Arrow Capital Management LLC

Item 5: Fees and Compensation
We generally receive compensation from our Funds based on a percentage of net assets under
management (“Management Fee”) and on the performance achieved for the account of each of our
Funds’ investors (“Performance-based Fee”). Details concerning such terms are set forth in each of
the Funds’ confidential private placement memorandum and other governing documents.

Arrow Partners and Arrow Offshore

Management Fee - Both Arrow Partners and Arrow Offshore pay ACM an annual management fee
of 1.5% of the net assets in each fund. The management fee is paid quarterly in advance, based on
the value of the net assets of each Fund as of the first business day of each calendar quarter.

For Arrow Partners, the management fee is adjusted on a pro rata basis for capital contributions
made during the quarter.

For Arrow Offshore, the management fee is prorated for any period that is less than a full calendar
quarter and adjusted for subscriptions occurring during the quarter.

Performance-based Fee – The General Partner of Arrow Partners may receive an annual incentive
fee equal to 20% of the net profit (including realized and unrealized gains and losses), if any, during
the given fiscal year for the services it provides as General Partner. The Co-Investment Manager of
Arrow Offshore, may receive an annual incentive fee equal to 20% of the net profit (including
realized and unrealized gains and losses), if any, during the given fiscal year for the services it

provides as Co-Investment Manager. These incentive fees are subject to a loss carry-forward
provision. Under this provision, no incentive fee will be paid for any fiscal year until any prior net
loss has been offset by subsequent net profits. We generally deduct the incentive fee annually in
arrears.
The management and performance-based fees may be waived or modified for fund investors that
are also members, employees or affiliates or relatives of such persons, and for certain large or
strategic investors.

Other Fees and Expenses
In addition to management and incentive compensation, the Funds will be responsible for the
operating and administrative fees and expenses described in each Fund’s confidential private
placement memorandum. The types and amounts of fees may vary, but typically will include the
following: costs and expenses directly related to portfolio investments or prospective investments,
including brokerage commissions, clearing and settlement charges, custody fees, interest on debit
balances or borrowings, fees and specific expenses incurred in obtaining, maintaining or performing
systems, research and other information, liability insurance premiums covering us and our Funds,
administrative services and out-of-pocket costs of the administration of our Funds and our Funds’
accounts (tax preparation, accounting, audit, operational, administration, secretarial and legal
expenses) costs of litigation or investigation involving our clients’ activities and costs associated
with reporting and providing information to our clients’ investors. Please see the section entitled
“Brokerage Practices” for more information regarding our brokerage practices.

Investors should review the applicable governing documents of each Fund for detailed information
on the services offered and the corresponding fees that may apply.

Item 7: Types of Clients
All of our clients are private investment funds that operate as pooled investment vehicles. We
generally require that our Funds’ investors meet certain minimum investment thresholds and
suitability requirements. For example, certain of our Funds generally impose minimum investment
thresholds of $1,000,000 although we (or our affiliates) have the discretion to accept less. We also
require our Funds’ investors to make representations indicating that they are acquiring their interests
for their own account; that they have received access to all information that they deem relevant to
evaluate the merits and risks of the prospective investment in our client; and that they have the
ability to bear the economic risk of an investment in our client. Details concerning applicable
investor suitability requirements are included in each Fund’s offering documents and subscription
material which are furnished to all investors.