any GP/principal co-investment allocations:

• Marcus Aldridge: 42%

• Priya Narayanan: 36%

• Robert Hsiao: 14%

• Elena Marchetti: 4%

• Samuel Okonkwo: 4%

(c) no change to the limited partners' co-investment priority rights, which continue to be governed by the applicable side-letter provisions and the Co-Investment Allocation Policy.

A revised Co-Investment Allocation Policy has been prepared and is effective as of February 28, 2024. The revised policy reflects the updated principal-level allocations while preserving the existing limited partner co-investment priority framework in its entirety. The GP's obligations to offer co-investment opportunities to limited partners holding priority rights are unchanged.

Conclusion: No conflict exists between the restructuring and the limited partners' co-investment priority rights. The updated Co-Investment Allocation Policy has been prepared and is effective as of the restructuring date.

V. Side-Letter Compliance Matrix

The following table provides a summary of the fourteen (14) side letters currently in effect, organized by limited partner name or identifier, with an indication of the substantive provisions contained in each side letter and the current compliance status in connection with the restructuring.

All action items identified in the foregoing matrix are tracked against their respective deadlines in the Timeline of Compliance Actions set forth in Appendix B to this memorandum. The GP should designate a responsible individual within the investor relations team or the office of the General Counsel to monitor compliance with each deadline and to coordinate with Calderwood & Harkness LLP and Pemberton Hale LLP as necessary.

VI. Interaction with LPA Provisions

A. Section 9.4 — LPAC Consent

Section 9.4 of the LPA requires the prior consent of the LPAC for certain enumerated actions by the GP, including, among others, amendments to the LPA, transfers of the GP interest, changes in the identity or composition of the Key Persons, and other material actions affecting the governance or economic terms of the Fund. The restructuring implicates several of these enumerated categories, including the transfer of GP membership interests (Section 8.3) and the amendment of the LPA (LPA Amendment No. 1).

Consent was solicited from the LPAC by letter dated February 5, 2024. The solicitation letter described the restructuring in detail, including the formation of HoldCo and GP Intermediate, the amendments to the GP and ManCo LLC agreements, the terms of LPA Amendment No. 1, the carry reallocation among the remaining and next-generation principals, and the departures of Kellner and Trask. The solicitation letter was accompanied by copies of the execution versions of the principal restructuring documents and a summary memorandum prepared by Pemberton Hale LLP.

A virtual LPAC meeting was held on February 14, 2024. All four LPAC members participated:

• Thomas Engström (Ridgeline Public Employees' Retirement System)

• Annika Johansson (Crestwood Endowment Partners)

• Derek Mallinson (Pinnacle Insurance Group)

• Catherine Whitfield (Graystone Family Office LLC)

Unanimous consent was obtained from all four LPAC members. The LPAC consent resolution, signed by each member, covers the following:

(a) the formation of HoldCo and GP Intermediate as new Delaware limited liability companies;

(b) the execution of the Second Amended and Restated GP LLC Agreement and the Second Amended and Restated ManCo LLC Agreement;

(d) the reallocation of carried interest and ManCo Profit Share among the HoldCo members; and

(e) the departures of David Kellner and Joanna Trask, and the execution of their respective separation agreements.

The LPAC consent resolution is on file with Pemberton Hale LLP and has been provided to Calderwood & Harkness LLP for purposes of this analysis.

B. Section 8.3 — Transfer of GP Interest

Section 8.3 of the LPA governs transfers of the GP's interest in the Fund. Under Section 8.3, any transfer, assignment, pledge, or other disposition of the GP's interest (or any direct or indirect interest therein) is prohibited without the prior consent of the LPAC, except for certain permitted transfers to affiliates of the GP that satisfy specified conditions.

The restructuring involves the substitution of the five individual principals' direct membership interests in the GP with a single membership interest held by Ardent GP Intermediate LLC, which is itself wholly owned by HoldCo. This substitution constitutes a "transfer" of indirect interests in the GP within the meaning of Section 8.3, as the ultimate beneficial ownership of the GP is being restructured from five individual members to a single institutional member (GP Intermediate/HoldCo).

The LPAC consent obtained on February 14, 2024 expressly covers this transfer and satisfies the consent requirement under Section 8.3. In addition, the restructuring satisfies the conditions for a "permitted transfer" to an affiliate under Section 8.3(b), as HoldCo and GP Intermediate are affiliates of the GP and are controlled by the same individuals who currently control the GP (i.e., Aldridge and Narayanan).

As noted in Section IV.D above, the side-letter provisions in the Ridgeline, Pinnacle, Crestwood, and Haverford side letters impose requirements that go beyond Section 8.3's baseline consent requirement. These additional requirements have been addressed in the side-letter analysis above.

C. Section 9.7 — Removal of GP

Section 9.7 of the LPA sets forth the conditions under which the GP may be removed as the general partner of the Fund. Removal requires the affirmative vote of limited partners holding at least 75% of the aggregate capital commitments and may be effected only upon the occurrence of specified "cause" events or, in certain circumstances, without cause subject to a supermajority vote threshold.

No removal of the GP is contemplated in connection with the restructuring. The GP entity—Ardent Capital GP III LLC—continues as the sole general partner of the Fund. The restructuring changes only the upstream ownership of the GP (from five individual principals holding direct membership interests to GP Intermediate/HoldCo as the sole member). The identity of the GP, its rights and obligations under the LPA, and its authority to act on behalf of the Fund remain unchanged.

Accordingly, Section 9.7 is not implicated by the restructuring, and no action is required under this provision.

VII. Action Items and Recommendations

Based on the foregoing analysis, we have identified the following action items, organized by status:

Completed Items:

1. LPAC Notification and Consent Solicitation. LPAC notification and consent solicitation letters were sent on February 5, 2024. Unanimous LPAC consent was obtained at the virtual LPAC meeting held on February 14, 2024, with all four LPAC members (Ridgeline, Crestwood, Pinnacle, and Graystone) voting in favor of the restructuring.

2. LP Notification Letters. LP notification letters were sent to all forty-seven (47) limited partners on March 5, 2024, providing a general description of the restructuring and confirming that there is no change to the Fund's investment strategy, management fee rates (1.75% per annum during the investment period / 1.50% per annum during the post-investment period), or fund term (December 31, 2029, with two one-year extension options at the GP's discretion).

3. Revised Co-Investment Allocation Policy. A revised Co-Investment Allocation Policy has been prepared and is effective as of February 28, 2024, reflecting the updated principal-level allocation percentages and the removal of Kellner and Trask from co-investment eligibility.

Action Required:

4. Supplemental Notice to Haverford Capital Partners. A supplemental notice must be sent to Haverford Capital Partners specifically addressing the side-letter management-structure-change provision and affording Haverford the fifteen (15) business-day objection window required under its side letter. This notice should be sent as promptly as practicable, ideally as a supplement to the March 5 LP notification letter. The GP should track the objection deadline and be prepared to engage with Haverford in the event that an objection is raised.

5. Contributing Person Departure Notifications. The GP must calendar and fulfill its notification obligations to the six limited partners with Contributing Person provisions regarding David Kellner's retirement (effective March 31, 2024). Under the terms of the applicable side letters, these notifications must be sent within fifteen (15) business days of the departure date—i.e., no later than approximately April 22, 2024. The form and content of the notifications should be coordinated with Pemberton Hale LLP.

6. Monitoring for Suspension Requests. The GP must monitor whether any of the three limited partners holding investment period suspension rights elects to exercise such rights following receipt of the Contributing Person departure notification. In the event that a suspension request is received, the GP should promptly engage with the requesting limited partner and coordinate with Pemberton Hale LLP on response strategy, including the convening of an LPAC review meeting if required.

