Contract analysis

I. EXECUTIVE SUMMARY The purpose of this memorandum is to present and evaluate the principal fund structuring alternatives available for Cobalt Life Sciences Opportunities Fund I, LP ("CLSO Fund I" or the "Fund"), the inaugural opportunistic life-sciences fund to be sponsored by Cobalt Ventures LP ("Cobalt" or the "Sponsor"). This memorandum analyzes the structural options in light of the Fund's anticipated investmen

II. BACKGROUND AND CONTEXT A. Cobalt Ventures LP — Sponsor Overview Cobalt Ventures LP was founded in 2018 by Dr. Marcus Yeung and Priya Dasgupta as a dedicated life-sciences investment platform focused on venture-stage and growth-stage biotechnology companies. Over the past eight years, the Sponsor has established a track record of disciplined capital deployment and strong returns across two prior vintage vehicles.

1. Ironwood Public Employees' Retirement System ("Ironwood PERS") Ironwood PERS is a state government pension fund organized under the laws of the State of Oregon, with approximately $62 billion in assets under management. The anticipated commitment from Ironwood PERS is $100,000,000. The primary contact is Helen Tsao, Director of Private Markets, whose offices are located at 900 Capitol Way NE, Suite 400, Salem, Ore

2. Northgate Endowment Management LLC ("Northgate") Northgate Endowment Management LLC is the investment management arm of a major university endowment with approximately $8.5 billion in assets under management. Northgate is organized as a Delaware limited liability company. The anticipated commitment is $50,000,000. The primary contact is David Park, Senior Portfolio Manager – Life Sciences Allocation, whose offices

3. Pinnacle Insurance Group, Inc. ("Pinnacle") Pinnacle Insurance Group, Inc. is a life and annuity insurance company organized under the laws of the State of Connecticut, with a general account of approximately $28 billion. The anticipated commitment is $75,000,000. The primary contact is Rachel Stein, Senior Vice President – Alternative Investments, whose offices are located at 500 Asylum Avenue, Hartford, Connecti

4. Aggregate Anticipated Anchor Commitments and Remaining Capital to Raise The aggregate anticipated commitments from the three identified anchor investors total $225,000,000 ($100 million from Ironwood PERS, $50 million from Northgate, and $75 million from Pinnacle). The General Partner's commitment will be a minimum of two percent (2%) of aggregate commitments, which at the target fund size of $750 million equals $

5. Placement Agent Cobalt has engaged sagebrush Capital Partners LLC (Jonathan Mercer, Managing Director) as the exclusive global placement agent for the Fund. Sagebrush is a registered broker-dealer with the Securities and Exchange Commission (CRD No. 298714). The placement agent engagement is described in further detail in Section X.E.

6. Structural Implications of Investor Base Diversity The diversity of the anticipated investor base — encompassing a state pension fund, a university endowment, a life and annuity insurance company, and additional institutional investors yet to be identified by sagebrush — drives the need for significant structural flexibility in the Fund's architecture. Each investor category presents distinct tax, regulatory, and

III. KEY FUND ECONOMIC TERMS (SUMMARY) The following table summarizes the core economic and governance terms that inform the structural decisions analyzed in this memorandum. These terms are preliminary and will be set forth in detail in the LPA, the first draft of which is targeted for circulation to the principals on May 31, 2026. The terms presented here reflect our discussions with the Cobalt principals to date a

IV. FUND STRUCTURE ALTERNATIVES ANALYSIS This Section IV presents our analysis of six structural alternatives for the Fund. For each alternative, we describe the structure, evaluate its advantages and disadvantages in the context of the Fund's specific circumstances, and provide our recommendation. We note that these alternatives are not mutually exclusive — our recommended approach combines elements of several alter

1. Description. Under this alternative, the Fund would be organized as a single Delaware limited partnership: Cobalt Life Sciences Opportunities Fund I, LP. The Fund would be formed under the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§17-101 et seq. (the "DRULPA"), and would be governed by a limited partnership agreement entered into by the General Partner and all limited partners. Cobalt Life Scie

2. Advantages. The single-tier Delaware limited partnership offers several significant advantages for the Fund: Simplicity and Transparency. A single fund entity reduces administrative complexity, audit costs, and investor confusion. All limited partners participate in a common pool of investments and are subject to a single waterfall calculation, which simplifies reporting, valuation, and distribution mechanics. Ins

3. Disadvantages and Limitations The single-tier Delaware LP structure has certain limitations that should be acknowledged: Tax-Exempt and Non-U.S. Investor Considerations. A single-tier LP does not inherently address UBTI or ECI concerns for tax-exempt or non-U.S. investors. Income generated by the Fund flows through to all limited partners on a pro rata basis, including categories of income (such as debt-financed i

