Highland Capital Management LP

ITEM 5.       FEES AND COMPENSATION

In accordance with Highland’s bankruptcy plan, Highland does not anticipate any business
activities other than in furtherance of the monetization of its business and advised
accounts. Accordingly, Highland is no longer marketing investment advisory services or
accepting subscriptions into any of its accounts. For its existing clients, Highland charges
fees in accordance with the governing documents of such accounts.

Clients incur brokerage and other transaction costs associated with Highland’s
management of Client Accounts. Please see the section titled Brokerage Practices of this
ADV Part 2 for a discussion of Highland’s brokerage practices.

Certain investment vehicles managed by Highland invest in other investment vehicles
managed by Highland or our affiliates. Both investment vehicles may impose management
fees, performance fees or other expenses (including administrative fees). This results in
greater expense to a Client than if such Client had invested directly in the underlying
investment vehicle. Certain companies in which Clients are invested also use the products
or services, or invest in investment vehicles, offered by Highland or its affiliates and pay
fees or other compensation accordingly.

FOR INSTITUTIONAL INVESTORS

       Unregistered Investment Funds

       In some cases, certain investors in an Unregistered Investment Fund enter into side
       letter agreements with Highland, under which they may pay a different fee than
       others based on the terms of their agreement with Highland or may otherwise
       receive certain additional rights. Upon termination of the applicable Unregistered
       Investment Fund’s advisory agreement, any management fees that have been
       prepaid are generally returned on a pro-rated basis.

       In addition to management fees, performance fees, and brokerage and transaction
       costs, investors in the Unregistered Investment Funds will indirectly bear the fees
       and expenses paid by the Unregistered Investment Funds, including custody fees,
       administration, legal, audit and tax preparation fees, and certain other fees and
       expenses. Each Unregistered Investment Fund’s offering documents include more
       detailed information about the fees and expenses paid by such Unregistered
       Investment Fund.

STRUCTURED PRODUCT VEHICLES

Fees are calculated and paid on a quarterly basis by the Trustee in accordance with the
governing documents. All fees are paid in arrears on the payment date. In some cases,
certain investors in a Structured Product Vehicle pay a different fee than others based
upon, without limitation, the size of the investment and Highland’s overall relationship
with the investors in the vehicles.

In addition to management fees, performance fees, and brokerage and transaction costs,
investors in Structured Product Vehicles will indirectly bear the fees and expenses paid by
the Structured Product Vehicle, including administration, legal, audit and accounting fees,
and certain other fees and expenses. Each Structured Product Vehicle’s governing
documents include more detailed information about the fees and expenses paid by such
Structured Product Vehicle.

SEPARATE ACCOUNTS

For our Separate Accounts, the agreement entered into with Highland will determine the
fee structure.

Please see the section titled Performance-Based Fees and Side-By-Side Management of this
ADV Part 2 for additional information regarding performance fees or investment profit
allocations in the form of carried interest.

OTHER COMPENSATION

Client Accounts may hold significant positions, individually or collectively, in the securities
issued by a company. Accordingly, Highland may have the right to appoint a board
member or officer for such company. Highland may appoint an employee or a third party to
such position as it sees fit in the best interest of the company and its Clients. Employees
are permitted to retain all compensation received for such positions except to the extent
contrary to the governing documents for one or more Client Accounts, in which case the
proportion of such compensation related to such Client Account(s) will be paid to those
Account(s) (generally in proportion to relative assets of the Client Account as of the date
paid).

In addition, to the extent permitted by the offering and/or governing documents of the
applicable advised accounts, Highland and/or its affiliates receive other fees for services
provided to portfolio companies, provided such fees are on arms-length terms. See also

ITEM 7.       TYPES OF CLIENTS

Our Clients include:

      ❖ Structured Product Vehicles

      ❖ Unregistered Investment Funds

      ❖ A Separate Account

Investment advice is provided directly to Clients and not individually to investors in a
particular Client.