CALDERWOOD & HARKNESS LLP

By: ________

Name: Owen Fischer

Title: Lead Associate

By: ________

Name: Stephen Adler

Title: Working Associate

Reviewed and Approved:

By: ________

Name: Nicholas Stern

Title: Responsible Partner

Date: February 22, 2024

Principal	Post-Restructuring Carry Allocation
Marcus Aldridge	42%
Priya Narayanan	36%
Robert Hsiao	14%
Elena Marchetti	4%
Samuel Okonkwo	4%
LP Identifier / Side-Letter Ref.	MFN	Contributing Person	Suspension Right	Fee discount / Rebate	Structure Change Consent	Co-Invest Priority	Compliance Status	Required Action / Deadline
Ridgeline Public Employees' Retirement System (SL-01)	Y	Y (Kellner)	Y	Y (15 bps reduction)	Y (30-day notice; consent not to be unreasonably withheld)	Y	Compliant (subject to confirmatory steps)	Confirm LPAC consent satisfies side-letter requirement; send Contributing Person notification by ~April 22, 2024
Pinnacle Insurance Group (SL-02)	Y	Y (Kellner)	Y	Y (25 bps reduction)	Y (notice + affirmative written consent)	Y	Compliant (subject to confirmatory steps)	Obtain written confirmation from Mallinson re: LPAC consent; send Contributing Person notification by ~April 22, 2024
Crestwood Endowment Partners (SL-03)	Y	Y (Kellner)	N	Y (20 bps reduction)	Y (20 business days' notice)	Y	Compliant (subject to confirmatory steps)	Send Contributing Person notification by ~April 22, 2024
Haverford Capital Partners (SL-04)	Y	N	N	Y (10 bps reduction)	Y (notice + 15 business day objection right)	Y	Action Required	Send supplemental notice with objection-right window; track 15 business day deadline
Graystone Family Office LLC (SL-05)	Y	Y (Kellner)	Y	N	N	Y	Compliant (notification pending)	Send Contributing Person notification by ~April 22, 2024
LP-06	Y	Y (Kellner)	N	Y (15 bps reduction)	N	Y	Compliant (notification pending)	Send Contributing Person notification by ~April 22, 2024
LP-07	Y	Y (Kellner)	N	Y (10 bps reduction)	N	N	Compliant (notification pending)	Send Contributing Person notification by ~April 22, 2024
LP-08	Y	N	N	Y (15 bps reduction)	N	Y	Compliant	None
LP-09	Y	N	N	N	N	Y	Compliant	None
LP-10	Y	N	N	Y (20 bps reduction)	N	Y	Compliant	None
LP-11	Y	N	N	N	N	N	Compliant	None
LP-12	N	N	N	N	N	N	Compliant	None
LP-13	N	N	N	N	N	Y	Compliant	None
LP-14	N	N	N	N	N	N	Compliant	None
LP Name	Commitment ($M)	Side-Letter Date	MFN (Details)	Key-Person / Contributing Person (Details)	Suspension Right (Details)	Fee Provisions (Details)	Structure Change Consent (Details)	Co-Invest Priority (Details)	Notes
Ridgeline Public Employees' Retirement System	$225	July 1, 2020	Standard MFN; $200M threshold carve-out; annual disclosure upon request	Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification	Yes; 90-day suspension upon Contributing Person departure; LPAC review required	15 bps reduction (1.60% IP / 1.35% post-IP); 100% fee offset	30-day prior written notice; consent not to be unreasonably withheld	Tier 1 priority; minimum 10% of each co-invest opportunity >$25M	LPAC member; largest LP
Pinnacle Insurance Group	$175	July 15, 2020	Standard MFN; $200M threshold carve-out; semi-annual disclosure	Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification	Yes; 90-day suspension upon Contributing Person departure; LPAC review required	25 bps reduction (1.50% IP / 1.25% post-IP); 100% fee offset; monitoring fee rebate	Prior written notice + affirmative written consent required	Tier 1 priority; right of first offer on co-invest opportunities >$50M	LPAC member; most stringent consent requirement
Crestwood Endowment Partners	$150	August 1, 2020	Standard MFN; $150M threshold carve-out; annual disclosure upon request	Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification	No	20 bps reduction (1.55% IP / 1.30% post-IP); 80% fee offset	20 business days' prior written notice	Tier 1 priority; minimum 5% of each co-invest opportunity	LPAC member

