Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the potential economic impact on Pinnacle Venture Fund II LP (the "Fund") if subsequent limited partners exercise most favored nation ("MFN") election rights to adopt reduced management fee rates negotiated by the Fund's anchor investors in connection with the Fund's first closing. As discussed in greater detail below, the scope of MFN-eligible fee con

II. Background — Anchor LP Commitments and Fee Concessions A. Summary of Anchor LP Terms The Fund's three anchor limited partners and their respective commitment amounts, negotiated management fee rates, and resulting annual fee contributions are summarized in the table below: Each anchor LP's commitment and fee terms were negotiated in connection with the Fund's first closing process and are set forth in individual

III. MFN Framework — Eligibility and Excluded Provisions A. MFN Eligibility Under the MFN provisions set forth in the LPA and reflected in each anchor side letter, the right to make MFN elections is available to limited partners that have committed at least $25,000,000 to the Fund (the "MFN Threshold"). Limited partners whose commitments fall below the MFN Threshold are not eligible to participate in the MFN election

1. Provisions granted to satisfy specific legal, regulatory, or tax requirements of the limited partner to which such provisions were originally granted (e.g., FOIA and public records carve-outs for governmental plans such as CPERS; representations and acknowledgments regarding the inapplicability of ERISA to a particular LP's investment).

2. Advisory committee seats, including the LPAC seat granted to NEP.

3. Portfolio company board observer rights.

4. Any other term or provision that the GP reasonably determines is specific to the legal, regulatory, or tax status of the limited partner that originally received such term or provision and is not applicable to the electing limited partner. Fee Concessions Are MFN-Eligible. Critically, management fee concessions are not listed among the Excluded Provisions and are therefore MFN-eligible. This is the primary source

IV. Scenario Analysis — Economic Impact of MFN Fee Elections A. Modeling Assumptions The following assumptions apply across all three scenarios modeled in this Section IV: • Target fund size: $600,000,000. • Anchor LP commitments: $165,000,000 (as set forth in Section II.A). • Subsequent LP commitments needed to reach target: $435,000,000 ($600,000,000 minus $165,000,000). • Standard management fee: 2.00% per annum o

V. Recommendations — Mitigating MFN Economic Exposure Based on the analysis set forth above, we recommend the following structural measures to mitigate the GP's MFN economic exposure. These recommendations should be discussed with Nicholas Stern and, where appropriate, presented to Rajesh Mehta and Claire Dubois for commercial input. A. Structuring Excluded Provisions Broadly

1. CPERS Fee Concession as an Excluded Provision The most impactful single step the GP can take to reduce MFN fee exposure is to characterize the CPERS management fee reduction (from 2.00% to 1.75%) as a provision "granted to satisfy specific legal, regulatory, or tax requirements" of CPERS, or as a provision "specific to the legal, regulatory, or tax status" of CPERS, thereby rendering it an Excluded Provision that

2. Northstar Fee Concession The NEP management fee reduction (from 2.00% to 1.85%) is tied to NEP's status as a university-affiliated endowment vehicle. The regulatory nexus for exclusion is less obvious than for CPERS: while university endowments are typically organized as tax-exempt entities under IRC § 501(c)(3) and may be subject to certain governance requirements imposed by their university affiliates, they do n

3. Non-Fee Provisions With respect to non-fee provisions in the anchor side letters, we recommend that the GP take the following steps to maximize the scope of Excluded Provisions: (a) Ensure that each anchor side letter includes a clear statement identifying which provisions are granted due to the specific legal, regulatory, or tax status of the relevant LP. (b) Draft broad Excluded Provisions language in the MFN pr

VI. Impact on Carried Interest and GP Economics Management fee reductions resulting from anchor concessions or MFN elections affect the GP's operating revenue — the annual management fee income that the GP uses to fund its operations, including compensation, office expenses, travel, and other overhead — but do not directly alter the Fund's carried interest waterfall. The Fund's carried interest structure, as set fort

VII. Delaware Precedent and Market Context The Fund's MFN framework operates within the well-established Delaware fund side letter practice, which generally treats management fee concessions as MFN-eligible unless specifically excluded. Delaware limited partnership law affords broad freedom of contract, and the scope of MFN election rights is governed by the specific language of the LPA and the relevant side letters,

VIII. Conclusion and Next Steps Summary of Exposure Based on the analysis set forth in this memorandum, the GP's MFN fee election exposure ranges from approximately $195,750 per year (Scenario 2, moderate) to $543,750 per year (Scenario 1, aggressive) in incremental annual management fee reductions beyond anchor discounts, translating to $978,750 to $2,718,750 in cumulative incremental fee reductions over the five-ye

1. Excluded Provision Structuring. Discuss with Nicholas Stern the approach to characterizing the CPERS management fee reduction as an Excluded Provision, and present the recommended implementation steps (including specific side letter language and MFN procedures letter drafting) to Rajesh Mehta and Claire Dubois for commercial input. This discussion should occur before the CPERS side letter is finalized, and ideally

2. Commitment-Based Fee Tiers. Evaluate the feasibility of converting fee concessions from ad hoc side letter provisions to LPA-level commitment-based tiers before the First Close on January 15, 2026. This approach requires amendment of the LPA's fee provisions and must be coordinated with Rajesh Mehta and Claire Dubois, as it affects the Fund's marketing and fundraising strategy. If the tier approach is adopted, the

3. MFN Clause Drafting. Draft MFN clauses in each anchor side letter with broad Excluded Provision language and, if commercially acceptable, commitment-matching conditions requiring electing LPs to meet the same minimum commitment level as the LP from whose side letter the provision is being elected. Circulate proposed MFN clause language to Owen Fischer and Nicholas Stern for review.

4. Fund Administrator Coordination. Coordinate with Patricia Lam at Meridian Fund Services LLC to prepare fee modeling scenarios based on the three scenarios analyzed in this memorandum, updated as actual commitments crystallize during the fundraise. Meridian should be prepared to calculate and implement retroactive fee adjustments following the close of the MFN election period.

5. Updated Analysis. Prepare an updated version of this analysis once the subsequent LP pipeline crystallizes during the side letter negotiation period, which we anticipate will occur between approximately October 20 and December 20, 2025. The updated analysis should incorporate actual and expected subsequent LP commitment amounts, MFN eligibility assessments for each prospective subsequent LP, and revised fee projec

6. Co-Investment Fee/Carry Waiver. Flag the CPERS no-management-fee, no-carried-interest co-investment provision as an additional source of MFN-eligible economic exposure that warrants further analysis. If significant co-investment activity is anticipated during the Fund's investment period, the economic impact of MFN elections on co-investment economics could be material and should be quantified in a supplemental me