5AM Venture Management LLC

Item 5 – Fees and Compensation

Investors in the Funds are generally “accredited investors” as that term is defined in
Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and/or
“qualified clients” as defined in the Advisers Act or “qualified purchasers” or “knowledgeable
employees,” each as defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”). Investors and prospective investors should refer to the
applicable Governing Documents for a detailed description of the fees associated with
investments in the applicable Fund.
A.     Forms of Compensation and Fee Schedule
The fees and compensation payable to 5AM are negotiable and vary among the Funds. The
fees and compensation described herein are generally subject to waiver or reduction by 5AM
in its sole discretion, both voluntarily and on a negotiated basis with selected investors via a
distinct series of partnership interests (where provided by the applicable Governing
Documents), side letters or other similar arrangements, which may not be required to be
disclosed to other investors in a Fund. To date, 5AM has not waived or reduced fees and
compensation for any unaffiliated investor in the Funds other than as explicitly provided by
the applicable Governing Documents but may do so in the future. The range of compensation
is generally as follows:
       1.      Management Fees
5AM is generally entitled to a management fee (the “Management Fee”) of: (i) for the Venture
Funds, up to 2.5% per annum based on committed capital, and, after a specified anniversary
of the Fund’s initial closing, generally based on the lesser of (a) committed capital and (b)
cost basis of the Fund’s investments and (ii) for the Opportunities Funds, up to 1.5% per
annum, in each case, as set forth in the applicable Governing Documents. For the closed-end
Opportunities Fund, the Management Fee is generally calculated based on the Fund’s called

                                                                                     Part 2A of ADV:
                                                                5AM Venture Management, LLC Brochure

capital, and, after a specified anniversary of the Fund’s initial closing, generally based on the
lesser of (1) committed capital and (2) cost basis of the Fund’s investments. For the open-end
Opportunities Fund, the Management Fee is generally based on the investor’s capital account
balance as of the beginning of the month (before any accrued incentive allocation), as set
forth and calculated in accordance with the applicable Governing Documents and is not
subject to a step-down or reduction over time.

5AM Personnel 1 may receive compensation (e.g., salary, performance bonus, stock options,
warrants, common stock) for services provided by such 5AM Personnel to portfolio
companies. Such compensation creates a conflict of interest because it provides an incentive
for 5AM Personnel to recommend or support investments in portfolio companies that
provide such compensation. Except where required by applicable Governing Documents,
such compensation is generally not offset against the Management Fee payable by the
applicable Fund.

         2.       Performance-based Fees
For the Venture Funds and the closed-end Opportunities Funds, each Fund’s General Partner
generally is entitled to receive carried interest equal to up to 20% of the net profit of the
applicable Fund, as described more fully in each Fund’s Governing Documents (the “Carried
Interest Distribution”). The Carried Interest Distribution is generally subject to a clawback at
the end of life of a Fund if the General Partner has received excess cumulative distributions.
For the open-end Opportunities Fund, except as otherwise provided by the applicable
Governing Documents, the Fund’s General Partner generally is entitled to receive a
performance-based incentive allocation of up to 20% of net profits (including both realized
and unrealized gains and losses) otherwise allocable to each investor (the “Incentive
Allocation”), as described more fully in the Fund’s Governing Documents. The Incentive
Allocation is allocated in arrears on an annual basis (and on withdrawals with respect to the
amount withdrawn) and is applied only to the portion of profits that exceed the cumulative
losses previously allocated to or incurred by the investor’s capital account. Performance-
based compensation is only charged to investors who meet the definition of a “qualified
client” under Rule 205-3 of the Advisers Act.

B.       Payment of Fees
The Firm deducts the Management Fee directly from each Fund's assets. The Management
Fee for the Venture Funds and the closed-end Opportunities Funds is payable in advance at
the beginning of each fiscal quarter and is prorated for a partial quarter. The Management
Fee for the open-end Opportunities Fund is payable in advance at the beginning of each
month and prorated for a partial month.

  5AM Personnel is defined as 5AM supervised persons (officers, partners, directors, or other persons occupying
a similar status or performing similar functions), employees, consultants, or any other person who provides
investment advice on 5AM’s behalf and is subject to 5AM’s supervision or control.

                                                                             Part 2A of ADV:
                                                        5AM Venture Management, LLC Brochure

5AM deducts the Carried Interest Distribution or the Incentive Allocation, as applicable,
directly from the respective Fund’s assets and allocates the applicable amount from each
investor’s capital account. Investors should refer to the applicable Governing Documents for
the calculation and timing of the Carried Interest Distributions or the Incentive Allocation, as
applicable, which is at the discretion of the respective General Partner.
C.       Fund Expenses and Other Fees
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Item 7 – Types of Clients

5AM provides investment advice to the Funds. The Funds are private investment vehicles
that are exempt from registration under the Investment Company Act of 1940, as amended.
The Funds’ investors are limited to individuals and entities that meet certain suitability
criteria, including “accredited investors,” “qualified clients” and “qualified purchasers” as set
forth under the United States federal securities laws.