MEMORANDUM
PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
To: Marcus Aldridge, Co-Founder & Managing Partner, Ardent Capital Partners III LP Priya Narayanan, Co-Founder & Managing Partner, Ardent Capital Partners III LP
From: Owen Fischer, Lead Associate, Calderwood & Harkness LLP Stephen Adler, Working Associate, Calderwood & Harkness LLP
Date: February 22, 2024
Re: Side-Letter Compliance and Key-Person Analysis — Management Company Restructuring of Ardent Capital Partners III LP
Reviewed by: Nicholas Stern, Responsible Partner, Calderwood & Harkness LLP
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I. Executive Summary
The purpose of this memorandum is to analyze the compliance of the proposed management company restructuring and economics realignment of Ardent Capital Partners III LP (the "Fund") with the fourteen (14) side letters currently in effect between the Fund's general partner and certain of its limited partners, and to assess whether the restructuring triggers a "Key Person Event" under Section 5.2 of the Amended and Restated Agreement of Limited Partnership of the Fund, dated as of July 1, 2020 (as amended from time to time, the "LPA").
Fund Overview. The Fund is a Delaware limited partnership with approximately $2.8 billion in total capital commitments from forty-seven (47) limited partners. As of the date of this memorandum, the Fund has called approximately $1.96 billion (representing approximately 70% of total commitments) and maintains eleven (11) active portfolio companies with aggregate invested capital of approximately $1.88 billion. The Fund's general partner is Ardent Capital GP III LLC, a Delaware limited liability company (the "GP"), and its investment adviser is Ardent Capital Management LLC, a Delaware limited liability company registered with the Securities and Exchange Commission under CRD #298417 (the "ManCo").
Restructuring Overview. The proposed restructuring involves the following principal elements:
(a) the formation of Ardent Capital Holdings LLC ("HoldCo") as a new Delaware limited liability company to serve as the parent holding company for the GP and the ManCo;
(b) the formation of Ardent GP Intermediate LLC ("GP Intermediate") as an intermediate entity between HoldCo and the GP;
(c) the conversion of the GP and the ManCo into wholly owned subsidiaries of HoldCo (with the GP held through GP Intermediate);
(d) the reallocation of carried interest (currently set at 20% of net profits, subject to an 8% preferred return hurdle) and ManCo Profit Share among remaining and next-generation principals; and
(e) the separation of two departing principals—David Kellner (retiring, effective March 31, 2024) and Joanna Trask (voluntary departure, effective April 15, 2024)—and the vesting and crystallization of their respective economic entitlements in accordance with the terms of their separation agreements.
Post-Restructuring Carried Interest Allocation. Following completion of the restructuring, carried interest will be allocated among the HoldCo members as follows:
Summary Conclusions. Based on our review and analysis, we reach the following principal conclusions:
(a) No Key Person Event is triggered. Neither David Kellner nor Joanna Trask is a designated "Key Person" under Section 5.2 of the LPA. Both designated Key Persons—Marcus Aldridge and Priya Narayanan—will remain in their current roles as Co-Founders and Managing Partners, continuing to devote substantially all of their business time to the Fund.
(b) Compliance with all fourteen side letters is achievable, subject to timely notifications and, in four cases, prior written notice and/or affirmative consent from the affected limited partners.
(c) Specific action items have been identified for each category of side-letter provision, as detailed in Sections IV and VII below, and certain of these action items remain pending as of the date of this memorandum.
II. Scope and Methodology
In preparing this memorandum, Calderwood & Harkness LLP undertook the following steps to ensure a comprehensive analysis of the side-letter landscape and the interaction between the proposed restructuring and the Fund's existing contractual obligations.
Document Review. We received and reviewed complete copies of all fourteen (14) side letters currently in effect from Pemberton Hale LLP (Victoria Langford, Partner), the Fund's formation counsel. Each side letter was reviewed in its entirety, including any amendments or supplements thereto, and was catalogued by limited partner name, commitment amount, date of execution, and substantive provision categories.
Cross-Referencing Against LPA. Each side letter was cross-referenced against the operative provisions of the LPA, with particular attention to the following sections:
•  Section 5.2 (Key Person);
•  Section 8.3 (Transfer of GP Interest);
•  Section 9.4 (LPAC Consent); and
•  Section 9.7 (Removal of GP).
Categorization of Side-Letter Provisions. For purposes of this analysis, we categorized the substantive provisions contained in the fourteen side letters into the following five categories:
(A) Most Favored Nation ("MFN") provisions;
(B) Expanded Key-Person / "Contributing Person" provisions;
(C) Fee discount or Rebate provisions;
(D) Management Structure Change / Transfer Consent provisions; and
(E) Co-Investment Priority provisions.
This categorization is intended to facilitate a structured analysis of the restructuring's impact on each type of provision. Certain side letters contain provisions falling within multiple categories, and such side letters are addressed under each relevant category heading below.
Review of Restructuring Documents. We also reviewed the proposed restructuring documents, including the following:
•  HoldCo LLC Agreement (first draft circulated November 15, 2023; execution version dated February 28, 2024);
•  Second Amended and Restated GP LLC Agreement;
•  Second Amended and Restated ManCo LLC Agreement;
•  LPA Amendment No. 1 (effective February 28, 2024);
•  Carried Interest Allocation Agreement among HoldCo members; and
•  Separation Agreements for David Kellner and Joanna Trask, including vesting schedules and release provisions.
Our analysis is based on the documents and information provided to us as of the date of this memorandum. We have not independently verified the factual representations made by the Fund, the GP, the ManCo, or their respective counsel, and we have assumed the accuracy and completeness of all documents and information furnished to us.
III. Key-Person Analysis Under LPA Section 5.2
A. Designated Key Persons
Section 5.2 of the LPA designates two individuals as "Key Persons": Marcus Aldridge and Priya Narayanan. These designations reflect the central roles that Aldridge and Narayanan play in the Fund's investment decision-making, portfolio management, and investor relations activities, as well as the representations made to limited partners during the fundraising process.
Under Section 5.2, a "Key Person Event" is triggered if either of the following conditions is satisfied:
(a) both Key Persons cease to devote "substantially all of their business time" (as defined in Section 5.2(b) of the LPA) to the affairs of the Fund and its portfolio companies; or
(b) one Key Person ceases to devote substantially all of his or her business time to the affairs of the Fund and its portfolio companies, and a replacement individual acceptable to the Limited Partner Advisory Committee (the "LPAC") is not designated within one hundred twenty (120) days following the occurrence of such cessation.
Upon the occurrence of a Key Person Event, the Fund's investment period is automatically suspended, and the GP is prohibited from making new investments (other than follow-on investments in existing portfolio companies not exceeding certain thresholds) until the earlier of (i) LPAC approval of a replacement Key Person or (ii) the affirmative vote of limited partners holding at least 66⅔% of the aggregate capital commitments to resume the investment period.
Application to the Restructuring. It is critical to note that neither David Kellner nor Joanna Trask is a designated Key Person under Section 5.2 of the LPA. Kellner and Trask serve as principals of the Fund and have played meaningful roles in deal sourcing, portfolio management, and certain investor-facing activities. However, the LPA's Key Person provision is expressly limited to the two named individuals—Aldridge and Narayanan—and does not extend to other members of the investment team or the GP's principals by its terms.
Both Aldridge and Narayanan will remain as Co-Founders and Managing Partners of the Fund following the completion of the restructuring. Their titles, responsibilities, day-to-day involvement in the Fund's investment and management activities, and commitment to devoting substantially all of their business time to the Fund will be unchanged. Neither individual is departing the platform or reducing his or her time commitment to the Fund in any respect.
Conclusion: No Key Person Event is triggered under LPA Section 5.2 by the departures of David Kellner or Joanna Trask, or by any other element of the proposed restructuring.
B. Impact of Restructuring on Key Person Status
Beyond the threshold question of whether the restructuring triggers a Key Person Event, we have considered whether the restructuring could be argued to affect the status of the designated Key Persons in any way that might give rise to concerns under Section 5.2 or related side-letter provisions.
The restructuring does not alter the identity of the Key Persons. While Aldridge and Narayanan will hold their economic interests in the GP and ManCo through HoldCo (rather than directly, as is currently the case), this change in the organizational holding structure does not affect their roles, titles, or time commitments to the Fund. Section 5.2 focuses on whether the designated Key Persons "devote substantially all of their business time" to the Fund, not on the manner in which their economic interests in the GP or ManCo are held. Accordingly, the interposition of HoldCo as a holding vehicle does not implicate the Key Person provision.
