Harbinger Alternative Associates LLC

Item 5.    Fees and Compensation

Each Fund’s Governing Documents describe the fees, compensation and expenses that are borne
by such Fund. Investors in the Funds should refer to the Governing Documents for a detailed
description of each Fund’s fees, compensation and expenses.

Management Fees

Each Fund generally pays Harbinger a management fee in exchange for investment management
services. The management fee is typically a percentage of a Fund’s commitments or invested
capital as set forth in each respective Fund’s Governing Documents and subject to possible
variation throughout such Fund’s lifespan based on the size, timing and other considerations.
During each Fund’s commitment period, such Fund generally pays a management fee of 2.0% on
an annual basis of aggregate investor capital commitments. After the commitment period expires
(or upon the occurrence of certain other events set forth in such Fund’s Governing Documents),
the Fund’s management fee is 2% per annum of invested capital, reduced by the cost of realized
investments.

Management fees are paid quarterly in advance as outlined in each Fund’s Governing Documents.
The Governing Documents also specify conditions for fee reductions or limitations, and Investors
should expect to pay the stated rate until any such adjustments take effect on the designated dates.

Incentive Allocation

The General Partner of each Fund is entitled to earn a performance-based fee (i.e., “carried
interest”) in accordance with and as set forth in a Fund’s Governing Documents and subject to
possible variation throughout such Fund’s lifespan based on the size, timing and other
considerations. Any carried interest is allocated and distributed after all Limited Partners receive
distributions equal to their initial investments, plus a set preferred return, typically 8% per annum.
The carried interest distributed to a General Partner is subject to a potential clawback at the end of
the life of a Fund if the Fund’s General Partner has received excess cumulative distributions. A
General Partner’s performance-based compensation is typically 20% of any profits.

Other Expenses

Each Fund typically bears all of its own expenses (ordinary and extraordinary), as more fully
described in the relevant Governing Documents.

Offering and Organizational Expenses

Each Fund generally bears all legal, offering and organizational expenses incurred by the Fund
(collectively “Organizational Expenses”), subject to certain limits set forth in a Fund’s Governing
Documents. A Fund’s share of any Organizational Expenses in excess of such limit will generally
be paid by a Fund but borne by Harbinger through an offset to the management fee.

Fund Expenses

As further provided in a Fund’s Governing Documents, each Fund generally pays all costs and
expenses in connection with its organization, activities and operations (or will reimburse a Fund’s
General Partner, Harbinger and their respective affiliates for having incurred any such expenses),
including, without limitation:
   •   all Organizational Expenses, including any excess Organizational Expenses;
   •   the management fee;
   •   all placement fees (subject to offset);
   •   all costs and out-of-pocket fees and expenses attributable to sourcing, investigating,
       identifying, analyzing, evaluating, researching, diligencing, pursuing, bidding on,
       negotiating, consummating, committing to, seeking regulatory approvals of, structuring,
       developing, acquiring, capitalizing, purchasing, investing, holding, monitoring, managing,
       restructuring, recapitalizing, seeking disposition (and sale) opportunities for and selling (or
       otherwise disposing of) portfolio investments, including in connection with investments
       that are not ultimately consummated by a Fund (“Broken Deal Expenses”), including,
       without limitation, organizing and operating investment, holding, bidding, acquisition,
       aggregation or other intermediate entities formed to facilitate investments by a Fund
       commitment fees or other lenders’ fees that become payable in connection with a
       prospective portfolio investment, expenses related to negotiating and complying with non-
       disclosure and confidentiality agreements and obligations, travel costs and ancillary
       expenses (including, without limitation, airfare (including private or charter air travel,
       business class or first class airfare, but not to exceed the cost of business class or first class
       airfare)), ground transportation, lodging and accommodations, meals and travel agency
       fees and reasonable business-related entertainment expenses, third-party consulting and
       deal investigation, sourcing and identification fees and expenses (including, without
       limitation the cost of any customer relationship management software or services used for
       such purposes), broker, finder, investment banking, legal and accounting fees and
       expenses, costs and expenses of any representation and warranties insurance and/or other
       similar insurance, and printing expenses;
   •   all costs and out-of-pocket fees and expenses attributable to meetings and negotiations with
       sports leagues, team owners and sports industry executives, seeking approvals from sports
       leagues and reviewing, analyzing and complying with sports league rules including without
       limitation, travel costs and ancillary expenses (including without limitation, airfare
       (including private or charter air travel, business class or first class airfare, but not to exceed
       the cost of business class or first class airfare)), ground transportation, lodging and
       accommodations, meals and travel agency fees and related reasonable business-related
       entertainment expenses;
   •   all Broken Deal Expenses;

•   all legal, accounting, auditing, administrative, compliance, custodian, appraisal,
...

Item 7.    Types of Clients

Harbinger provides investment advice to pooled investment vehicles (i.e., the “Funds”). Interests
in the Funds are offered pursuant to applicable exemptions from registration under the Securities
Act of 1933, as amended (the “Securities Act”) and the Investment Company Act of 1940, as
amended (the “Investment Company Act”), and each Fund typically requires that each third-party
investor be an “accredited investor” as defined in Regulation D under the Securities Act, a
“qualified purchaser” as defined in Investment Company Act, and a “qualified client” within the
meaning of Rule 205-3 under the Advisers Act.

The minimum initial capital commitment generally required for an Investor in a Fund is $1 million
(subject to a General Partner’s discretion to accept a lesser amount).