Rho Capital Partners Inc

Item	5	        	       Fees	and	Compensation

Management fees (“Management Fees”) paid by our VC Funds to Rho or a Rho affiliate may
differ from Fund to Fund, but typically are an amount equal to 2% of each Fund investor’s
capital commitment. This Management Fee is paid during each VC Fund’s investment period or
for a specified period of years. After the investment period or a specific period of years, each
VC Fund typically pays a Management Fee based on each Fund investor’s pro rata share of the
lesser of 2% of committed capital or 2% of the fair market value of the Fund’s assets, with a
floor of 1.5% of committed capital.

Management Fees paid by our PE Funds to Rho or a Rho affiliate may differ from Fund to Fund,
but typically are an amount equal to 2% of each Fund investor’s capital commitment. This
Management Fee is paid during each PE Fund’s investment period or for a specified period of
years. After the investment period or a specific period of years, each PE Fund typically pays a
Management Fee based on each Fund investor’s pro rata share of 2% of the cost basis of
portfolio securities then held by the Fund, less the cost basis of portfolio securities written off
by the PE Fund.

Management Fees paid by our Funds-of-Funds will vary with respect to each investor in the
Fund, ranging from 0.75% to 1% based on the size of the capital commitment made by the Fund
investor. This Management Fee is paid during a Fund-of-Funds’ investment period or for a
specific period of years. Beyond the investment period or a specified number of years, a Fund-
of-Funds’ Management Fee will generally decline based on return of capital contributions and
the fair market value of the Fund’s investments.

Management Fees are typically payable quarterly in advance and are deducted from each Fund.
If a Fund’s term is extended beyond its original term, Rho may elect to reduce the Management
Fee to zero during the extension period.

Performance-based fees (“Performance Fees”) paid by our Funds generally are paid to Rho or a
Rho affiliate when distributions are made to the investors and are referred to as a “Carried
Interest Percentage.” The Carried Interest Percentage for our VC Funds and PE Funds typically
equals 20% of the Fund’s cumulative net profits, but is subject to certain conditions and may be
greater or less than 20%. For our Funds-of-Funds, the Carried Interest Percentage is typically
7.5% of the Fund’s cumulative net profits, but is subject to certain conditions. The Carried
Interest Percentage and the timing of its distribution may vary from Fund to Fund and is
described more fully in each Fund’s organizational agreement. Each Fund’s organizational
agreement typically contains one or more “clawback” provisions providing the Fund the
opportunity to recoup Performance Fee distributions that exceed the applicable Carried

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Interest Percentage. The mechanics of the clawback may vary from Fund to Fund and are more
fully described in each Fund’s organizational agreement. We have in the past, and may in the
future, establish “affiliate” funds consisting of capital from employees of Rho or friends and
family of Rho employees. Any such affiliate funds would have reduced or, in some cases, no
Management Fees and/or Performance Fees.

In addition to Management Fees and Performance Fees, each Fund pays and, as a result, Fund
investors bear, other types of fees and expenses as specified in the applicable organizational
documents. Typically, a Fund is responsible for all costs and expenses in connection with its
operation and investments (other than the costs and expenses that will be the responsibility of
Rho, which are typically salaries and benefits of our personnel and the cost of maintaining Rho’s
place of business). These costs and expenses may include, but are not limited to, (i) Fund
organization and related costs; (ii) legal, accounting, audit, custodial, consulting and other
professional fees; (iii) banking, brokerage, broken-deal, registration, qualification, finders,
depositary and similar fees or commissions; (iv) transfer, capital and other taxes, duties and
costs incurred in acquiring, holding, selling or otherwise disposing of Fund assets, as well as out-
of-pocket travel expenses incurred by the General Partner or its affiliates in investigating,
evaluating or monitoring investments or investment opportunities; (v) insurance premiums,
indemnifications, costs of litigation and other extraordinary expenses; (vi) costs of financial
statements and other reports; and (vii) costs of meetings of the partners or advisory
committees of the Fund. To the extent possible, third-party legal expenses incurred in
connection with consummated transactions are borne by the respective portfolio companies of
the Funds. Typically the terms of our Funds provide that any fees paid to placement agents will
reduce the amount of management fees paid by the Funds over a period of time, such that the
cost will ultimately be borne by the management company. Funds incur brokerage and other
transaction costs. Brokerage is described in more detail below in response to Item 12.

Management Fees are pro-rated for partial payment periods (based on the number of days in
the partial period relative to the number of days in the total period). Where Management Fees
are paid in advance with respect to a Fund, the terms of such Funds typically do not
contemplate repayments of fees to the extent that Rho’s services terminate prior to the end of
the relevant payment period. The Management Fees and/or Performance Fees may be waived
or reduced at the discretion of Rho for certain limited partners, including with respect to Rho
employees.

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Item	7	        	       Types	of	Clients

Rho provides investment advice to the Funds, which are pooled investment vehicles. The Funds
are not registered or required to be registered under the Investment Company Act of 1940 and
the offering of interests in the Funds is exempt from registration under the Securities Act of
1933.

Some of our Funds invest in portfolio companies in parallel with one another based on the
aggregate capital commitments made to each Fund or pre-set allocation percentages at the
time the Funds were established.

Most of the capital invested in the Funds is attributable to U.S. and non-U.S. institutional
investors, including public and private pension plans, funds-of-funds, sovereign wealth funds,
banks, insurance companies, family offices, endowments and charitable foundations.

Each Fund generally has a specified minimum investment as stated in its offering document
(e.g., $1 million). Rho or a Rho affiliate may permit investment of a lesser amount with respect
to any investor.

The Funds may enter into “side letters” or similar agreements with certain limited partners
pursuant to which a Fund’s general partner grants to such limited partners specific rights,
benefits or privileges that are not available to limited partners generally, including access to co-
investment opportunities.

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