LPA Amendment No. 1, which is expected to become effective on February 28, 2024, makes conforming changes to certain defined terms in Section 5.2, including updates to references to the GP's organizational structure and the identity of entities through which the Key Persons hold their interests. Importantly, LPA Amendment No. 1 does not change the identity of the Key Persons, does not alter the definition of "substantially all of their business time," and does not modify the thresholds or consequences of a Key Person Event.
The LPAC consent obtained on February 14, 2024, expressly covers the restructuring in its entirety, including the formation of HoldCo and GP Intermediate, the amendments to the GP and ManCo LLC agreements, LPA Amendment No. 1, the carry reallocation, and the principal departures. The LPAC consent further acknowledges that the restructuring does not constitute a Key Person Event and that any conforming amendments to Section 5.2 are ministerial in nature.
IV. Side-Letter Analysis by Category
A. Most Favored Nation (MFN) Provisions — 11 of 14 Side Letters
Eleven (11) of the fourteen (14) side letters contain standard Most Favored Nation provisions. These MFN clauses generally entitle the relevant limited partner to the benefit of any more favorable economic or governance term granted by the GP to any other limited partner in connection with such other limited partner's investment in the Fund. The MFN provisions are subject to customary carve-outs, including exclusions for:
•  terms granted to limited partners whose capital commitments exceed a specified threshold (typically $200 million or $250 million);
•  terms required by applicable law, regulation, or the regulatory status of the requesting limited partner (e.g., ERISA-related provisions, Volcker Rule provisions, or provisions required by state public records laws);
•  tax-related provisions specific to the requesting limited partner's tax status or jurisdiction; and
•  co-investment allocations, which are generally subject to the GP's discretion under the Co-Investment Allocation Policy.
Impact of the Restructuring on MFN Provisions. The restructuring does not create any new limited partner-specific economic or governance terms. Rather, the restructuring concerns the internal economics among the GP's principals (i.e., the reallocation of carried interest and ManCo Profit Share) and the organizational structure of the management company and general partner entities. No new side letters are being entered into in connection with the restructuring, and no existing side letters are being amended to provide any limited partner with enhanced economic or governance rights as a result of the restructuring.
Accordingly, the MFN provisions are not implicated by the restructuring in any substantive respect. No limited partner is entitled, by virtue of its MFN rights, to claim the benefit of the internal carry reallocation or the structural reorganization, as these do not constitute "terms" granted to a limited partner within the meaning of the MFN clauses.
MFN Disclosure Obligations. Notwithstanding the foregoing, eight (8) of the eleven (11) side letters containing MFN provisions also impose an affirmative obligation on the GP to provide the relevant limited partner with an updated summary of all side-letter terms upon the limited partner's written request. These disclosure obligations are typically triggered on an annual or semi-annual basis, or upon the occurrence of a material event affecting the Fund. While the restructuring itself does not give rise to new MFN-eligible terms, the GP should be prepared to include a reference to the restructuring in its next periodic MFN disclosure cycle, to the extent that limited partners request updated side-letter summaries. We recommend that a brief summary of the restructuring be prepared for inclusion in such disclosures, noting that no new side-letter terms have been created.
Conclusion: No MFN issues have been identified in connection with the restructuring. No additional action is required at this time, though the GP should be prepared to respond to MFN information requests from any of the eleven limited partners holding MFN rights and should consider proactively including a restructuring summary in the next periodic MFN disclosure distribution.
B. Expanded Key-Person / "Contributing Person" Provisions — 6 of 14 Side Letters
1. Description of Provisions.  Six (6) of the fourteen (14) side letters contain "expanded key person" provisions that supplement the Key Person framework set forth in LPA Section 5.2. These provisions identify certain additional individuals—referred to as "Contributing Persons" in each of the six side letters—whose continued involvement with the Fund is of particular importance to the relevant limited partner.
All six of these side letters name David Kellner as a Contributing Person, in addition to confirming Marcus Aldridge and Priya Narayanan as Key Persons. Kellner's designation as a Contributing Person reflects his significant role in deal origination and portfolio company oversight during the Fund's formation and early investment periods, as well as his longstanding relationships with several of the limited partners who negotiated these provisions.
Importantly, none of the six side letters names Joanna Trask as a Contributing Person. Trask's departure therefore does not trigger any notification or other obligation under the Contributing Person provisions.
The Contributing Person provisions in these six side letters share a common framework, requiring the GP to notify the relevant limited partner within fifteen (15) business days of a Contributing Person's "departure from the Ardent platform," which is defined to include retirement, resignation, termination, or any other cessation of the Contributing Person's active involvement in the Fund's investment activities. The notification must be in writing and must include a summary of the circumstances of the departure and the GP's plans for continuity of the Contributing Person's responsibilities.
2. Suspension Rights.  Three (3) of the six side letters containing Contributing Person provisions grant the relevant limited partner an additional right beyond mere notification. Specifically, upon receipt of notification of a Contributing Person's departure, the limited partner may request a suspension of the Fund's investment period for a period of up to ninety (90) days, during which the LPAC is to convene and review the impact of the departure on the Fund's investment activities and team composition.
The Fund's investment period is currently scheduled to expire on June 30, 2025. A suspension of the investment period for up to ninety days during the remaining investment period—particularly if triggered during the second quarter of 2024—could have a material operational impact on the Fund's ability to deploy uncommitted capital and to pursue investment opportunities in the current pipeline. We note that the Fund has approximately $840 million of uncalled commitments remaining, and the investment team has indicated that several prospective investments are in advanced stages of diligence.
For confidentiality purposes, the three limited partners holding suspension rights are identified by side-letter reference number in this section and are cross-referenced in the compliance matrix set forth in Section V below. Each of these three limited partners has been the subject of ongoing dialogue with the GP regarding the restructuring, and all three have representatives on the LPAC or have been included in the proactive engagement efforts described below.
3. Required Actions.  The following actions are required in connection with the Contributing Person provisions:
(a) Notification Letters. Formal notification letters must be sent to each of the six limited partners with Contributing Person provisions regarding David Kellner's retirement, which will become effective on March 31, 2024. Under the terms of the side letters, these notifications must be sent within fifteen (15) business days of the departure date—i.e., no later than approximately April 22, 2024.
(b) Proactive Engagement with Suspension-Right Holders. For the three limited partners holding investment period suspension rights, we recommend proactive engagement in advance of the formal notification deadline. The LPAC meeting held on February 14, 2024, at which the restructuring was discussed and approved, and the LP notification letters sent on March 5, 2024, providing a general overview of the restructuring, should together help mitigate the likelihood of any limited partner exercising its suspension right. Nonetheless, the possibility of a suspension request cannot be eliminated, and the GP should be prepared to respond promptly in the event that a request is received.
(c) Coordination with Formation Counsel. We recommend coordination with Pemberton Hale LLP regarding the form, content, and timing of the Contributing Person departure notifications. Pemberton Hale LLP, as formation counsel, has institutional knowledge of the negotiating history of each side letter and can assist in tailoring the notifications to address any specific concerns that may have been raised during the side-letter negotiation process.
Conclusion: Compliance with the Contributing Person provisions is achievable, provided that the notification obligations are calendared and tracked diligently. The risk of an investment period suspension exists but is assessed as low given the proactive LPAC engagement and the advance LP notification letters. We recommend that the GP designate a specific individual within the investor relations team to monitor the notification timeline and to serve as the primary point of contact for any limited partner inquiries arising from the Contributing Person departure notifications.
