Item 5: Fees and Compensation
The Single Asset Fund
In connection with the Single Asset Fund that Endurance currently manages, Endurance was paid a
one-time fee by the investors in the Single Asset Fund upon the acquisition of the Portfolio Company
equal to a percentage of such investor’s capital contribution to the Single Asset Fund (the “Initial
Fee”). In addition, Endurance is entitled to receive an annual fee from the Portfolio Company in an
amount not to exceed an agreed upon cap that scales up in the first three years of the Single Asset
Fund’s investment in the Portfolio Company (the “Monitoring Fee”). An affiliate of Endurance is also
entitled to receive a carried interest allocation from the Single Asset Fund after certain performance
hurdles have been met, as further described in the Single Asset Fund’s Governing Documents. Such
carried interest represents a portion of the Single Asset Fund’s net investment profits. The fees and
carried interest are generally subject to waiver or reduction by the general partner with respect to
some or all of the Single Asset Fund’s investors in the general partner’s sole discretion, as further
described in the Single Asset Fund’s Governing Documents.
In general, the Single Asset Fund bears all costs and expenses incurred in connection with the
organization of the Fund, subject to a cap, as set forth in the Fund’s Governing Documents. In addition,
the Single Asset Fund is responsible for all expenses relating to its own operations, including:
• all out-of-pocket costs of the administration of the Fund, including administrative, tax and
accounting, audit, legal, depositary, safekeeping and other professional fees and expenses,
costs of holding any meetings of the investors in the Fund, fees, costs and expenses incurred
in connection with administering side letters entered into with investor, including the
distribution and implementation of any applicable elections pursuant to “most-favored
nation” or similar clauses in side letters, costs associated with reporting and providing
information to existing and prospective investors on Fund-related matters, including the
preparation and dispatch to investors of distributions, financial reports and notices required
pursuant to the Fund Governing Documents and other Fund-related reporting obligations,
and expenses associated with the maintenance of books and records of the Fund;
• all appraisal and valuation expenses;
• all taxes (except to the extent treated as incurred by the investors), governmental charges,
registrations, fees and duties payable by the Fund, including those expenses incurred in
connection with the registration, qualification or exemption of the Fund under any applicable
laws, and all expenses incurred in connection with any investigation or review of the Fund or
any settlement entered into by the Fund;
• all unreimbursed fees, costs and expenses incurred in connection with the collection of
amounts due to the Fund from any person;
• all fees, costs and expenses incurred in connection with any restructuring or amendment to
the Fund Governing Documents;
• all fees, costs and expenses (and damages) related to regulation, litigation, government
inquiries, investigations or proceedings, in each case related to the Fund or its investments;
• all fees, costs and expenses related to complying with FATCA and similar regulations and
administrative requirements in other jurisdictions;
• all expenses related to regulations and administrative requirements and compliance with
and filings under applicable laws, rules and regulations;
• all liabilities for indemnity or contribution to any person, whether payable under this
Agreement or otherwise and whether payable in connection with any litigation involving the
Fund or otherwise;
• all expenses incurred in connection with any third party administrative proceedings or audits
with respect to taxes;
• all expenses incurred in connection with the dissolution and liquidation of the Fund;
• all expenses incurred on account of taxes, fees or other governmental charges of the Fund;
• all reasonable fees, costs and other out-of-pocket expenses and liabilities directly related to
the Fund’s investments or prospective investments (including expenses incurred in relation
to prospective investments prior to the Fund’s initial closing date) and additional
investments, including legal, accounting, consulting, and other professional costs (including
any compensation paid to the members of the Endurance advisory board and executive
network, subject to an annual cap, as set for the in the Fund’s Governing Documents);
• all principal, interest, fees, costs, expenses and other amounts payable in respect of or in
connection with borrowings, financings, guaranties or derivative transactions;
• all fees, costs and expenses that are classified as extraordinary expenses under U.S. generally
accepted accounting principles; and
• the costs of acquiring and maintaining insurance policies.
The Single Asset Fund’s Governing Documents have provisions that allow the Fund to borrow money
for investment and other purposes. Such borrowings may be made prior to capital being called from
the Fund’s investors. This mechanism may defer investor capital calls and provide a form of leverage
that can have the effect of amplifying the Single Asset Fund’s reported net internal rate of return
(IRR), particularly in the early years of the Fund’s investment cycle. Such borrowings can also
accelerate the date upon which the Fund’s preferred return will be achieved for purposes of
determining when the Fund’s general partner (or affiliates which earn carried interest) is entitled to
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