Harbour Financial Resources Ltd

Fees and Compensation

                                                              Form ADV Part 2A, Item 5
Financial Planning

HFR provides financial planning services on an hourly basis with the rates ranging from
$40 per hour to $500 per hour (hereinafter referred to as the “Fee”), depending upon the
qualifications and experience of the staff person performing the work and the
circumstances of the planning situation. Furthermore, a client may choose to utilize the
financial planning format on a modular basis, whereby the client chooses which areas of
their financial realm they wish to have reviewed and analyzed. The first module fee is
$1000, and each module thereafter is $750 each. Additional modular fees range from $750
on up depending on work required.

A minimum retainer fee of at least $500 is payable upon signing of the engagement
agreement. The balance will be payable upon presentation of the written plan. (Plans are
generally completed within four months). Generally, HFR bills on a monthly basis. Billing
to business clients can be either on a retainer basis or monthly billing based on time
incurred.

Investment Supervisory Services

1. Adviser’s Fee:

HFR charges a fee based upon a percentage of assets under management for clients who
utilize its investment supervisory services. The Adviser’s fee schedule is typically as
follows:

                                                             Annual Fee if                Annual Fee on
   Portfolio Value                Annual Fee                Option* Investing             Outside Assets
                                                               is Desired                 Personally Held
                                                                                          .25% on asset balance as
        0 to $100,000          1.25% of account balance            Not Available
                                                                                             provided by client

                                 1.0% on first $100,000       1.25% on first $100,000
                                                                                          .25% on asset balance as
    $100,001 to $1,000,000       .75% from $100,001 to        1.0% from $100,001 to
                                                                                             provided by client
                                       $1,000,000                   $1,000,000

                                 1.0% on first $100,000        1.25% on first $100,000
                                 .75% from $100,001 to         1.0% from $100,001 to
                                                                                          .25% on asset balance as
   $1,000,000 to $5,000,000            $1,000,000                    $1,000,000
                                                                                             provided by client
                                .35% from $1,000,001 to       .50% from $1,000,001 to
                                       $5,000,000                    $5,000,000

                                  1.0% on first $100,000        1.25% on first $100,000
                                  .75% from $100,001 to         1.0% from $100,001 to
                                        $1,000,000                    $1,000,000          .25% on asset balance as
         $5,000,000+
                                 .35% from $1,000,001 to       .50% from $1,000,001 to       provided by client
                                        $5,000,000                    $5,000,000
                              .25% from $5,000,001 and up   .40% from $5,000,001 and up

             *Option Investing refers to the utilization of options (Puts, Calls, etc.) as
              part of your investing program. There is an additional fee, due to the
              increased time and analysis required.

The account fee is paid quarterly, in arrears, based upon the value of the assets in the
clients’ account as of the last day of the previous quarter. The first account fee will be paid
quarterly in arrears, prorated based on the date HFR begins providing investment
supervisory services. Subsequent account fees are due and will be assessed based on the
value of the account assets under supervision as adjusted for quarterly withdrawals and
deposits (cash flow) as of the close of business on the last business day of the preceding
quarter as valued by the custodian. HFR charges a minimum annual fee of $3000.00 per
account/household. Fees actually paid will be credited against the $3000.00 minimum and
the client account will be debited from the client’s account or the client will be invoiced
for the balance.
The annual advisory fee is on the entire account balance, including cash and accrued
interest. Fees shall be paid directly to HFR by the custodian subject to pre-authorization to
the custodian by Client. If during a quarter the client chooses to utilize HFR’s additional
options investing service (puts, call, etc.), then the client will automatically be subject to
that schedule as shown above to be applied to the quarter in which the change occurs and
vice versa, if that schedule was not originally selected. If selected, the annual fee on outside
assets such as 401k plans or assets not under direct supervision by HFR will be assessed a
fee as shown, to be calculated by a client provided statement of that asset. The fee will be

calculated on that account balance and ratable (spread over the upcoming quarters starting
at the beginning of the next year) added to the quarterly investment advisory fee as
calculated (beginning with the next year) in either the Annual Fee column or the Annual
Fee if Option Investing is Desired column. If the client chooses to decline this fee, then
the client will, under certain circumstances, incur additional financial planning update fees.
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Types of Clients

                                                              Form ADV Part 2A, Item 7

HFR generally provides investment advice to individuals, high net worth individuals,
pension and profit-sharing plans, and trusts or estates.