C. Fee discount or Rebate Provisions — 8 of 14 Side Letters
Eight (8) of the fourteen (14) side letters contain provisions relating to management fees, including one or more of the following:
•  Reduced Management Fee Rates. Several limited partners negotiated reduced management fee rates, typically reflecting reductions of ten (10) to twenty-five (25) basis points from the Fund's standard management fee rates of 1.75% per annum on committed capital during the investment period and 1.50% per annum on invested capital during the post-investment period. The specific discount applicable to each limited partner varies based on, among other factors, the size of the limited partner's commitment and the timing of the commitment during the fundraising process.
•  Management Fee Rebates. Certain side letters provide for rebates of a portion of management fees paid, calculated on an annual basis and payable within a specified period following the end of each fiscal year.
•  Fee Offsets. Certain side letters require that 100% (in some cases, 80%) of any transaction fees, monitoring fees, directors' fees, break-up fees, or similar fees received by the GP, the ManCo, or their affiliates from portfolio companies be offset against management fees otherwise payable by the limited partners.
Impact of the Restructuring on Fee Provisions. The restructuring does not alter the Fund's management fee rates (1.75% during the investment period / 1.50% during the post-investment period), the fee base (committed capital during the investment period / invested capital during the post-investment period), the method of calculating management fees, or the fee offset mechanics applicable to transaction fees, monitoring fees, and other portfolio company-level fees.
The internal reallocation of the ManCo Profit Share—which represents the distribution of the management fee revenues among the ManCo's members after payment of operating expenses—is an internal GP/ManCo matter and does not change the amount of the management fee charged to or collected from the limited partners. The ManCo Profit Share, which is estimated at approximately $17,150,000 annually (representing approximately 35% of the approximately $49,000,000 in annual management fee revenue), will be reallocated among the HoldCo members in accordance with the new carry allocation percentages. This reallocation is solely an internal economic matter among the principals and has no bearing on the limited partners' fee obligations or entitlements.
The ManCo itself—Ardent Capital Management LLC—remains the entity responsible for charging and collecting the management fee. Only its upstream ownership structure has changed: whereas the ManCo was previously owned directly by five individual principals, it will now be owned by HoldCo as its sole member. This change in upstream ownership does not affect the ManCo's identity, its SEC registration (CRD #298417), its contractual relationship with the Fund, or the manner in which it calculates and collects management fees.
Conclusion: The restructuring has no impact on fee-related side-letter provisions. No additional action is required in connection with the fee discount, rebate, or offset provisions contained in the eight affected side letters.
D. Management Structure Change / Transfer Consent Provisions — 4 of 14 Side Letters
1. Identification of Affected LPs.  Four (4) of the fourteen (14) side letters require prior written notice and, in certain cases, affirmative consent from the relevant limited partner for any "material change in the management structure" of the Fund. The four limited partners holding these provisions are:
(a) Ridgeline Public Employees' Retirement System — Commitment: $225,000,000 (the Fund's largest limited partner). Primary Contact: Thomas Engström, Chief Investment Officer. LPAC member.
(b) Pinnacle Insurance Group — Commitment: $175,000,000. Primary Contact: Derek Mallinson, Head of Alternatives. LPAC member.
(c) Crestwood Endowment Partners — Commitment: $150,000,000. Primary Contact: Annika Johansson, Director of Private Equity. LPAC member.
(d) Haverford Capital Partners — Institutional limited partner. Not an LPAC member.
These four limited partners represent a significant portion of the Fund's total capital commitments. Ridgeline, Pinnacle, and Crestwood are each represented on the LPAC, which has already provided its consent to the restructuring. Haverford, however, is not an LPAC member and requires separate treatment, as discussed below.
2. Analysis of "Material Change in the Management Structure".  The restructuring constitutes a "material change in the management structure" within the meaning of these four side letters. While the side letters do not define the term "material change in the management structure" with precision, we believe the following elements of the restructuring, taken individually or collectively, satisfy the threshold:
(a) the interposition of a new holding company (HoldCo) between the principals and the GP/ManCo, creating a multi-tiered organizational structure where none previously existed;
(b) the departure of two of the five principals—David Kellner (one of the original founding principals) and Joanna Trask—reducing the principal group from five to three continuing members;
(c) the reallocation of carried interest and ManCo Profit Share among the remaining and newly admitted principals, reflecting a significant shift in the economic alignment of the management team; and
(d) the admission of two next-generation principals—Elena Marchetti and Samuel Okonkwo—to the economic arrangements of the GP and ManCo through their membership in HoldCo.
In addition, LPA Section 8.3 (Transfer of GP Interest) is implicated by the transfer of the principals' direct membership interests in the GP to the HoldCo/GP Intermediate structure. The substitution of five individual direct members with a single institutional member (GP Intermediate, itself wholly owned by HoldCo) constitutes a "transfer" of GP membership interests within the meaning of Section 8.3. LPA Section 9.4 requires LPAC consent for such transfers, and such consent has been obtained, as described in Section VI.A below. However, the side-letter provisions in the four affected side letters impose requirements that go beyond the LPA's baseline requirements, necessitating separate compliance analysis.
3. Consent and Notice Requirements.  The specific notice and consent requirements under each of the four affected side letters are as follows:
(a) Ridgeline Public Employees' Retirement System. The Ridgeline side letter requires prior written notice at least thirty (30) days before the effectiveness of any material change in the management structure. Ridgeline reserves the right to withhold its consent to such change, provided that such consent shall not be unreasonably withheld. Given that the LPAC notification letters were sent on February 5, 2024, and the restructuring is expected to become effective on February 28, 2024, the 30-day prior notice period has been substantially satisfied (23 days). However, Ridgeline's representative, Thomas Engström, participated in the LPAC meeting on February 14, 2024 and voted in favor of the restructuring. We believe that Engström's affirmative vote at the LPAC meeting, combined with the prior written notice provided on February 5, constitutes sufficient compliance with the Ridgeline side letter's requirements, notwithstanding the minor shortfall in the notice period. As a precaution, we recommend that the LP notification letter sent on March 5, 2024 include a specific acknowledgment addressed to Ridgeline confirming the restructuring and its effective date.
(b) Pinnacle Insurance Group. The Pinnacle side letter requires prior written notice and affirmative written consent for any material change in the management structure. The consent requirement under the Pinnacle side letter is more stringent than the LPA's baseline, as it requires the affirmative written consent of Pinnacle specifically (rather than merely LPAC consent). However, we note that Derek Mallinson, Pinnacle's Head of Alternatives and designated LPAC representative, participated in the February 14, 2024 LPAC meeting and voted in favor of the restructuring. We conclude that Mallinson's affirmative vote at the LPAC meeting, made in his capacity as Pinnacle's designated representative, constitutes sufficient "affirmative written consent" under the Pinnacle side letter, particularly given that the LPAC consent was documented in the written minutes of the February 14 meeting and that Mallinson signed the LPAC consent resolution on behalf of Pinnacle. Notwithstanding this conclusion, we recommend that the GP obtain a brief written confirmation from Mallinson specifically acknowledging that his LPAC vote constitutes Pinnacle's consent under the side letter, to eliminate any ambiguity.
(c) Crestwood Endowment Partners. The Crestwood side letter requires prior written notice at least twenty (20) business days before the effectiveness of any material change in the management structure. The LPAC notification letter was sent on February 5, 2024, and the restructuring is expected to become effective on February 28, 2024—a period of approximately seventeen (17) business days. This falls slightly short of the twenty-business-day notice period. However, as with Ridgeline, Crestwood's representative, Annika Johansson, participated in the February 14, 2024 LPAC meeting and voted in favor of the restructuring. We believe that Johansson's participation and affirmative vote, together with the advance notice provided, constitute substantial compliance with the Crestwood side letter. The LP notification letter sent on March 5, 2024 provides additional post-effectiveness notice. We recommend monitoring for any concerns raised by Crestwood and, if necessary, providing a supplemental acknowledgment.
