Deerfield Management Company LP

ITEM 5 – FEES AND COMPENSATION

A.      Fees

          The Firm does not have a standardized fee schedule for the discretionary investment management
services it provides the Funds. The Firm receives a management fee (calculated as a percentage of , as
applicable pursuant to the relevant Fund governing documents, a Fund’s net asset value (“NAV”), the cost
basis of Fund assets, funded commitments and/or unfunded commitments). The relevant General Partner
and/or The Deerfield Partnership Foundation (“    Deerfield Foundation”), as applicable,receives performance-
based compensation (based on the realized and unrealized profits earned by a Fund or based on distributions
made by a Fund in excess of the Fund’s investors’ funded capital commitmentsor such other threshold as
set forth in the relevant Fund Memorandum). The Firm and/or the applicable General Partnerhas waived or
reduced and may waive or reduce management fees and/or performance-based compensation due with
respect to certain investors, including investors who are present or former partners or employees of the
Firm or its affiliates and their respective family members and related entities, operating partners and others
the Firm determines provide or provided value to the Firm as well as certain investors in Deerfield Private
Design Fund V, L.P . The use of fund -level borrowing, including subscription line facilities or other credit
facilities, may increase or extend the base on which management fees are calculated (for example, where
management fees are calculated with reference to invested capital, cost or other metrics that reflect a
borrowing component). The fees applicable to each Fund are disclosed in the Memorandum for such Fund.

         Management fees generally range from 50%    0. to 1.75% annually, and will generally be reduced dollar
for dollar, but not below zero on a going forward basis, by directors’ fees, consulting fees, advisory fees,
transaction fees, commitment fees, broken deal fees or other similar fees received by the Firm from
investments made by a Fund (excluding any fees or other such remuneration received by any discovery
specialist (generally employees or consultants of the Firm, 3DC or its affiliates who principally support the
discovery activities and other operations of one or more portfolio companies and research projects,
including persons who are scientific specialists, persons who may serve on a scientific advisory board, persons
who are regulatory specialists, manufacturing specialists, intellectual property speci alists, chief medical
officers, chief science officers, recruiting specialists, clinical trial specialists, scientific collaboration directors
and engineers (“Discovery Specialists ”)), operating partners (including interim operating partners),
entrepreneurs-in-residence or other similar consultants to or employees of the Firm or its affiliates). . In
addition, the following fees generally do not offset management fees: reimbursement of the Firm’s out              -of-
pocket expenses relating to a Fund or portfolio company; rent payments for access to facilities owned or
leased by theFirm or its affiliates; payments to the Firm or its affiliatesfor the use of services made available
through or at the Cure, including catering anddining services, physical security, building use and service      , data
analytics, programming, event services and space , conferences, lectures and concierge services, video
production, graphic design and communications services,and membership and residency programs;fees for
the use of or access to equipment or utilities; fees in respect of goods, facilities and intellectual property
provided by the Firm or its affiliates; fees in respect of goo ds, facilities, intellectual property and services
provided indirectly through third parties; and fees in respect ofDiscovery Specialists.

        Performance-based compensation is generallyequal to 20% of a Fund’s profits, with the exception
of Deerfield Healthcare Innovations Fund, L.P. , which is generally 25% of distributions after 300% of
contributed capital with respect to eachportfolio investment has been distributed to investorsuntil 600% of
contributed capital with respect to such portfolio investment has been distributed to investors , and
thereafter 15% of distributions with respect to such portfolio investment . In Deerfield Partners, L.P.,
performance-based compensation is subject to a “ modified high water mark” in which the performance -
based compensation is calculated at one-half the percentage otherwise applicable (that is, 10% instead of
20%) until the sum of accrued net profits for all years subsequent to the previous high water mark (excluding
any year in which there is a net loss)quals
                                      e     200% of the sum of all accrued net losses for all years subsequent
to the prior high water mark (excluding any year in which there is a net profit). In Deerfield Healthcare
Innovations Fund, L.P., the performance-based compensation is allocated to the Deerfield Foundation.
Performance-based compensation received by the Firm is charged in conformity with Rule 205      -3 under the
Investment Advisers Act of 1940, as amended (the Advisers
                                                     “       Act”).

         The governing documents of certain Funds utilizing the Private Design Strategy or Healthcare
Innovations Strategy provide that such Fund’s management fees will be calculated and charged on a basis
that generally is not tied to the Fund’s then-current net asset value.The applicable governing documentsof
certain Funds utilizing the Private Design Strategy or Healthcare Innovations Strategy provide that before
and including a certain date (the “Fee Reduction Date”), management fees generally will be charged based
on a formula tied to the amount of an investor’s capital commitment to the relevant Fund. After the Fee
...

ITEM 7 – TYPES OF CLIENTS

        The Firm’s only clients are pooled investment vehicles, the Funds, and no investment advice is
provided directly to individuals or to investors in the Funds. Conditions for investing in each Fund, such as
the minimum investment amount, are stated in the respective offering documents, which note that the
General Partner of each Fund has discretion to reduce or waive the minimum investment amounts.

         Generally, investors participating in the Funds are required to meet certain suitability and net worth
qualifications, such as being (i) anaccredited
                                     “         investor” within the meaning of Rule 501 of Regulation D under
the Securities Act of 1933, as amended,and (ii) a “qualified purchaser” as defined in Section 2(a)(51) of the
Investment Company Act of 1940, as amended (“ Investment Company Act ”). Certain “knowledgeable
employees” within the meaning of Rule 3c-5 of the Investment Company Actalso participate in the Funds.

         The Firm, without notice to or consent of investors, has entered into, and may in the future enter
into, side letters with certain investors in the Funds (“Side Letters”). Side Letters may grant preferential
liquidity, transparency, reporting, fee or other terms. Fund investors that are c urrent and former Firm-

related personnel and affiliatesof the Firm have preferential liquidity rightsto the extent theGeneral Partner
of the Fund waives thenotice or other requirements for a redemptionspecified in the applicable governing
Fund documents in connection withsuch redemption, which occurs regularly, and, as disclosed above in Item
6, Unrestricted Withdrawals are permitted for certain investors funding capital commitments to certain
Deerfield Funds. Investors who or which redeem their investments ahead of other investorscould adversely
impact the remaining investors in the Fund. Similarly, where certain investors in a Fund have preferential
transparency rights, those investors would have information before other investors, which could benefit
those investors withsuch preferential transparency rights.