4. Recommendation. The single-tier Delaware limited partnership is our recommended primary fund vehicle. Based on the Fund's target investor base (which is predominantly U.S. institutional), the Fund's target size ($750 million), the Fund's investment strategy (clinical-stage therapeutics, medical devices, and platform biotechnology), and prevailing market practice for life-sciences opportunistic funds, the single-ti

1. Description. Under a dual master-feeder structure, investment activity would be conducted through a master fund — organized either as a Delaware limited partnership or as an offshore entity (such as a Cayman Islands exempted limited partnership) — that receives capital through one or more feeder funds. The typical architecture involves two feeder vehicles: (a) A domestic feeder — organized as a Delaware limited pa

2. Advantages. The master-feeder structure offers certain advantages: Clean Investor Segregation. The master-feeder architecture cleanly separates U.S. taxable, U.S. tax-exempt, and non-U.S. investor constituencies into distinct legal entities, each of which can be structured to optimize the tax treatment of its particular investor class. Offshore blocker Functionality. An offshore feeder organized as an entity class

3. Disadvantages. Despite its structural elegance, the master-feeder architecture presents significant disadvantages for the Fund: Incremental Formation and Ongoing Costs. A full master-feeder requires the formation and maintenance of multiple entities across multiple jurisdictions. Offshore legal counsel (Cayman Islands or other offshore jurisdiction) must be engaged for the formation and ongoing compliance of the o

4. Recommendation. The dual master-feeder structure is not recommended at this time. The structure's incremental costs and complexity are not justified by the Fund's current investor pipeline, which is predominantly U.S. domestic institutional. If sagebrush's marketing efforts identify more than $50 million in non-U.S. investor demand, a parallel fund (Option 3, discussed below) may provide a more cost-effective and

1. Description. Under this alternative, a separate limited partnership or offshore vehicle (the "Parallel Fund") would be formed to invest alongside the main Fund on a pro rata basis in all investments. The Parallel Fund would be structured to address specific tax or regulatory needs of non-U.S. investors or certain U.S. tax-exempt investors — for example, by functioning as a UBTI blocker at the vehicle level, by avo

2. Advantages. Preservation of Core Structure. The parallel fund approach preserves the single-tier Delaware LP as the core fund vehicle while accommodating the specific needs of a subset of investors. This avoids the need to restructure the main Fund or impose the costs and complexity of a full master-feeder on the entire investor base. Cost Efficiency. For a limited number of non-U.S. or tax-exempt investors (as co

3. Disadvantages. Additional Entity Formation and Administration. The Parallel Fund requires the formation of a separate legal entity (or multiple entities, if both a domestic and an offshore parallel vehicle are needed), a separate limited partnership agreement (or other governing document), separate K-1 reporting (or its equivalent), and a separate audit engagement. These costs, while lower than those of a full mas

4. Recommendation. We provisionally recommend the parallel fund as a contingent structure. Specifically, we recommend that the main Fund's LPA include parallel fund enabling provisions that would authorize the General Partner to form a Parallel Fund without requiring LP consent. The Parallel Fund itself would be formed only if non-U.S. investor commitments reach or exceed $50 million — the threshold that would also t

1. Description. Under this alternative, the LPA would authorize the General Partner to form one or more alternative investment vehicles ("AIVs") — special-purpose entities that participate in specific investments alongside the Fund to accommodate particular tax, legal, regulatory, or operational requirements of certain limited partners. AIVs are distinguished from parallel funds in that they are not standing investme

2. Common Uses AIVs serve range purposes in the context of a diversified institutional fund. The most common use cases for CLSO Fund I include: (a) Isolating UBTI- or ECI-Generating Investments. If a particular portfolio company investment generates income that would constitute UBTI for tax-exempt investors or ECI for non-U.S. investors, the General Partner may form an AIV to hold that investment on behalf of tax-sen

3. Key Terms and Guardrails To protect limited partners while preserving the General Partner's flexibility to form AIVs, the LPA should include the following key terms and guardrails: • AIVs must invest on substantially the same terms as the main Fund (i.e., the same entry price, governance rights, and economic terms for the underlying investment). • AIV economics — including management fee, carried interest, preferr

4. Recommendation. AIV provisions are strongly recommended as a standard feature of the LPA. AIV mechanics provide the Fund with maximum structural flexibility at minimal upfront cost — no entities are formed, and no expenses are incurred, until a specific need arises. The AIV authority is market-standard for funds of this type and size and is essential given the diversity of the anticipated investor base, which incl