(d) Haverford Capital Partners. The Haverford side letter requires prior written notice and reserves the right for Haverford to object to any material change in the management structure within fifteen (15) business days of receipt of such notice. Unlike Ridgeline, Pinnacle, and Crestwood, Haverford is not a member of the LPAC and was therefore not a participant in the February 14, 2024 LPAC meeting. The general LP notification letter sent on March 5, 2024 provides notice of the restructuring but does not specifically address the Haverford side letter's objection-right provision. Separate written notice to Haverford Capital Partners must be sent, and we recommend that such notice be sent promptly—ideally as a supplemental letter accompanying or shortly following the March 5 LP notification—specifically identifying the side-letter management-structure-change provision, describing the restructuring in sufficient detail, and affording Haverford the full fifteen-business-day objection window required under its side letter.
The LPAC notification letters were sent on February 5, 2024. The LPAC met virtually on February 14, 2024, and unanimous consent was obtained from all four LPAC members: Ridgeline (Thomas Engström), Crestwood (Annika Johansson), Pinnacle (Derek Mallinson), and Graystone Family Office LLC (Catherine Whitfield). The LPAC consent resolution covers the restructuring in its entirety, including the formation of HoldCo and GP Intermediate, the amendments to the GP and ManCo LLC agreements, LPA Amendment No. 1, the carry reallocation, and the principal departures.
4. Status and Recommended Actions.  The following summarizes the status of compliance with the management structure change provisions and our recommended next steps:
(a) Ridgeline, Pinnacle, and Crestwood. We conclude that the LPAC consent obtained on February 14, 2024 satisfies the consent and notice requirements contained in the Ridgeline, Pinnacle, and Crestwood side letters, subject to the minor qualifications noted above regarding notice periods. The analysis of whether LPAC consent constitutes sufficient "affirmative consent" under the Pinnacle side letter is resolved in the affirmative, given that Derek Mallinson participated in the February 14, 2024 LPAC meeting in his capacity as Pinnacle's designated representative and voted in favor of the restructuring. Notwithstanding, we recommend that the GP obtain brief written confirmation from Mallinson to confirm this position.
(b) Haverford Capital Partners. A supplemental notice must be sent to Haverford Capital Partners specifically addressing the side-letter management-structure-change provision. We recommend that this supplemental notice be included as part of the LP notification letter sent on March 5, 2024, with a separate cover letter to Haverford referencing the side letter and affording the fifteen-business-day objection window. The GP should track the objection deadline and be prepared to engage with Haverford if an objection is raised.
Conclusion: Compliance with the management structure change provisions is achievable. The LPAC consent of February 14, 2024 and the LP notification letters of March 5, 2024 satisfy or will satisfy the notice and consent requirements for Ridgeline, Pinnacle, and Crestwood, subject to the recommended confirmatory steps. Separate action is required with respect to Haverford Capital Partners, as described above.
E. Co-Investment Priority Rights — 9 of 14 Side Letters
Nine (9) of the fourteen (14) side letters grant the relevant limited partner a priority right, right of first offer, or other preferential treatment with respect to co-investment opportunities alongside the Fund. These provisions vary in their specificity and scope, with some side letters providing a general "best efforts" commitment to offer co-investment opportunities and others establishing a tiered allocation framework under which the limited partner is entitled to participate in a specified percentage of co-investment deal flow.
Co-investment allocation has historically been managed by the GP in accordance with the Fund's existing Co-Investment Allocation Policy, which sets forth the procedures and priorities for offering co-investment opportunities to limited partners, affiliated funds, and GP/principal co-investors. The existing policy reflects the allocation percentages and eligibility of the five individual principals who currently hold direct interests in the GP and ManCo.
Impact of the Restructuring on Co-Investment Provisions. The restructuring necessitates an update to the Co-Investment Allocation Policy to reflect the following changes:
(a) the removal of David Kellner and Joanna Trask from co-investment eligibility, consistent with their separation from the Ardent platform;
(b) updated allocation percentages for the remaining HoldCo members with respect to any GP/principal co-investment allocations:
•  Marcus Aldridge: 42%
•  Priya Narayanan: 36%
•  Robert Hsiao: 14%
•  Elena Marchetti: 4%
•  Samuel Okonkwo: 4%
(c) no change to the limited partners' co-investment priority rights, which continue to be governed by the applicable side-letter provisions and the Co-Investment Allocation Policy.
A revised Co-Investment Allocation Policy has been prepared and is effective as of February 28, 2024. The revised policy reflects the updated principal-level allocations while preserving the existing limited partner co-investment priority framework in its entirety. The GP's obligations to offer co-investment opportunities to limited partners holding priority rights are unchanged.
Conclusion: No conflict exists between the restructuring and the limited partners' co-investment priority rights. The updated Co-Investment Allocation Policy has been prepared and is effective as of the restructuring date.
V. Side-Letter Compliance Matrix
The following table provides a summary of the fourteen (14) side letters currently in effect, organized by limited partner name or identifier, with an indication of the substantive provisions contained in each side letter and the current compliance status in connection with the restructuring.
All action items identified in the foregoing matrix are tracked against their respective deadlines in the Timeline of Compliance Actions set forth in Appendix B to this memorandum. The GP should designate a responsible individual within the investor relations team or the office of the General Counsel to monitor compliance with each deadline and to coordinate with Calderwood & Harkness LLP and Pemberton Hale LLP as necessary.
VI. Interaction with LPA Provisions
A. Section 9.4 — LPAC Consent
Section 9.4 of the LPA requires the prior consent of the LPAC for certain enumerated actions by the GP, including, among others, amendments to the LPA, transfers of the GP interest, changes in the identity or composition of the Key Persons, and other material actions affecting the governance or economic terms of the Fund. The restructuring implicates several of these enumerated categories, including the transfer of GP membership interests (Section 8.3) and the amendment of the LPA (LPA Amendment No. 1).
Consent was solicited from the LPAC by letter dated February 5, 2024. The solicitation letter described the restructuring in detail, including the formation of HoldCo and GP Intermediate, the amendments to the GP and ManCo LLC agreements, the terms of LPA Amendment No. 1, the carry reallocation among the remaining and next-generation principals, and the departures of Kellner and Trask. The solicitation letter was accompanied by copies of the execution versions of the principal restructuring documents and a summary memorandum prepared by Pemberton Hale LLP.
A virtual LPAC meeting was held on February 14, 2024. All four LPAC members participated:
•  Thomas Engström (Ridgeline Public Employees' Retirement System)
•  Annika Johansson (Crestwood Endowment Partners)
•  Derek Mallinson (Pinnacle Insurance Group)
•  Catherine Whitfield (Graystone Family Office LLC)
Unanimous consent was obtained from all four LPAC members. The LPAC consent resolution, signed by each member, covers the following:
(a) the formation of HoldCo and GP Intermediate as new Delaware limited liability companies;
(b) the execution of the Second Amended and Restated GP LLC Agreement and the Second Amended and Restated ManCo LLC Agreement;
(c) LPA Amendment No. 1, including conforming changes to the defined terms in Section 5.2 and other provisions;
(d) the reallocation of carried interest and ManCo Profit Share among the HoldCo members; and
(e) the departures of David Kellner and Joanna Trask, and the execution of their respective separation agreements.
The LPAC consent resolution is on file with Pemberton Hale LLP and has been provided to Calderwood & Harkness LLP for purposes of this analysis.
B. Section 8.3 — Transfer of GP Interest
Section 8.3 of the LPA governs transfers of the GP's interest in the Fund. Under Section 8.3, any transfer, assignment, pledge, or other disposition of the GP's interest (or any direct or indirect interest therein) is prohibited without the prior consent of the LPAC, except for certain permitted transfers to affiliates of the GP that satisfy specified conditions.
The restructuring involves the substitution of the five individual principals' direct membership interests in the GP with a single membership interest held by Ardent GP Intermediate LLC, which is itself wholly owned by HoldCo. This substitution constitutes a "transfer" of indirect interests in the GP within the meaning of Section 8.3, as the ultimate beneficial ownership of the GP is being restructured from five individual members to a single institutional member (GP Intermediate/HoldCo).
