Fees and Compensation
Management Fees
External investors in Aragon SPV II, those who were not previously investors in any Aragon-related funds, are
charged a management fee as outlined in the relevant offering documents or operating agreements and are
based upon contributed capital as determined by Aragon SPV II’s administrator and confirmed by Aragon
and/or the General Partner.
Aragon’s separately managed account clients are not subject to management fees but are subject to expense
reimbursements. Expense reimbursements for Aragon’s separately managed account Clients are negotiated
with the client and documented in the relevant investment management agreement.
Incentive Fees/Allocations
As noted below in Item 6, Aragon SPV II is subject to a Carried Interest Amount (as defined in the governing
document) based upon net profits or on distributable cash flows as defined in the respective underlying
agreements. Carried Interest Amounts are calculated as of the end of each fiscal year and reallocated directly
from Aragon SPV II as appropriate. Carried Interest Amounts may be waived at the sole discretion of Aragon.
Aragon is eligible to receive an Incentive Allocation on net profits from separately managed account Clients.
Incentive allocations for Aragon’s separately managed account Clients are negotiated with the client and
documented in the relevant investment management agreement. Incentive allocations for separately managed
accounts may be based upon a percentage of net profits.
Expenses
Aragon and the Clients generally bear their own expenses. Expenses above and beyond the Management Fee
and Incentive Allocation discussed above are allocated on a case-by-case basis in accordance with the
Governing Documents. Additional expenses the Clients will incur generally include but are not limited to
operating expenses and organizational expenses, which include:
(i) all investment-related costs and expenses (i.e., expenses that, in the Firm’s sole discretion, are related
to the investment of the Clients’ assets, whether or not such investments are consummated), including
commissions and charges, interest on margin accounts and other indebtedness, expenses relating to short sales,
clearing and settlement charges, option premiums and custodial and service fees, research-related expenses
(including research-related travel expenses), expenses relating to consultants, attorneys, brokers or other
professionals or advisors who provide research, advice or due diligence services with regard to investments;
(ii) fees and expenses related to portfolio exposure and performance management systems, risk
management services and software related to trade reconciliation, treasury, margin, financial and counterparty
management, risk monitoring, performance reporting, valuation quotation services (e.g., Bloomberg terminals,
historical and live financial data and other similar services and data feeds) and trade order management systems
(including systems that facilitate trade compliance, commission management, stock locates and transaction cost
analysis, and third-party service providers used for implementation, custom reporting, updates, consultations,
support, maintenance, monitoring and data extracts);
(iii) the Clients’ legal, accounting (including fees associated with accounting software and systems), tax
preparation and other tax-related expenses (including preparation and mailing costs of financial statements, tax
returns and other reports to investors), auditing, consulting and other professional expenses;
(iv) third-party administration costs, fees and expenses (including any costs, fees and expenses related
to investor communications, relations, reporting or other investor materials, tax preparation and related
reporting, performance information, data extraction and other types of reporting and any audit or accounting
services provided by a third-party administrator);
(v) all fees and charges of custodians, clearing agencies and banks;
(vi) compliance and reporting expenses and expenses attributable to regulatory filings that are made
with respect to the Clients or assets of the Clients’ (including Section 13, Section 16, Form D, Form PF,
FATCA, anti-money laundering compliance, state security filings, general regulatory compliance and non-U.S.
position reporting filings, if applicable, and non-U.S. filings, if any);
(vii) the Fund’s pro-rata share of Fund-related insurance costs (including the pro-rata portion of
director’s and officer’s insurance, errors and omissions insurance, fidelity insurance and other similar policies
covering the General Partner and/or the Investment Manager);
(viii) any taxes (including but not limited to any withholding taxes, transfer taxes, stamp duties and
other governmental or self-regulatory agency-related charges or duties);
(ix) all costs and expenses incurred in attempting to protect and enhance the value of a Fund investment
(including any fees and expenses associated with any pending or threatened litigation, audit, investigation,
administrative or other proceeding, as well as any settlement costs);
(x) any fees and expenses related to a Fund’s liquidation, if applicable;
(xi) fees paid to proxy and securities class action advisory firms;
(xii) expenses relating to the offer and sale of limited partnership interests in the Fund (“Interests”), as
applicable, and withdrawals/redemptions and transfers thereof;
(xiii) other reasonable expenses related to the purchase, sale, preservation or transmittal of the Clients’
assets; and
(xiv) any extraordinary expenses (e.g., indemnification expenses).
Aragon SPV II does not have its own separate employees or offices, and do not reimburse Aragon for salaries
or office rent. The Firm is responsible for its overhead expenses and other similar expenses, except as provided
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