Hercules Adviser LLC

Item 5            Fees and Compensation

Investors in the Funds should review Client Governing Documents for information on fees and compensation payable
by investors in any Fund. The Adviser does not have a set fee schedule. Fees are negotiated with each Client or
established in connection with the Client’s formation (or, at the outset of a fund formation, fees may be subject to
negotiation with prospective investors). Fees can include asset-based management fees, fixed fees, administrative
fees and such other fees which may be negotiated with the Client. Such fees may be affected by the amount of assets
under management, the Client’s investment objective and the manner in which funds are invested. Hercules Capital
may waive, modify or calculate differently the management fee and/or performance paid by any Client or investor in a
Fund on a case-by-case basis. Asset-based management fees can create conflicts of interest when the Adviser controls
the timing and the amount of leverage, if any, used by a Client, since the use of leverage provides additional capital to
such Client enabling such Client to increase the amount of loans it acquires, thus increasing the base against which
the Adviser’s management fees are calculated with a corresponding increase to the amount of management fees the
Adviser is entitled to receive. This opportunity to earn higher fees could give the Adviser an incentive to allocate
investment opportunities based on a Client’s use of leverage. The Adviser seeks to mitigate this conflict through an
allocation policy (as described in Item 11) that prohibits the Adviser from making allocation decisions favoring clients
that generate higher fees (including management fees or performance compensation).

In addition, the Adviser may, from time to time, incur certain Client-related administrative and operational expenses
that could be subject to reimbursement by Clients. Any such reimbursement will be made pursuant to Client Governing
Documents.

Hercules Capital underwrites, originates, and invests in loans to companies that are active across a variety of
technology-related industry sub-sectors or are characterized by products or services that require advanced
technologies, including, but not limited to, computer software and hardware, networking systems, semiconductors,
semiconductor capital equipment, information technology infrastructure or services, consumer and business services,
telecommunications, telecommunications equipment and media. Within the life sciences sub-sector, Hercules Capital

generally focuses on medical devices, bio-pharmaceutical, drug discovery and development, drug delivery, health care
services and information systems companies. Hercules Capital refers to such companies in the technology and life
sciences sub-sectors described above as “technology-related” companies. Certain loans that are appropriate for
Hercules Capital are also appropriate for Clients, and Clients invest in the same loans in which Hercules Capital invests.
Hercules Capital and Clients receive compensation from related loan obligors (i.e., each borrower or guarantor of a
loan) or otherwise receive fees or compensation in connection with such loans. Fees and compensation currently
retained by Hercules Capital include, but are not limited to, commitment, origination, facility, agent, due diligence and/or
other fees for services provided by Hercules Capital in connection with such loans. Such fees or compensation received
by Hercules Capital are not offset by the Adviser against management or incentive fees that are paid by any Clients to
the Adviser for investment management services. In addition, loan obligors are obligated to reimburse Hercules Capital
and/or Clients for current expenses that are reimbursable pursuant to the loan agreements.

Hercules Capital’s receipt of fees for services and reimbursement of expenses with respect to loans that are acquired
by Clients represents a conflict of interest to the extent that Hercules Capital has an economic incentive to underwrite,
originate and invest, and recommend or cause Clients to invest in, such loans. The Adviser seeks to mitigate this
conflict through an investment allocation policy (as described in Item 11).

Hercules Capital bears its own operating, general, and administrative and overhead costs and expenses.

No Hercules Capital employee is compensated for the sale of securities or other investment products.

Other Expense Information

Client Expenses

In addition to the fees described above, each Client pays or reimburses the Adviser for certain fees and expenses.
These fees and expenses vary from Client to Client and are specifically set-out in each Client’s Governing Documents.
A Client generally bears organizational and offering expenses attributable to the applicable Client. In addition, a Client
generally bears out-of-pocket expenses charged by third parties that are attributable to the activities of the Client, which
may include but are not limited to (i) expenses incurred in connection with the evaluation, acquisition, financing, holding,
monitoring, hedging or disposition of investments (including investments that are not consummated), including legal,
accounting, consulting, and professional fees; (ii) fees and expenses incurred in connection with the carrying or
management of investments, including administrative, custodial, trustee, recordkeeping, and other similar fees; (iii)
expenses incurred in connection with the Client’s financial statements, tax returns, Schedules K-1, consents and other
communications with investors; (iv) attorneys’ and accountants’ fees and disbursements (including any additional third-
party tax preparation expenses); (v) taxes and other governmental charges levied against the Client (other than
investor-related taxes); (vi) fees and expenses incurred in connection with any tax audit by any taxing authority,
...

Item 7             Types of Clients

The Adviser, as of the date of this brochure, provides investment management services to the Funds, and may in the
future provide investment services to other Clients which may include from time to time, without limitation, (i) privately
placed pooled investment vehicles; (ii) separately managed accounts for institutional investors; and/or (iii) registered
investment companies or business development companies (“Regulated Funds”), each of which are expected to
primarily invest in debt securities.

Interests in the Funds are offered to investors pursuant to applicable exemptions from registration under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and the 1940 Act. Investors in the Funds are generally
institutional investors.

The Adviser and/or the General Partner have entered into and in the future may enter into additional separate
agreements, commonly referred to as “side letters,” with certain investors in a Fund, which have the effect of
establishing preferential rights under, altering, or supplementing the terms of, Client Governing Documents of the Fund
with respect to such investor, in a manner more favorable to such investor than those applicable to other investors in
the Fund. Such rights or terms pursuant to such side letters include a most favored nation provision and may in the
future include, for example (and without limitation), fee arrangements or hurdle rates with respect to an investor,
preferential access to, and terms of, co-investment opportunities, reporting obligations, waiver of confidentiality
obligations, consent to certain transfers or withdrawals by an investor, or rights or terms necessary in light of particular
legal, regulatory, or tax requirements or concerns of an investor.

The minimum investment amount, if any and as applicable, and other criteria for investments in Clients are set forth in
the relevant Client Governing Documents.