The LPAC consent obtained on February 14, 2024 expressly covers this transfer and satisfies the consent requirement under Section 8.3. In addition, the restructuring satisfies the conditions for a "permitted transfer" to an affiliate under Section 8.3(b), as HoldCo and GP Intermediate are affiliates of the GP and are controlled by the same individuals who currently control the GP (i.e., Aldridge and Narayanan).
As noted in Section IV.D above, the side-letter provisions in the Ridgeline, Pinnacle, Crestwood, and Haverford side letters impose requirements that go beyond Section 8.3's baseline consent requirement. These additional requirements have been addressed in the side-letter analysis above.
C. Section 9.7 — Removal of GP
Section 9.7 of the LPA sets forth the conditions under which the GP may be removed as the general partner of the Fund. Removal requires the affirmative vote of limited partners holding at least 75% of the aggregate capital commitments and may be effected only upon the occurrence of specified "cause" events or, in certain circumstances, without cause subject to a supermajority vote threshold.
No removal of the GP is contemplated in connection with the restructuring. The GP entity—Ardent Capital GP III LLC—continues as the sole general partner of the Fund. The restructuring changes only the upstream ownership of the GP (from five individual principals holding direct membership interests to GP Intermediate/HoldCo as the sole member). The identity of the GP, its rights and obligations under the LPA, and its authority to act on behalf of the Fund remain unchanged.
Accordingly, Section 9.7 is not implicated by the restructuring, and no action is required under this provision.
VII. Action Items and Recommendations
Based on the foregoing analysis, we have identified the following action items, organized by status:
Completed Items:
1.  LPAC Notification and Consent Solicitation. LPAC notification and consent solicitation letters were sent on February 5, 2024. Unanimous LPAC consent was obtained at the virtual LPAC meeting held on February 14, 2024, with all four LPAC members (Ridgeline, Crestwood, Pinnacle, and Graystone) voting in favor of the restructuring.
2.  LP Notification Letters. LP notification letters were sent to all forty-seven (47) limited partners on March 5, 2024, providing a general description of the restructuring and confirming that there is no change to the Fund's investment strategy, management fee rates (1.75% per annum during the investment period / 1.50% per annum during the post-investment period), or fund term (December 31, 2029, with two one-year extension options at the GP's discretion).
3.  Revised Co-Investment Allocation Policy. A revised Co-Investment Allocation Policy has been prepared and is effective as of February 28, 2024, reflecting the updated principal-level allocation percentages and the removal of Kellner and Trask from co-investment eligibility.
Action Required:
4.  Supplemental Notice to Haverford Capital Partners. A supplemental notice must be sent to Haverford Capital Partners specifically addressing the side-letter management-structure-change provision and affording Haverford the fifteen (15) business-day objection window required under its side letter. This notice should be sent as promptly as practicable, ideally as a supplement to the March 5 LP notification letter. The GP should track the objection deadline and be prepared to engage with Haverford in the event that an objection is raised.
5.  Contributing Person Departure Notifications. The GP must calendar and fulfill its notification obligations to the six limited partners with Contributing Person provisions regarding David Kellner's retirement (effective March 31, 2024). Under the terms of the applicable side letters, these notifications must be sent within fifteen (15) business days of the departure date—i.e., no later than approximately April 22, 2024. The form and content of the notifications should be coordinated with Pemberton Hale LLP.
6.  Monitoring for Suspension Requests. The GP must monitor whether any of the three limited partners holding investment period suspension rights elects to exercise such rights following receipt of the Contributing Person departure notification. In the event that a suspension request is received, the GP should promptly engage with the requesting limited partner and coordinate with Pemberton Hale LLP on response strategy, including the convening of an LPAC review meeting if required.
Recommended Items:
7.  Updated MFN Disclosure Summary. We recommend that the GP prepare an updated MFN disclosure summary for inclusion in the next periodic MFN distribution cycle. While the restructuring does not create any new MFN-eligible terms, a brief summary of the restructuring should be included to ensure transparency and to preempt any potential MFN-related inquiries from limited partners.
8.  Tax Reporting Coordination. We recommend coordination with Heathrow Whitman & Co. (Paul Devereux, CPA), the Fund's tax adviser, regarding any tax reporting implications arising from the side-letter fee provisions in connection with the restructuring. In particular, the reallocation of the ManCo Profit Share among HoldCo members may have implications for the allocation of management fee income and related expenses for federal and state tax reporting purposes, and Heathrow Whitman should be consulted to ensure that the Fund's Schedule K-1 reporting remains accurate and consistent with the restructured arrangements.
VIII. Conclusion
Based on our comprehensive review and analysis, we conclude that the restructuring of Ardent Capital Partners III LP's management company and economics realignment is achievable in compliance with all fourteen (14) side letters currently in effect, subject to the timely completion of the action items identified in Section VII above.
No Key Person Event is triggered under LPA Section 5.2 by the restructuring. Neither David Kellner nor Joanna Trask is a designated Key Person under Section 5.2, and both designated Key Persons—Marcus Aldridge and Priya Narayanan—will continue in their current roles as Co-Founders and Managing Partners of the Fund, devoting substantially all of their business time to the Fund's investment and management activities.
The primary compliance obligations arising from the restructuring relate to the following three areas:
(a) Contributing Person departure notifications for David Kellner's retirement under the six expanded key-person side letters, with a notification deadline of approximately April 22, 2024, and the attendant risk (assessed as low) that one or more of the three limited partners holding investment period suspension rights may exercise such rights;
(b) Management structure change notice and consent requirements under the four side letters held by Ridgeline Public Employees' Retirement System, Pinnacle Insurance Group, Crestwood Endowment Partners, and Haverford Capital Partners, which have been substantially satisfied through the LPAC consent process (for Ridgeline, Pinnacle, and Crestwood) and which require supplemental notice to Haverford; and
(c) Updating the Co-Investment Allocation Policy to reflect the post-restructuring principal-level allocations and the removal of departing principals from co-investment eligibility, which has been completed as of February 28, 2024.
Calderwood & Harkness LLP will continue to coordinate with Pemberton Hale LLP on ongoing side-letter compliance matters, including the preparation and delivery of Contributing Person departure notifications and the Haverford supplemental notice, and with Heathrow Whitman & Co. on related tax reporting matters. We remain available to advise the GP and the ManCo on any additional questions or issues that may arise in connection with the restructuring or the side-letter compliance process.
This memorandum is intended solely for the use of the addressees identified above and is subject to attorney-client privilege and the protections of the work product doctrine. It should not be distributed to, or relied upon by, any third party without the prior written consent of Calderwood & Harkness LLP.
Appendix A: Side-Letter Provision Summary Table
The following table provides a detailed provision-by-provision summary of each of the fourteen (14) side letters currently in effect in connection with the Fund. This table expands upon the compliance matrix set forth in Section V of this memorandum and is intended to serve as a comprehensive reference for the GP's ongoing side-letter compliance program.
Note: LP names for Side Letters SL-06 through SL-14 have been anonymized in this table. Full LP names and contact information are maintained in the Fund's confidential investor records and are available upon request from Pemberton Hale LLP.
Appendix B: Timeline of Compliance Actions
The following is a chronological summary of all completed and pending compliance actions related to the restructuring and side-letter obligations. The GP should use this timeline as a tracking tool and should update it as action items are completed or new obligations arise.
This memorandum has been prepared by Calderwood & Harkness LLP for the sole use of Marcus Aldridge and Priya Narayanan in their capacities as Co-Founders and Managing Partners of Ardent Capital Partners III LP. This memorandum constitutes attorney work product and is protected by the attorney-client privilege. It should not be disclosed to any third party, including limited partners or their representatives, without the prior written consent of Calderwood & Harkness LLP. The analysis and conclusions set forth herein are based on the documents and information provided to us as of the date hereof and are subject to change based on additional facts or developments.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Owen Fischer
Title: Lead Associate
By: ________
Name: Stephen Adler
Title: Working Associate
Reviewed and Approved:
