Harbinger Capital Partners LLC

Item 5. Fees and Compensation
Management Fees

Management fees payable to Harbinger vary by client and are established pursuant to the Harbinger
Funds’ respective constituent documents. Management fees charged to the clients typically are
calculated as a percentage of net asset value (except with respect to certain Harbinger Funds where
management fees are based on invested capital), generally range from 1.0% to 1.5% per annum, and
typically are payable and deducted from the assets of each such Harbinger Fund quarterly in advance
or in arrears, as applicable, pursuant to the constituent documents of each Harbinger Fund.

Management fees are generally pro-rated for any subscriptions or contributions by an investor in a
Harbinger Fund that are effective other than as of the first day of the quarter. In the event of a
distribution or withdrawal prior to the end of a quarter, Harbinger will reimburse to the respective
client a pro rata share of the management fee charged with respect to the distributed or withdrawn
amount with respect to management fees paid in advance.

Harbinger formed certain special purpose vehicles (“SPVs”) for the purpose of segregating (i) the
exposure that certain Harbinger Funds have to the ongoing administration and bankruptcy
proceedings of Lehman Brothers International (Europe) and certain of its affiliates, (ii) certain less
liquid investments (such special purpose vehicles, the “PE SPVs”), and (iii) the exposure indirect
investors in Harbinger Capital Partners Master Fund I, Ltd. have to such fund’s investment in Ligado
Networks, LLC formally known as LightSquared Inc. Management fees are not charged on the value
of interests in the SPVs held directly by investors (and, with respect to the PE SPVs, no management
fees are charged on the value of interests in such SPVs held indirectly by investors), provided that
certain transferees of interests in the SPVs (as well as certain SPVs specifically formed in connection
with transfers of SPV interests) are subject to management fees on the value of interests in such SPVs.
These SPV’s were eliminated as part of the fund consolidation.

Harbinger may waive or reduce management fees for certain classes or investors, including, without
limitation, employees and affiliates of Harbinger, in its discretion.

Incentive Allocations

Incentive allocations allocable to Harbinger (or an affiliate of Harbinger) vary by client and are
established pursuant to the Harbinger Funds’ respective constituent documents. With respect to funds
structured as hedge funds, incentive allocations generally are allocated at year-end at a rate ranging
between 15% and 20% of net realized and unrealized capital appreciation in each series of shares or
capital account, as applicable, subject to a loss carryforward. A portion of each client’s assets may be
invested in securities and instruments Harbinger determines to be illiquid and lacking a readily
assessable market value or should be held until the resolution of a special event or circumstance (each,
a “Special Investment”), and with respect to certain Harbinger Funds such investments may be
maintained in side pockets, in which case they are not subject to any performance-based
compensation until a gain is realized or deemed realized. Such illiquid investments are usually subject
to the management fees described above and are generally valued at fair value for the period that they
are maintained in a side pocket.

With respect to a client structured as a private equity fund, Harbinger (or an affiliate of Harbinger) is
generally entitled to receive a 20% carried interest from such client, which is calculated after limited
partners of such client receive a return of their total capital contributions to such client.

Incentive allocation is not charged with respect to certain interests held directly and indirectly.
However, realized and unrealized net profits and net losses attributable to the interests in these certain
interests held investors will continue to reduce or increase, as applicable, the loss carryforward
amount for such investors. Notwithstanding the above,

certain transferees of interests are subject to incentive allocation on the value of interests.

Incentive allocation is no longer charged with respect to interests held by investors in the feeder funds
to Credit Distressed Blue Line Master Fund, Ltd., though Harbinger does charge performance-based
compensation with respect to certain transferees of such interests.

Harbinger may waive or reduce incentive allocations for certain classes or investors, including,
without limitation, employees and affiliates of Harbinger, in its discretion.

Payment of Fees

Management fees typically are payable and deducted from the assets of a client quarterly in advance
or in arrears, pursuant to the constituent documents of each Harbinger Fund, as described more fully
above. Since each Harbinger Fund is invested in illiquid investments and the ability to generate cash
may be limited, the Harbinger Funds may not have sufficient cash to pay management fees. The non-
payment of management fees could have a material impact on the operations of Harbinger.

Incentive allocations are generally deducted from the assets of the client annually or made as a
distribution of proceeds, as applicable, pursuant to the constituent documents of each Harbinger Fund,
as applicable.

Additional Fees and Expenses

To the extent permitted under a Harbinger Fund’s constituent documents, the Harbinger Funds are
generally obligated to pay for:
•       legal, auditing and accounting fees;
•       tax preparation expenses; and
•       investment expenses (incurred in connection with the making, holding, financing
        management, monitoring, hedging, sale or proposed sale of any investment (including any
        temporary investment) whether such investments are consummated or unconsummated) and
        all other expenses of each respective fund
...

Item 7. Types of Clients
Harbinger currently provides investment advice to private investment funds (i.e., pooled investment
vehicles that are not required to register with the SEC as investment companies by virtue of Section
3(c)(7) of the Investment Company Act). The Harbinger Funds generally have a minimum initial
investment amount of $5,000,000. This minimum may be reduced or waived by the general partners
of the funds that are partnerships or the board of directors of the funds that are companies, subject

in certain cases to applicable statutory minimums. Harbinger is not currently marketing any of the
Harbinger Funds or accepting new investors, though transfers of interests in the Harbinger Funds are
considered for approval by the general partners of the Harbinger Funds that are partnerships or the
board of directors of the Harbinger Funds that are companies (or, with respect to those SPVs
organized as trusts or limited liability companies, by Harbinger or the Harbinger affiliate managing
such SPV).