             Methods of Analysis, Investment Strategies and Risk of Loss

                                                                    Form ADV Part 2A, Item 8
HFR uses fundamental and technical methods of analysis to formulate investment advice
based on various sources of information, including financial newspapers and magazines,
research materials not prepared by HFR, and corporate ratings services, as well as the
various filings companies make with the Securities and Exchange Commission, including
annual reports, prospectuses and other filings.

HFR does not use any specific models. Investing style and recommendations are based on
risk tolerance and the client’s personal financial goals, objectives and needs.
HFR renders investment advice concerning equities, debt instruments, commercial
paper, government bonds, corporate bonds, mutual funds, secured notes, secured
notes and Exchange Traded Funds.

Risk of Loss: All investments are subject to the risk of loss which clients should be
prepared to bear. All investments present the risk of loss of principal – the risk that the
value of the securities (e.g., stocks, mutual funds, and ETFs), when sold or otherwise
disposed of, may be less than the price paid for the securities. Even when the value of the
securities when sold is greater than the value when purchased, there is the risk that the
appreciation will be less than inflation. In other words, the purchasing power of the
proceeds may be less than the purchasing power of the original investment. Investments
such as those primarily used by HFR for client portfolios (including, but not limited to,
stocks, mutual funds, and ETFs) are not deposits in a bank and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other governmental
agency.

Risks of Equities: Investing in equity securities generally involves becoming an owner in
the issuer company and participating fully in its economic risks. The value of equity
securities generally varies with the performance of the issuer and movements in the equity
markets. As a result, clients may suffer losses if they invest in equity instruments of issuers
whose performance diverges from the Firm’s expectations or if equity markets generally
move in a single direction. Markets periodically experience recessions, panics, crashes and
other periods of volatility that can cause substantial losses in the equity securities in clients’
investment portfolios.

Risks of Mutual Funds and ETFs: Mutual funds are professionally managed, collective
investment companies that pool money from many investors and invest in various asset
classes, including equities, fixed-income instruments (e.g., bonds), cash, and other assets.
ETFs are investment funds traded on stock exchanges, much like stocks and other

equities. An ETF may hold stocks, bonds, and/or other assets. Many ETFs track an
index, such as the S&P 500. An investment in a mutual fund or ETF involves risk,
including the loss of principal. Mutual fund and ETF shareholders are necessarily subject
to the risks stemming from the individual issuers of the fund’s underlying portfolio
securities. Such shareholders are also liable for taxes on any fund-level capital gains, as
mutual funds and ETFs are required by law to distribute capital gains in the event they sell
securities for a profit that cannot be offset by a corresponding loss. Shares of mutual
funds are generally distributed and redeemed on an ongoing basis by the fund itself or a
broker acting on its behalf. The trading price at which a share is transacted is equal to a
fund’s stated daily per share net asset value (“NAV”), plus any shareholders fees (e.g., sales
loads, purchase fees, redemption fees). The per share NAV of a mutual fund is calculated
at the end of each business day, although the actual NAV fluctuates with intraday changes
to the market value of the fund’s holdings. More information regarding the specific risks
associated with investment in a particular mutual fund is available in that mutual fund’s
prospectus. Shares of ETFs are listed on securities exchanges and transacted at negotiated
prices in the secondary market. Generally, ETF shares trade at or near their most recent
NAV, which is generally calculated at least once daily for indexed based ETFs and
potentially more frequently for actively managed ETFs. However, certain inefficiencies
may cause the shares to trade at a premium or discount to their pro rata NAV. There is
also no guarantee that an active secondary market for such shares will develop or continue
to exist. Generally, an ETF only redeems shares when aggregated as creation units (usually
50,000 shares or more). Therefore, if a liquid secondary market ceases to exist for shares
of a particular ETF, a shareholder may have no way to dispose of such shares. More
information regarding the specific risks associated with investment in a particular mutual
fund or ETF is available in its prospectus.

In addition to the risks discussed above, clients should consider the following risks:
   •      Financial Market Volatility. Financial markets are volatile and can decline
          significantly in response to adverse issuer, political, regulatory, market, or
          economic developments. Different sectors of the market can react differently to
          these developments.
   •      Foreign Exposure. Mutual funds and ETFs which are invested in foreign
          markets can be more volatile than the U.S. market due to increased risks of
          adverse issuer, political, regulatory, market, or economic developments and can
          perform differently from the U.S. market.
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