By: ________
Name: Nicholas Stern
Title: Responsible Partner
Date: February 22, 2024
Principal | Post-Restructuring Carry Allocation
Marcus Aldridge | 42%
Priya Narayanan | 36%
Robert Hsiao | 14%
Elena Marchetti | 4%
Samuel Okonkwo | 4%
LP Identifier / Side-Letter Ref. | MFN | Contributing Person | Suspension Right | Fee discount / Rebate | Structure Change Consent | Co-Invest Priority | Compliance Status | Required Action / Deadline
Ridgeline Public Employees' Retirement System (SL-01) | Y | Y (Kellner) | Y | Y (15 bps reduction) | Y (30-day notice; consent not to be unreasonably withheld) | Y | Compliant (subject to confirmatory steps) | Confirm LPAC consent satisfies side-letter requirement; send Contributing Person notification by ~April 22, 2024
Pinnacle Insurance Group (SL-02) | Y | Y (Kellner) | Y | Y (25 bps reduction) | Y (notice + affirmative written consent) | Y | Compliant (subject to confirmatory steps) | Obtain written confirmation from Mallinson re: LPAC consent; send Contributing Person notification by ~April 22, 2024
Crestwood Endowment Partners (SL-03) | Y | Y (Kellner) | N | Y (20 bps reduction) | Y (20 business days' notice) | Y | Compliant (subject to confirmatory steps) | Send Contributing Person notification by ~April 22, 2024
Haverford Capital Partners (SL-04) | Y | N | N | Y (10 bps reduction) | Y (notice + 15 business day objection right) | Y | Action Required | Send supplemental notice with objection-right window; track 15 business day deadline
Graystone Family Office LLC (SL-05) | Y | Y (Kellner) | Y | N | N | Y | Compliant (notification pending) | Send Contributing Person notification by ~April 22, 2024
LP-06 | Y | Y (Kellner) | N | Y (15 bps reduction) | N | Y | Compliant (notification pending) | Send Contributing Person notification by ~April 22, 2024
LP-07 | Y | Y (Kellner) | N | Y (10 bps reduction) | N | N | Compliant (notification pending) | Send Contributing Person notification by ~April 22, 2024
LP-08 | Y | N | N | Y (15 bps reduction) | N | Y | Compliant | None
LP-09 | Y | N | N | N | N | Y | Compliant | None
LP-10 | Y | N | N | Y (20 bps reduction) | N | Y | Compliant | None
LP-11 | Y | N | N | N | N | N | Compliant | None
LP-12 | N | N | N | N | N | N | Compliant | None
LP-13 | N | N | N | N | N | Y | Compliant | None
LP-14 | N | N | N | N | N | N | Compliant | None
LP Name | Commitment ($M) | Side-Letter Date | MFN (Details) | Key-Person / Contributing Person (Details) | Suspension Right (Details) | Fee Provisions (Details) | Structure Change Consent (Details) | Co-Invest Priority (Details) | Notes
Ridgeline Public Employees' Retirement System | $225 | July 1, 2020 | Standard MFN; $200M threshold carve-out; annual disclosure upon request | Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification | Yes; 90-day suspension upon Contributing Person departure; LPAC review required | 15 bps reduction (1.60% IP / 1.35% post-IP); 100% fee offset | 30-day prior written notice; consent not to be unreasonably withheld | Tier 1 priority; minimum 10% of each co-invest opportunity >$25M | LPAC member; largest LP
Pinnacle Insurance Group | $175 | July 15, 2020 | Standard MFN; $200M threshold carve-out; semi-annual disclosure | Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification | Yes; 90-day suspension upon Contributing Person departure; LPAC review required | 25 bps reduction (1.50% IP / 1.25% post-IP); 100% fee offset; monitoring fee rebate | Prior written notice + affirmative written consent required | Tier 1 priority; right of first offer on co-invest opportunities >$50M | LPAC member; most stringent consent requirement
Crestwood Endowment Partners | $150 | August 1, 2020 | Standard MFN; $150M threshold carve-out; annual disclosure upon request | Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification | No | 20 bps reduction (1.55% IP / 1.30% post-IP); 80% fee offset | 20 business days' prior written notice | Tier 1 priority; minimum 5% of each co-invest opportunity | LPAC member
Haverford Capital Partners | $125 | August 15, 2020 | Standard MFN; $150M threshold carve-out; annual disclosure | Not applicable | No | 10 bps reduction (1.65% IP / 1.40% post-IP); 100% fee offset | Prior written notice; 15 bus. day objection right | Tier 2 priority; best efforts co-invest allocation | Not an LPAC member; supplemental notice required
Graystone Family Office LLC | $100 | September 1, 2020 | Standard MFN; no threshold carve-out; annual disclosure | Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification | Yes; 90-day suspension upon Contributing Person departure | Not applicable | Not applicable | Tier 2 priority; best efforts co-invest allocation | LPAC member
LP-06 | $85 | September 15, 2020 | Standard MFN; $100M threshold carve-out; annual disclosure | Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification | No | 15 bps reduction (1.60% IP / 1.35% post-IP); 80% fee offset | Not applicable | Tier 2 priority; best efforts co-invest allocation | —
LP-07 | $75 | October 1, 2020 | Standard MFN; $100M threshold carve-out; semi-annual disclosure | Key Persons: Aldridge, Narayanan; Contributing Person: Kellner; 15 bus. day notification | No | 10 bps reduction (1.65% IP / 1.40% post-IP); 80% fee offset | Not applicable | Not applicable | —
LP-08 | $70 | October 15, 2020 | Standard MFN; $100M threshold carve-out; annual disclosure | Not applicable | No | 15 bps reduction (1.60% IP / 1.35% post-IP); 100% fee offset | Not applicable | Tier 2 priority; best efforts co-invest allocation | —
LP-09 | $65 | November 1, 2020 | Standard MFN; no threshold carve-out; annual disclosure upon request | Not applicable | No | Not applicable | Not applicable | Tier 3 priority; co-invest allocation at GP discretion | —
LP-10 | $60 | November 15, 2020 | Standard MFN; $100M threshold carve-out; annual disclosure | Not applicable | No | 20 bps reduction (1.55% IP / 1.30% post-IP); 80% fee offset | Not applicable | Tier 2 priority; best efforts co-invest allocation | —
LP-11 | $50 | December 1, 2020 | Standard MFN; $100M threshold carve-out; annual disclosure upon request | Not applicable | No | Not applicable | Not applicable | Not applicable | —
LP-12 | $40 | December 15, 2020 | Not applicable | Not applicable | No | Not applicable | Not applicable | Not applicable | Tax-only side letter (ERISA / Volcker provisions)
LP-13 | $35 | January 15, 2021 | Not applicable | Not applicable | No | Not applicable | Not applicable | Tier 3 priority; co-invest allocation at GP discretion | Co-invest only side letter
LP-14 | $30 | February 1, 2021 | Not applicable | Not applicable | No | Not applicable | Not applicable | Not applicable | Tax-only side letter (state public records / FOIA provisions)
Date | Action | Status
February 5, 2024 | LPAC notification and consent solicitation letters sent to all four LPAC members (Ridgeline, Crestwood, Pinnacle, Graystone) | Completed
February 14, 2024 | Virtual LPAC meeting held; unanimous consent obtained from all four LPAC members for the restructuring, including formation of HoldCo and GP Intermediate, LPA Amendment No. 1, carry reallocation, and principal departures | Completed
February 22, 2024 | This memorandum finalized and delivered to Marcus Aldridge and Priya Narayanan | Completed
February 28, 2024 | All restructuring documents executed, including HoldCo LLC Agreement, Second Amended and Restated GP LLC Agreement, Second Amended and Restated ManCo LLC Agreement, LPA Amendment No. 1, Carried Interest Allocation Agreement, and Kellner and Trask separation agreements; revised Co-Investment Allocation Policy effective | Completed
March 1, 2024 | HoldCo (Ardent Capital Holdings LLC, DE File No. 7948231) and GP Intermediate (Ardent GP Intermediate LLC, DE File No. 7948237) formed with the Delaware Secretary of State | Completed
March 5, 2024 | LP notification letters sent to all 47 limited partners, including general description of restructuring and confirmation of no change to investment strategy, fee rates (1.75%/1.50%), or fund term (December 31, 2029, with two one-year extensions) | Completed
March 10, 2024 | SEC Form ADV amendment filed for Ardent Capital Management LLC (CRD #298417), reflecting updated ownership structure and changes to Schedule A and Schedule B | Scheduled
March 11, 2024 (recommended) | Supplemental notice sent to Haverford Capital Partners specifically addressing the side-letter management-structure-change provision and affording the 15-business-day objection window | Action Required
~March 29, 2024 | Expiration of Haverford 15-business-day objection window (assuming supplemental notice sent by March 11, 2024) | Pending
March 31, 2024 | David Kellner retirement effective | Scheduled
April 15, 2024 | Joanna Trask departure effective | Scheduled
~April 22, 2024 | Deadline for Contributing Person departure notifications to six LPs with Contributing Person provisions regarding Kellner's retirement (15 business days following March 31, 2024 effective date) | Action Required
Ongoing | Monitor for Haverford objection following delivery of supplemental notice | Pending
Ongoing | Monitor for investment period suspension requests from the three LPs with suspension rights (Ridgeline, Pinnacle, Graystone) following delivery of Contributing Person departure notifications | Pending
Ongoing | Coordinate with Pemberton Hale LLP on response strategy in the event that any suspension request is received | Pending
Next periodic cycle (est. Q2/Q3 2024) | Prepare and distribute updated MFN disclosure summary to the eleven LPs with MFN provisions, including reference to the restructuring | Recommended
Next periodic cycle (est. Q2 2024) | Coordinate with Heathrow Whitman & Co. (Paul Devereux, CPA) regarding tax reporting implications arising from side-letter fee provisions in connection with the restructuring | Recommended

MEMORANDUM

CALDERWOOD & HARKNESS LLP

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