Alterra IOS Manager LLC

Item 5: Fees and Compensation
The Funds will pay an annual Management Fee, payable quarterly in advance. The Management Fee rate
will depend on the timing and size of each Limited Partner commitment (“Commitments”). Beginning on
the initial closing date of the Funds and ending on the earlier of (x) last day of the investment period of
the Funds, (y) the date the unfunded Commitments have been reduced to zero and (z) the date a
management fee begins to accrue on a successor fund to the Funds (such earlier date, the “Management
Fee Adjustment Date”), the annual Management Fee will equal 1.5% multiplied by aggregate
Commitments. From the Management Fee Adjustment Date through the liquidation of the Funds, the
base amount on which the Management Fee is calculated will be equal to the aggregate equity invested
in unsold assets, less amounts attributed to any asset that has been fully and permanently written-off
with no reasonable basis for recovery or the amount of any asset that has been written-down if such
write-down has lasted for two consecutive calendar quarters without reversal, calculated as of the last
business day of the prior calendar quarter.

The Management Fee will be apportioned between the Funds by their General Partners. In addition, the
Management Fee is subject to discounts for certain Limited Partners as set forth in their subscription
agreements or side letters. The Management Fees will be expenses of the Funds and may be paid out of
the Funds’ cash flow or the General Partners may issue capital calls to the Partners to pay the
Management Fees directly.

All Management Fees will be calculated on a Partner-by-Partner basis. The Management Fee will be
prorated for periods that are less than full calendar quarters. The Management Fee rate set forth above
shall be the rate charged to each Limited Partner unless the General Partners elect to reduce the
Management Fee rate for such Limited Partner as provided in such Limited Partner’s subscription
agreement or side letter.

In addition, a Fund may permit friends and other family members to make commitments to a Fund
(collectively, with members of the General Partner Funding Group, the “General Partner Group”). All such
Commitments will be funded on the same terms, and will have the same rights to distributions and
allocations as that of the Limited Partners, except that (x) up to 50% of the General Partner’s (or an

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affiliate’s) Commitment may be deemed to have been contributed in exchange for a corresponding waiver
of the Management Fees if so elected by the General Partner in its sole discretion, (y) the General Partner,
in its sole discretion, may reduce or eliminate the management fees and carried interest with respect to
the General Partner Group’s commitments and (z) the General Partner Group may elect to make its
required commitment to a Fund as determined in their sole discretion. All such commitments will be made
either directly by the General Partner or as Limited Partners by one or more members of the General
Partner Group.

The Funds may from time to time pay the General Partners, Alterra IOS or their affiliates for certain
services in return for fees in lieu of hiring third parties (“Affiliated Fees”). Any Affiliated Fees will not offset
the Management Fee or otherwise be shared with the Funds and will be retained solely by the person or
entity receiving the fee. If the General Partners, Alterra IOS or their affiliates provide services to the Funds
other than those described below or at rates higher than those provided below, the Funds will disclose
the terms and conditions of agreements to the limited partner advisory committee of the Funds (the
“LPAC”) and may compensate such affiliated party for performing such services in accordance with the
rates provided in such agreement if the LPAC has approved such rates or services. The Affiliated Fees may
include:

    •   “Property Management Fees” – Not to exceed three percent of gross revenues.

    •   “Construction Management Fees” – Not to exceed five percent of the total improvement costs
        for managing the construction management process (inclusive of hard and soft costs, the “Total
        Improvement Costs”) for less than $2 million in Total Improvements Costs and not to exceed three
        percent of the Total Improvement Costs for $2 million or greater in Total Improvement Costs.

    •   “Development Management Fees” – Not to exceed four percent of the total hard and soft costs.

    •   “Leasing Fees” – Commissions on new leases not to exceed three percent of gross rental costs
        and commission on renewals not to exceed two percent of gross rental costs.

    •   “Legal Fees by Rittenhouse Law” – Not to exceed $600 per hour (subject to rate adjustments of
        up to five percent per year); provided, that the Funds shall not be charged for legal services
        provided by Jeff Pustizzi. This applies to Alterra IOS Venture II, LP only.

In addition to the Management Fee and the Affiliated Fees, each investor in the Funds will bear its
allocable share of expenses associated with the operations of the Fund(s). These expenses are outlined in
the applicable offering documents, but generally include, organizational expenses, such as legal and
regulatory fees related to the formation of the fund, and operating expenses, such as expenses related to
sourcing, evaluating and/or acquiring new assets.

A General Partner to a Fund is also entitled to a certain percent of the aggregate amount of distributions
made to such Limited Partner after Limited Partners have received a cumulative annual return,
compounded annually on its unreturned capital contributions and after Limited Partners have received
100% of its capital contributions have been returned as disclosed in each Fund’s Offering Documents.
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Item 7: Types of Clients
The firm’s sole clients are the Funds, each of which invests, directly or indirectly, in real estate assets.
Underlying investors are subject to applicable eligibility requirements. The offering documents of each
Fund contain minimum amounts for investment by prospective investors, generally $5,000,000, which
may be waived by the applicable General Partner at its discretion.