Healthcare Royalty Management LLC

ITEM 5. FEES AND COMPENSATION

As provided under the governing documents and management agreements of the Clients, the Adviser or its
affiliates will receive from the Clients both a quarterly management fee at a fixed rate and a performance
fee or carried interest, as described further below. Although the Adviser has entered into agreements with
the Clients providing for the below fees or carried interest, the Adviser may negotiate alternative fees,
performance fees or carried interest amounts on a client-by-client basis with other funds or separate account
clients in the future. Different client facts and circumstances will be considered in determining such fees or
carried interest amounts, including the client’s investment strategy, assets under management, account
composition, reporting requirements, economies of scale, if any, and any other factors the Adviser deems
relevant. All such fees will be set forth in agreements with such clients.

Management Fee

For Clients, a management fee (the “Management Fee”) is, in most instances, charged as of the beginning
of each calendar quarter as an aggregate fixed fee, which may vary as set forth in the applicable Fund
organizational documents, calculated and payable quarterly in advance, as of the first business day of the
next calendar quarter. In some instances, the Management Fee is payable quarterly, in arrears. In another
instance, the Management Fee is called a personnel and operating expense and is charged in arrears based
on a percentage of cash received over the quarter. The Management Fee is debited against the investors’
accounts and paid to the Adviser for its services pursuant to the terms of the investment management
agreement. The Management Fee is not generally negotiable, although the Funds may charge different rates
depending on the size of investment and, if consistent with the applicable Fund’s organizational documents,
the Adviser may from time to time enter into letter agreements or other similar agreements (collectively,
“Side Letters”) with one or more investors which provide such investors with additional and/or different
rights (including, without limitation, with respect to Management Fees) than provided in the governing
documents of the Clients. The Adviser may, if consistent with the applicable Fund’s organizational
documents, reduce or waive the Management Fee with respect to certain investors or in respect of certain
Managed Accounts. The Adviser generally waives the Management Fee for investments by certain
affiliated entities, certain employees and certain strategic investors. Waived or reduced Management Fees
may not be subject to offsets or reductions described herein. Due to waived or reduced Management Fees
and/or the timing or receipt of compensation subject to offset, Fund investors may not get the full benefit
of reductions or offsets. Management Fees are typically charged by the master fund with respect to funds
structured in a master-feeder structure and therefore are borne indirectly by investors of feeder funds. The
Management Fee is generally prorated for periods where services were provided for less than a full calendar
quarter, in accordance with the applicable investment management agreement and organizational
documents.

In addition, the Adviser and its affiliates may perform a broad range of advisory and other services,
including administrative services related to securitizations and other similar financings (collectively,
“Related Services”) for, and receive fees from, actual or prospective portfolio investments (“Portfolio
Investments”) or the entities into which such Portfolio Investments are made (“Portfolio Companies”) or
other investment vehicles of Clients and other affiliates of Clients as well as in relation to actual or
prospective Portfolio Investment counterparties (each, a “Counterparty”). These fees may be substantial.
Although these fees are in addition to the Management Fees, the Adviser will in most circumstances reduce
the amount of Management Fees paid by the applicable Fund in connection with the receipt of such fees
(subject to exceptions for certain securitization and administrative fees). The amount and manner of such
reduction is set forth in the investment management agreements and/or organizational documents of the
applicable Fund. Any such reduction of a Fund’s Management Fees will be limited to the extent of such
Fund’s proportionate interest in any such Portfolio Company. Unless otherwise agreed with a Client’s
investors, Management Fees will continue to be payable during any term extension.

Fees, discounts or commissions earned by broker-dealer affiliates of the Adviser (or affiliates providing
similar services with respect to loans) conducting financial services, loan origination, structuring,
underwriting, placement or other similar business as a broker, dealer, distributor, syndicator, arranger or
originator of securities or loans do not reduce the Management Fee. These affiliated broker-dealer fees
include but are not limited to offering, placement, syndication, underwriting, solicitation or similar or
related fees in connection with activities for a Fund such as an initial public offering of securities and the
distribution of debt or equity securities of a Portfolio Company, or similar activities with respect to loans.

Certain investors in the Client that are employees, former employees, business associates and other “friends
and family” of the Adviser, its affiliates or their personnel (including any related entity established by any
of the foregoing, such as trusts, charitable programs, endowments or related programs, family investment
vehicles and other estate planning vehicles) (collectively, “Adviser Investors”) will not typically pay
Management Fees or carried interest in connection with their investment in a Client. Furthermore, the
Adviser may from time to time in the future establish certain investment vehicles through which Adviser
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ITEM 7. TYPES OF CLIENTS

The Adviser currently provides investment advisory services to its Clients. Investment advice is provided
directly to our Clients. In respect of the Funds, action on such advice is subject to the discretion and
oversight of the general partner of each applicable Fund. The Adviser does not provide advice individually
to the investors in the Funds.

Interests in the Funds are offered pursuant to applicable exemptions from registration under the 1940 Act
and the Securities Act. Investors in the Funds may include high net worth individuals, trusts, estates,
charitable organizations, pension plans, corporations, limited partnerships, limited liability companies, and
similar entities.

The minimum initial investment in each Fund is $10 million, subject to lesser amounts being accepted at
the discretion of the relevant Fund’s general partner.

The Adviser may in the future provide advisory services to other funds and separately managed accounts
for high net worth individuals, trusts, estates, charitable organizations, pension plans, corporations, limited
partnerships, limited liability companies, and similar entities.