1. Description. Under this alternative, Cobalt Life Sciences Opportunities Fund I (Blocker), Inc. would be organized as a Delaware C-corporation to serve as an interposition entity — or "Blocker" — between certain categories of investors and the Fund (or specific portfolio investments). The blocker entity would be formed as a subsidiary or affiliate of the Fund, and tax-sensitive investors would invest through the bl

2. Investor-Specific Analysis Pinnacle Insurance Group. As a life and annuity insurer, Pinnacle may prefer or require blocker entity participation for investments that generate debt-financed income, certain operating company income, or income that creates adverse reserve or risk-based capital treatment under Connecticut insurance regulations (including the Connecticut Insurance Code and applicable National Associatio

3. Tax Considerations (Summary) The use of a blocker corporation involves inherent tax trade-offs that must be carefully evaluated for each investor: • Double Taxation. Income earned by the blocker corporation is subject to corporate-level federal income tax (currently at a rate of 21% under IRC §11). When the blocker distributes its after-tax earnings to its investors as dividends, those dividends may be subject to

4. Recommendation. We recommend that the blocker corporation be structured as an available entity to be formed if and when needed based on investor demand and specific deal characteristics. The LPA should include blocker enabling provisions that authorize the General Partner to form Cobalt Life Sciences Opportunities Fund I (Blocker), Inc. (or similar blocker entities) without LP consent, subject to the same good-fai

1. Description. Under this alternative, one or more standalone feeder vehicles — organized as domestic limited partnerships, domestic LLCs, or offshore entities — would be formed to aggregate investors of a particular type and invest into the main Fund as a single limited partner. Feeder funds are distinguished from the master-feeder architecture described in Option 2 in that feeders here are supplementary vehicles t

2. Use Cases In the context of CLSO Fund I, potential use cases for feeder funds include: (a) Aggregation of Smaller Institutional LPs or Family Offices. If the Fund's minimum commitment threshold (to be specified in the LPA and PPM) excludes smaller investors who are otherwise desirable, a feeder fund could aggregate those investors into a single vehicle that meets the minimum commitment. This approach is sometimes

3. Recommendation. Feeder funds are not recommended at this time for initial fund formation. The identified anchor investors are individually of sufficient size to invest directly in the main Fund, and the fundraising strategy does not currently contemplate the aggregation of smaller commitments through a feeder vehicle. If sagebrush's marketing efforts identify a group of smaller institutional investors or family of

V. RECOMMENDED ENTITY HIERARCHY AND ORGANIZATIONAL CHART Based on our analysis in Section IV, we recommend the following entity hierarchy for CLSO Fund I. The entities described below fall into three categories: (A) core entities to be formed as part of the initial fund formation process; (B) existing entities that play a role in the fund structure; and (C) contingent entities to be formed only if and when specific c

1. Cobalt Life Sciences Opportunities Fund I, LP Entity type: Delaware limited partnership, formed under the DRULPA. Role: The Fund — the primary investment vehicle for the Fund's investment program. All portfolio investments will be made by or through the Fund (directly or through AIVs, the blocker corporation, or the parallel fund, as applicable). General Partner: Cobalt Life Sciences GP I, LLC. Limited Partners: I

2. Cobalt Life Sciences GP I, LLC Entity type: Delaware limited liability company, formed under the Delaware Limited Liability Company Act, 6 Del. C. §§18-101 et seq. Role: The General Partner of the Fund. Responsible for all fund management and investment decisions, subject to the terms of the LPA. Holds the carried interest entitlement. Managing Members: Dr. Marcus Yeung and Priya Dasgupta. Carried Interest Allocat

3. Cobalt Life Sciences Management I, LLC Entity type: Delaware limited liability company. Role: The Management Company. Employs the Fund's investment professionals (Dr. Yeung, Ms. Dasgupta, Mr. Whitford, and future hires). Receives the management fee from the Fund. Bears organizational expenses in excess of the $1,500,000 cap. Implements management fee offset mechanics (100% offset for placement fees paid to sagebru

4. Cobalt Life Sciences Opportunities Fund I (Blocker), Inc. Entity type: Delaware C-corporation, formed under the Delaware General Corporation Law, 8 Del. C. §§101 et seq. To be formed if and when needed based on confirmed investor participation requiring blocker access. Role: The blocker Corporation. Interposes between tax-sensitive investors (Pinnacle, and potentially Northgate) and the Fund or specific portfolio

VI. GENERAL PARTNER AND MANAGEMENT COMPANY — STRUCTURAL CONSIDERATIONS A. Separation of GP and Management Company We recommend that the General Partner entity (CLSO GP I, LLC) and the Management Company entity (CLSO Management I, LLC) be organized as separate legal entities, each formed as a Delaware limited liability company. The sepa