Alpine Management Services III LLC

Item 5      Fees and Compensation

Management Fees

In general, Alpine Investors charges annual management fees for the provision of investment
advisory services to its clients (generally referred to herein as “management fees”). The fees are
generally either calculated on a percentage of capital invested, committed capital, or unreturned
capital, depending on the stage of the Fund, and for flagship Funds generally range from 1.50% to
2.00% of that capital. For certain continuation funds, management fees generally range from
0.50% to 2.00%. Such fees are payable quarterly or semiannually in arrears, or quarterly in
advance, from the Alpine Funds to Alpine Investors. The fee payment process and rates are
approved at the formation of each Alpine Fund and established by the terms of the applicable

partnership agreements. The fees are non-negotiable once the limited partnership agreements are
executed. As a general matter, management fees will be payable during term extensions unless
otherwise agreed with investors.

As is generally the case in private equity funds, the Governing Documents typically provide that
a Fund’s management fees will be calculated and charged on a basis that generally is not tied to
the Fund’s then-current net asset value. As further specified in the Governing Documents, from
the effective date of the relevant Fund until a date specified in the Governing Documents (the
“Stepdown Date”), management fees generally will be charged based on a formula tied to the
amount of the relevant Fund’s aggregate capital commitments. Further, after the Stepdown Date,
management fees generally will be charged and calculated based on a formula tied to the amount
of investment contributions (including, where applicable, a Fund borrowing component (including
interest expenses) and the amount of any capitalized Other Fees (as defined below) or expenses,
including transaction fees, expenses and costs related to the Operations Group) made by the
relevant Fund relating to the Fund’s aggregate investment(s) in any portfolio company that have
not been disposed of or permanently written off for U.S. federal income tax purposes (such
investments, “Impaired Value Investments”). Due to differences in the criteria set forth in their
respective Governing Documents, in the event where more than one Fund participates in an
investment, there is the possibility that an investment will become an Impaired Value Investment
for purposes of one Fund’s Governing Documents but not those of one or more other Funds. In
addition, certain Funds potentially will charge management fees from inception based on
unrecouped bridge financing contributions and investment contributions, reduced only for
Impaired Value Investments.

Under the Governing Documents, where the fair market value of an investment exceeds the total
amount of investment contributions relating to such investment, post-Stepdown Date management
fees will not be calculated based upon such appreciated value and will instead continue to be
calculated based on the amount of such investment contributions. Conversely, the Governing
Documents do not require management fees to be reduced or refunded following the occurrence
of a writedown, decrease (including a significant decrease) in fair value or other event not
constituting a complete realization, such as a partial sale or disposition, reorganization,
recapitalization (including recapitalizations involving dividends), roll-over investment in
connection with a sale or a dividend distribution, except in the case of investments meeting the
relevant Impaired Value Investment standard under the Governing Documents.

As a result, and as is generally the case for private equity funds, the amount of management fees
generally will not correspond with fluctuations in the net asset value of individual investments or
of a Fund, including following the relevant investment period, and will not be reduced in
connection with any write downs (whether temporary or permanent), except in the case of Impaired
Value Investments. Except where the Governing Documents expressly provide to the contrary,
management fees will not be reduced (in whole or in part) in the case of partial sales or
dispositions, distributions (e.g., those resulting from a dividend recapitalization) or
reorganizations, restructurings, roll-over investments, extraordinary dividends or similar
transactions, in each case in circumstances that do not result in the complete disposition of the
relevant Fund’s interest therein, and even in cases where the value of the Fund’s investment or the
Fund’s ownership percentage in such investment has been reduced (including substantially
reduced) as a result of such transaction.

In many circumstances, the post-Stepdown Date management fees base will include capitalized
transaction-specific fees and expenses of unrealized investments, including certain fees (such as
Other Fees), Operations Group costs and fees and expenses paid to Service Providers, Alpine
Investors or its affiliates. Further, management fees generally will not be reimbursed or refunded
under the Governing Documents in the event of realizations, dispositions or partial write-downs
or write-offs that occur partway through the relevant calculation period.

The Governing Documents set forth the full list of terms under which management fees will be
reduced, offset or otherwise be limited, and consequently investors should expect to bear the full
specified management fee rate in the Governing Documents until they are reduced in the
circumstances and on the date(s) specified therein.

Alpine Investors reserves the right to negotiate alternative fee structures for future Funds.

Other Fees

In addition, to the extent specified in a Fund’s Governing Documents, Alpine Investors and its
affiliates receive certain customary fees and other amounts such as break-up fees, financial
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Item 7      Types of Clients

Alpine Investors provides investment advisory services solely to the Alpine Funds, and references
throughout this brochure to Alpine Investors’ duties and practices on behalf of its clients and/or
investors should be construed accordingly. See Item 4 – “Advisory Business” for typical types of
investors in the Alpine Funds. In addition, investors often include, directly or indirectly, principals
or other personnel of Alpine Investors and its affiliates and members of their families, Operations
Group members or other Service Providers retained by Alpine Investors or an Alpine Fund, as well
as executives of portfolio companies. The Alpine Funds are permitted to include alternative
investment vehicles established in order to permit one or more investors to participate in one or
more particular investment opportunities in a manner desirable for tax, regulatory or other reasons.
Alternative investment vehicle sponsors generally have limited discretion to invest the assets of
these vehicles independent of limitations or other procedures set forth in the organizational
documents of such vehicles and the Governing Documents of the related Alpine Fund.

The most recent Alpine Funds generally have a minimum investment amount of $10 million or
more for third-party investors, and Alpine Fund interests are offered and sold to accredited
investors that are generally also qualified clients and qualified purchasers (or qualified
knowledgeable Alpine Investors personnel). Alpine Investors generally is permitted to waive such
minimum investment amount.